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Bidding War! Part 2

The seller of our new listing in Encinitas Ranch has been discussing a move for six months.  He contributed his decision to sell now primarily to what he read here on the blog.

Specifically, that what appears to be a frenzy slowdown is NOT reflective of the market normalizing – instead, it’s due to just the opposite; a continuing decline of inventory.

What’s my #1 tip for sellers? Sell when everyone else isn’t!

The Encinitas market is starved for higher-end luxury homes, especially those sexy, turn-key ready homes that can be occupied within 30 days (a dearth made worse by most listing agents demanding 60-days free rent after closing for their sellers).

We thought if we went on the market in October and appeal to the buyers who wanted to close and occupy by Thanksgiving, we’d have a special niche all to ourselves.

But we had work to do to maximize the appeal, so we spent the last two months and $50,000 to get the home in tip-top condition. By yesterday, it was perfect – thank you Donna!

What happened next wasn’t luck or happenstance.

It was a planned strategy to maximize the opportunity for buyers to not only purchase a home yesterday, but to also have the process be a fair and clear competition utilizing full transparency. I made sure that everyone knew the rules of engagement, and how to win.

Today, I get to go back in the jungle.

We made a cash offer with different clients yesterday who are hoping to buy a home in Carlsbad, and got the usual routine. Agent doesn’t answer his phone, doesn’t call back, doesn’t acknowledge receipt of the offer until today and leaves a cryptic email suggesting that he might have multiple offers but no other game plan on how the winner will be determined. You know, the normal way agents handle their business.

Full transparency is the best way to achieve top dollar, and you can only find it here!

New Listing Update

Our new listing has been on the MLS for 24 hours, and the Zillow views and saves are solid. With people using Zillow for their house porn, you can’t put too much stock into the views – but the saves should be those who have more than a casual interest, hopefully!

The zestimate hasn’t changed yet, but Redfin bumped their estimate by $488,339 from the previous day:

Wednesday, October 20:

Thursday, October 21st:

SD North County, September

Thanks go out to Jerry Ryan, who publishes a monthly newsletter out of the goodness in his heart – giving us another look at the local stats.

He circled in red (above) and I added a red arrow below that show how the inventory has been so different this year – and it really dropped off in September.  Yet sales are actually higher, YTD.

I love his sparkbars too!

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Previously, it might have been possible to have a month or two where the SP:LP ratio would be close to 100%.  But in 2021, we might have the ratio be over 100% for the entire year!

We had a surge in sales at the end of 2012 and 2020, and both were followed by incredible frenzy conditions the next year. Are we setting up for a big 2022? Here is the latest report on the national picture:

(more…)

Jim’s Podcast

Natalie (who is doing a stellar job as marketing director!) suggested that some people might want to hear thoughts on the market conditions in a longer podcast-type format, so here’s my six minutes:

The real estate business is fast moving and sellers and buyers are making snap decisions. You want an adviser who knows the market and can deliver advice extemporaneously!

U2 Mick Fergie

The greatest rock’n’roll band in the world was in town this week, and played two shows at SoFi Stadium. Their entire show was uploaded today at this LINK.

But they seem like prancing 80-year-olds to me. This is better, thanks to Fergie – recorded at Madison Square Garden, October 30th 2009 at the 25th Anniversary of the Rock and Roll Hall of Fame Concert:

Our New Listing in Encinitas Ranch!

Sometimes it’s easy for homeowners to make the decision to move, and for others it takes careful deliberation to come to the right conclusion – and it’s relative to how much they love their home, and if they can do better. It took months of discussion to decide to let this one go – it’s a trophy property!

1463 Paseo De Las Flores, Encinitas 92024

4 br + den/4.5 ba, 4,318sf

YB: 2003

$3,395,000

Breathtaking ocean & golf course views from this former model home that has been extensively remodeled and upgraded! Newer kitchen has polished quartzite counters, Wolf appliances, built-in Sub-Zero fridge and dual dishwashers too! Gorgeous bleached-oak hardwood floors throughout the home, including the four en-suite bedrooms plus office and theater room – and just wait until you see the richly appointed primary suite! Live the coastal lifestyle right on the golf course!

https://www.compass.com/listing/1463-paseo-de-las-flores-encinitas-ca-92024/897812950230112937/








Open house this weekend, 12-3pm!

San Diego Case-Shiller By Tiers


https://journal.firsttuesday.us/san-diego-housing-indicators-2/29246/

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With the supply and demand so out of balance on the lower-end, it’s incredible to see that the high-end is out-performing with faster appreciation.  It looks like big money is throwing its weight around!

Note this guy’s negativity in the second paragraph.

I guarantee you that he is going to be wrong, wrong, wrong.

Declining Inventory & More Sales

We keep hearing people say that the inventory is rising………..but is it?

Bill’s chart shows how different the San Diego inventory is compared to all the others:

Ten of his 22 metros did have increases in their inventories, month-over-month!  But MOST had declines, with San Diego being the leader – by far.

The San Diego inventory plunged almost 19% month-over-month (second only to Albuquerque) and was the decisive #1 metro winner with the 49.3% decline, YoY.

We have half the inventory we had a year ago!

But it’s not affecting sales, because demand is overwhelming.  The September sales were outstanding – higher than in recent years, except for the big rally in the second half of last year:

How will this play out next year?

Let’s assume that there is pent-up supply, and there is a surge of listings next year – is there precedent?

Yes, and let’s check the last time the inventory had been in decline.  In early 2013, we got a boost of listings, and the waiting demand gobbled them up – and the frenzy was on:

Hopefully it will happen like that again in 2022, and it will be surge-proof. The more listings that come to market, the hotter the frenzy will be.

I’m on a morning call with 150 Compass agents around California. The leader said today that most agents have a 10:1 ratio of buyers to sellers. The demand is there!

But it could be fairly subdued next year, if nobody wants to sell.

Zillow Offers Takes a Break (?)

Hat tip to GA for sending this in:

Zillow Group Inc. is taking a break from buying U.S. homes after the online real estate giant’s pivot into tech-powered house-flipping hit a snag.

Zillow, which acquired more than 3,800 homes in the second quarter, will stop pursuing new home purchases as it works through a backlog of properties already in its pipeline.

“We are beyond operational capacity in our Zillow Offers business and are not taking on additional contracts to purchase homes at this time,” a spokesperson for Zillow said in an email. “We continue to process the purchase of homes from sellers who are already under contract, as quickly as possible.”

Zillow is best known for publishing real estate listings online and calculating estimated home values – called Zestimates – that let users keep track of how much their home is worth. The popularity of the company’s apps and websites fuels profits in Zillow’s online marketing business.

https://www.bloomberg.com/news/articles/2021-10-17/zillow-pauses-home-purchases-as-snags-hit-tech-powered-flipping

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They are known for their marketing prowess, so if you’re like me, you probably wondered if they just cooked up a great excuse – and/or if was there any more to the story.

I know one homeowner who got a quote from ZO about a month ago that was around the retail value of the home. Two weeks later, ZO revised their quote downward by 5%, and claimed it was due to ‘market conditions’, not a pipeline backlog.  But there’s no obligation for them to tell the same story everywhere.

Let’s check their market conditions.

These are the MLS stats for the broker from Corona who has 91 agents handling the bulk of the Zillow listings for Southern California:

Solds between April 18 – July 18th:  174

Average Days on Market: 14

Median Days on Market: 6

Solds between July 19 – Oct. 18th:  273

Average DOM: 26

Median DOM: 22

ACTIVE LISTINGS TODAY:  294

Average DOM: 29

Median DOM: 21

They were in love with the frenzy, and were able to sell half of their listings in the first 6 days on the market. But today, most of their active listings have been on the market for weeks, and are still unsold.

When their home isn’t selling, amateur sellers cancel their listing and wait for a ‘better market’.

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