We had another 50-60 people stop by the open house yesterday! Over the weekend, we had seven agents showing their buyers, which was a healthy sign because we are priced at the upper-end of homes for sale in Fire Mountain -but it’s worth it, according to our guest commentator Jeff:
You’ll also hear from two new members of the KRG team – I forgot to get comments from a third new member Greg on Saturday – we’ll get his thoughts next time!
There is plenty of interest in home-buying but the number of showings has been dropping in the state. It may be due just to pricing – today there are only TWO homes for sale between Carlsbad and La Jolla that are priced under $1,000,000. One is a short-sale, and the other should be marked pending any day.
As we enter the middle of 2021, many are wondering if we’ll see big changes in the housing market during the second half of this year. Here’s a look at what some experts have to say about key factors that will drive the industry and the economy forward in the months to come.
“. . . homes continue to sell quickly in what’s normally the fastest-moving time of the year. This is in contrast with 2020 when homes sold slower in the spring and fastest in September and October. While we expect fall to be competitive, this year’s seasonal pattern is likely to be more normal, with homes selling fastest from roughly now until mid-summer.”
“Sellers who have been hesitant to list homes as part of their personal health safety precautions may be more encouraged to list and show their homes with a population mostly vaccinated by the mid-year.”
“Surveys showed that seller confidence continued to rise in April. Extra confidence plus our recent survey finding that more homeowners than normal are planning to list their homes for sale in the next 12 months suggest that while we may not see an end to the sellers’ market, we might see the intensity of the competition diminish as buyers have more options to choose from.”
“We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”
Lawrence Yun, NAR
“Higher home prices and higher mortgage rates are simply squeezing away those homebuyers that are right at the margin.”
The Journal touched on pocket listings yesterday – excerpts:
Real-estate agents are selling more homes to select customers while bypassing the public market, a move that squeezes supply tighter for many buyers when inventory is already near record lows.
In the vast majority of transactions, an agent lists a home for sale on a local database and markets the property widely to drum up interest and get the best price. But in certain cases, a broker will show an unlisted property to a small circle of potential buyers more exclusively, often in hope of getting a deal done quickly.
These private sales are known as pocket listings, or whisper listings. They have been around for many years. But they are on the rise now even though the National Association of Realtors adopted a rule last year aimed at discouraging their use following complaints from some of its members.
Pocket listings persist in part because they benefit big brokerages, which can shop listings in-house and advertise to potential clients that they have properties that aren’t available anywhere else.
On brokerage Compass Inc.’s website, a search for active listings or those coming soon in San Francisco pulled up 1,320 online listings as of midday Tuesday. The website also said 105 listings in the city weren’t publicly available but were available through a Compass agent.
Compass is known for the in-house Private Exclusives program, and it was one of the main reasons I joined. If any big brokerage were to mount a strong in-house campaign, they could commandeer the market – especially if they had the #1 market share. I wouldn’t recommend it for my sellers, but it could be a boost for my buyers.
Last year I did four off-market sales with my buyers, and only one was with a Compass listing agent. But I haven’t even sniffed an opportunity this year. Why? Because in 2021 every seller and listing agent wants to go on the open market to see if they can get bid up. They’ve heard the stories of sales going for hundreds of thousands over list, and they want their chance at glory.
We still have a Private Exclusives section, but every time I contact a listing agent who has a home listed there, they say they are going on the open market (there is some confusion on what the PE program is supposed to be). I’m sure there are off-market deals happening, but I don’t think they are any more than normal – and they have been around since the beginning of time.
In Northern California, the Compass presence is huge, and I’ve been told that management there is really pushing the Private Exclusives. But in the WSJ article, they mentioned that only 8% of the listings were Exclusives, and my guess is that many of those are heading for the open market.
Another unintended consequence of the frenzy? Slowing down the off-market sales!
FreedomCM asked if people who attend the open house have to self-certify that they have been vaccinated. This is the new form (above), which – like the previous form – just wants you to state that you don’t think you have the bug.
It is a thinly-disguised way for the agent to get your phone/email, and then contact you until you buy or die. It doesn’t state that you have to divulge your phone/email, and if the agent insists and you don’t want them to bug you, then give them this number: 704-482-0022.
One of the crazy things that have happened since running this blog occured last year when I posted a copy of the original covid form for all to see. A lady in Northern California (who wasn’t an agent) came across it and began using it to schedule appointments to see houses for sale! My name was at the bottom, and a listing agent called to see if this person worked for me. I’ll delete this in a couple of days!
James Harman and the Dangerous Gentlemen were fixtures on the local Socal circuit since the 1980s. The last time I saw him at the Belly Up, I did a video of one song and put it on YouTube – and he found it the next day! He had something to say about it too – check the comments section.
The housing market is hot as home prices continue to rise, but Nobel Prize winning economist Robert Shiller predicts prices will eventually drop. “They’ll come back down, not overnight, but enough to cause some pain,” Shiller told Yahoo Finance Live.
The latest S&P CoreLogic Case-Shiller national home price index posted a 13.2% annual gain in March, the fastest pace prices have risen in more than 15 years. Last week, the National Association of Realtors (NAR) reported the median existing-home price in April was $341,600, up 19.1% from April 2020.
“This is not a market that collapses overnight,” Shiller said. “It’s less short run volatile than the stock market. But you can see that we’re seeing price increases now that haven’t quite been realized since those years just before the financial crisis.”
Shiller said there is no “clean explanation” why the housing market is so hot. He expects it to continue another year or two driven by low interest rates and the COVID-19 pandemic work-from-home revolution.
But Shiller cautions that people are also driven by narratives and market sentiment. It’s a topic he wrote about in his book “Narrative Economics: How Stories Go Viral and Drive Major Economic Events.”
“I think it is some kind of irrational exuberance,” he said. “People are having fun, and they will as long as prices keep going up.” He said today’s housing market looks similar to 2003. “There is excitement and people are talking and some people are bidding way more than the asking price and that becomes a narrative or a story.”
But he tempers his comparison saying the current housing craze is different from the mortgage crisis that caused the last housing bubble to burst.
“So it’s not the same as 2003,” Shiller said. “It could be stronger. I think we have better protections, we have better supervision of lenders. So I don’t know if we should be worried about 2007, 2008, 2009 happening again.”
The current run up in prices, according to Shiller, “is disquieting” and he cites Phoenix as an example. “The biggest increase over the last year was Phoenix and home prices have gone up 20% in one year,” he said.
Shiller points out that demand in the housing market gets all the headlines while supply tries to catch up. Record prices for lumber, he says, are driving up prices for newly built homes. “The builders might be building to profit from these high prices now. But, it hasn’t happened yet,” said Shiller and that has him worried.
Shiller helped create the CME S&P Case Shiller home price index futures 15 years ago so people could hedge their risk during housing markets like this one. “So our futures market is now predicting big increases over the next year or more but it’s not certain,” he said.
“It kind of reminds me of the spirit that ended after World War II,” Shiller said. “There was a spending spree by people. They were jubilant the war was over,” he said comparing the mood of the country then to the mood now as the United States emerges from coronavirus pandemic.