If defaulters were pressured to pay or sell…..what metro areas would suffer most? Even in the worst cases, any additional inventory from defaulters will be drawn out over time because they don’t want to move.
It looks like the San Diego-Carlsbad region is under San Francisco’s 6.22%!
There are 22 homes on my favorite stretch of oceanfront – it enjoys ample sand and is relatively private for a public beach. The last sale on this street was the 9,320sf home that sold for $16,000,000 cash in August, and it’s the only other sale ever that closed above $11,000,000 here.
This just closed for $24,700,000 cash! Take a look around:
I didn’t see this until today – but the hotness sounds similar throughout SoCal:
Katerina Krumwiede wasn’t looking to move.
She and her husband, Rob, recently spent “well over” $100,000 on a complete remodel of their Encino house that added a backyard gazebo, custom kitchen countertops, new roof and imported bathroom tiles from Spain.
But Krumwiede, 40, said the single-story house still lacked quiet space — a drawback when the COVID-19 pandemic hit and she had to work from the master bedroom if she wanted to escape the sound of her husband’s frequent video calls.
Eventually, it became too much, setting off a chain reaction that led the family to sell their Encino home for $1.5 million and purchase a larger one in Calabasas for $1.7 million.
“It was very uncomfortable sitting on the bed all day long,” said Krumwiede, an entertainment industry lawyer. “My back was really hurting.”
In recent months, the national and Southern California housing markets have been red hot. Bidding wars are common. Homes fly off the market in days.
Many experts say the frenzy is due in large part to the pandemic. Although many low-wage workers worry they’ll face eviction, the economic downturn has left relatively unscathed the higher wage workers more likely to buy homes in the first place.
Federal Reserve policy has helped drive mortgage interest rates into the recently unheard of 2% range at the same time people are spending more time at home and realize they could use more space.
But the torrid pace of the for-sale market raises the question: Just how long can this continue?
For some, the pandemic simply accelerated decisions planned for the near future. And unemployment is still high, which will hinder home-buying dreams for others.
After an insanely unpredictable real estate market in 2020, will our strong sellers’ market continue in North San Diego County’s Coastal region? Probably, but it should be more balanced.
Mortgage rates around 3% (and under) will continue through at least the first half of next year, but how about the low inventory? The number of homes for sale today is 38% fewer than it was last year at this time, so it appears 2021 will start out with the lowest inventory ever for any new year.
But I don’t think it will last.
Do we have pent-up supply waiting to burst onto the market? Here are my categories where I think we will shave additional homes come up for sale, roughly in the order of the most-likely contributors:
1. Move-Uppers – Covid-19 changed what we want from homes. Low rates/high equity make it possible!
2. Baby Boomers – A survey said that half of seniors delayed listing their home in 2020 due to Covid-19.
3. Politics/Taxes – Many Californians have had enough. The migration trend to other states should ramp up.
4. Work From Home – This trend frees up many to move…..up and out!
5. Forbearances – Lenders will be lenient, but some in default will tap their equity, rather than risk losing it.
6. Prop 19 – Enables 55+ homeowners to take their low property-tax basis with them. Though this won’t be the sole reason to move, it makes for a nice sweetener – and may be the last straw to make it worth it.
7. Divorce Rate is Up 34% – Technically,this could add more sellers AND buyers, but realistically those coming out of a divorce will be more likely to split their equity and take a break.
8. Unemployment – Older homeowners will grapple with taking a pay cut or quitting the job-search altogether – and retiring earlier than expected won’t seem so bad when their home’s equity has never been so high. More boomer moves that would have happened in 2022-2025 will be pulled forward.
9. Eviction Ban – In the second and third quarter of 2020, there were 11% of renters who missed a payment. Mom and pop landlords will begrudgingly sell and pay the capital-gains tax, rather than risk another episode like this one.
10. Capital-gains tax. – From the WSJ:Biden will raise the tax on the capital gains of high earners to the same rate as wage income, increasing the rate to 43.4% (39.6% plus Medicare 3.8% investment tax) from 23.8%. Mr. Biden on Thursday estimated that these increases on high earners would raise $92 billion, but that’s before they put their tax lawyers to work. Biden has also said he will eliminate the 1031 exchanges, but all of the above will need Congressional approval. Just the thought could cause landlords to hurry up their plans of selling.
The potential home sellers that are in more than one category (and have more motivation) will be the first out – which means we should get off to a fast start in 2021. We probably won’t see a flood, but it will only take 10% to 20% more sellers to change the game dramatically.
Posted on Facebook by Miranda Klassen – I imagine all hospitals could use a hand:
Asking for help to support my husband Bryce and the ICU staff at Scripps Memorial Hospital Encinitas.
They have been exceedingly over capacity for weeks with no sign of slowing. They are exhausted and many are working double time. They are dealing with not only very intense patient care and loss, they are fielding calls from people out of state seeking a bed, calls from private citizens questioning whether they are at capacity, and now managing the logistics of vaccinating their staff knowing to expect an immunologic response.
Bryce is often asked, what is “really” going on?
At the peak in Spring/Summer the highest Covid positive patient load was in the 20’s. They have been consistently above 50 AND an entirely full ICU of non Covid positive patients. On average there are 20 staff members per shift.
Here is how you can help:
Letters of encouragement and gratitude. (Their favorite)
Pictures /Posters from kids (another favorite)
Holiday cards from previous patients
Donations of items to give them a much needed boost.
Bars (granola, energy, nuts, etc)
Packaged snacks, crackers, chips, nuts, jerky, etc.
Healthy bottled juices/smoothies
Bottled/Canned coffee and tea
Bubble waters like La Croix, Bubbly, etc.
Gift cards or Discount cards
Catered meals preferably individually packaged.
Larger items such as baskets, individual gifts, and gift cards will be used for raffles or recognition.
I will pick up or you can mail directly to the hospital. (she also said dropoff is ok too)
An update from the agent on the new listing (now pending) in La Costa Oaks:
27 showings, 8 offers significantly over asking. It was crazy! So many buyers from the Bay Area!
I had seven agents contact me for details about my sale that’s pending across the street. Because of the old wives’ tale about not divulging the sales price before closing, most agents don’t expect much from these calls, and just hope for a crumb to take back to their buyers about pricing.
I told the listing agent, and all seven buyer-agents, that my sales price was $1,470,000.
Transparency is good for everyone. The closest we can get to open auctions, the better – where all the evidence is available to everyone to make decisions with. My primary responsibility is to my sellers, who benefit from a higher price nearby that keeps our buyers happy and closing as scheduled.
The agent didn’t offer her sales price, but we’ll come back later and revisit. Key fact is the number of offers. I had three, and she had eight offers. Could demand be increasing as we get past the holidays? Zillow expects pricing to go higher than in 2020, which means a crazier market in 2021 than we’ve had recently!
LOCAL OBSERVATIONS AS WE ENTER 2021:
There are 20-30 buyer groups looking to pay $1,300,000 – $1,500,000 for a tract home around La Costa Oaks and maybe/probably La Costa Valley. There have been 92 sales this year in that range, and last year we had 50.
There are 30+ groups who looked at a 1980s one-story 3,000sf home in Encinitas for $1.6M.
There are hundreds of buyers for homes under $1,000,000 in Carlsbad & Encinitas.
There are unlimited buyers for one-story homes with nice ocean views – at any price.
Attractive pricing works!
Results will vary for sellers of homes that are older, unique, and not staged properly. Buyers are going to be picky, which means the creampuffs will be hot, and everything else will be……well, we’ll see!
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!