Fallbrook Ranch

Check out Michele’s new one-story listing at 392 Vista Del Indio in Fallbrook!

3 br/2.5 ba, 1,918sf

1.05-acre lot

YB: 1985

LP = $799,000

SP = $856,000

Have you always wanted a single-story house with a three-car garage on a private, secluded ONE-ACRE lot at the end of the road in the heart of Fallbrook? This is it! New carpet and paint, refinished pool/spa plus central A/C installed recently. The floor plan is wide open and leads out to the large beautiful deck that offers a stunning view of the park-like backyard. The yard maintenance is manageable too, with a fenced-off portion of the back of the lot that slopes down to a seasonal creek – wow! A great value for those who want space and privacy.

Open house 12-3pm Friday, Saturday, and Sunday, December 17-19.

More on 2022

Brian and Yunnie got together for a preview of 2022. Yun touted his usual vagueness and Brian touched on a sensitive subject that long-time blog reader Chris and I discussed yesterday. 

The shuffle of older agents leaving the business and being replaced by new-age realtors who only know automated order-taking will make the end of the frenzy somewhat predictable.  Because the agents who have gotten into the business over the last 12 years have never experienced a ‘downturn’, it won’t be detected by most until the market has softened considerably.  Agents will carry on, and the last thing sellers will do is lower their price enough to sell. Plateau City should arrive by next summer, where sellers and listing agents unwittingly let listings sit for months while waiting for someone to bail them out. Sales drop, and prices stay about the same.  It will be excruciating.

“People rushed to buy homes during the pandemic, so two straight years of spectacular performance,” Yun said, pointing to a 7% increase in home sales from 2020 to 2021—from 5.7 million to 6 million, respectively.

While home sales have shined over the past two years since the start of the pandemic, Yun said 2022 is poised to be slightly different.

“I think the sales activity will be shaved modestly,” Yun said, suggesting a 2% reduction in sales next year as mortgage rates increase.

A silver lining on the horizon will be improvements in inventory, with the industry “turning the corner” on the dire shortage of housing supply for sale, according to Yun.

“New construction of single-family homes has been moving steadily higher,” he said, indicating that the market may see more inventory in the spring market next year than in 2021.

Yun also indicated that more people are likely to list their homes now that federal support and mortgage forbearance programs are either ended or are slated to end next year.

Even with a much-needed injection of inventory, Yun noted that agents should prepare for the rising mortgage rates to push activity forward next year as buyers try to secure the lowest rates possible before they climb to 3.7% by the end of 2022.

Buffini’s general advice to agents was to focus on the fundamentals and take advantage of the upcoming business in the winter and summer.

“I know people are working as hard as they can, but there is an old phrase that even a turkey can fly in a hurricane,” Buffini said. “When the wind starts to slow down, if you’re a turkey up at 200 feet, you’re going to be Thanksgiving dinner.

“There are going to be a bunch of people getting out of the business, and we are going to be left with even less experience in the industry,” he concluded.

https://www.rismedia.com/2021/12/15/buffini-bold-predictions-2022-challenges-inexperienced-agents/

Flop-A-Roo

Because Opendoor listed this home for $1,100,000 right after they bought it for $1,081,000 (and did no improvements), it must have meant that they thought they stole it.  The market thought otherwise, and some might think they were lucky to get what they did.

Their MLS remarks are insightful though.

Country Living!

Check out Michele’s new one-story listing at 392 Vista Del Indio in Fallbrook!

3 br/2.5 ba, 1,918sf

1.05-acre lot

YB: 1985

LP = $799,000

Have you always wanted a single-story house with a three-car garage on a private, secluded ONE-ACRE lot at the end of the road in the heart of Fallbrook? This is it! New carpet and paint, refinished pool/spa plus central A/C installed recently. The floor plan is wide open and leads out to the large beautiful deck that offers a stunning view of the park-like backyard. The yard maintenance is manageable too, with a fenced-off portion of the back of the lot that slopes down to a seasonal creek – wow! A great value for those who want space and privacy.

Open house 12-3pm Friday, Saturday, and Sunday, December 17-19.

CalExodus

In San Diego County, the excessive frenzy conditions have been driven by newcomers who don’t have a house here yet, and who figure that they just have to pay what it takes to get one.

It is those buyers that out-bid the locals. As those numbers dwindle, the frenzy will subside: 

News reports, anecdotes, and preliminary research have speculated about whether there has been an exodus from California during the COVID-19 pandemic. The implications of population changes, such as federal representation and federal funding allocations, are significant.

This policy brief uses the University of California Consumer Credit Panel (UC-CCP), a dataset containing residential locations for all Californians with credit history, to track domestic residential moves into and out of California at a quarterly frequency through the end of September 2021. This brief updates our spring 2021 analysis that used data through December 2020.

https://www.capolicylab.org/pandemic-patterns-california-is-seeing-fewer-entrances-and-more-exits/

The Frenzy and Rising Rates

A reader on Twitter wondered how rising rates will affect the 2022 frenzy.

Here’s what is expected today:

Under Chair Jerome Powell, the Federal Reserve is poised this week to execute a sharp turn toward tighter interest-rate policies with inflation accelerating and unemployment falling faster than expected.

The Fed today will likely announce that it will reduce its monthly bond purchases at twice the rate that Powell had outlined just six weeks ago. Those bond purchases are intended to lower longer-term rates, so winding them down more quickly — likely by early spring — will lessen some of the economic aid the Fed supplied after the pandemic erupted last year.

Fed officials are also expected to forecast that they will raise their benchmark short-term rate, which has been pegged near zero since March 2020, two or three times next year. Rate hikes would, in turn, increase a wide range of borrowing costs, including for mortgages, credit cards and some business loans. Just three months ago, the Fed had penciled in barely one rate increase in 2022.

Let’s note where the mortgage rates are today:

Some of the Fed hike might already be priced in, but these rates are still very attractive.  I think that any rate starting with a 3 will be attractive to buyers.

But let’s consider the history. Any time rates threaten to go up, or actually do start to rise, it causes buyers to hurry up and find a house – just to be able to lock in a lower rate. It means that we could be heading for the Ultra-Peak Frenzy, where rising rates actually create MORE frenzy!

Buyers who think sellers should lower their price to compensate for higher rates will be in for a long wait.  Sellers won’t believe it, and unless they are desperate (which very few are), they will blame the market/rates/agent before considering a lower price.  Many will try over and over again, and it might take them 2-3 selling seasons before they succumb.

Would rising rates cause more sellers to hurry up? Doubtful, but I hope so! It would be great just to get back to normal inventory (which is about double where it has been during the last half of 2021).

Mama’s Pies Results

HUGE THANK YOU to everyone who joined us in giving back this year through Mama’s Pies! Our team raised over $2,300, which allows Mama’s Kitchen to prepare, make, and deliver over 900 meals to those in need in San Diego!

https://www.mamaskitchen.org/events/mamaspies/

Hello, Mama’s Pies Sellers!

I hope this email finds you and your loved ones well and that everyone was able to enjoy a Happy Thanksgiving.

Thank you for your patience as we finalized our calculations to the Mama’s Pies Thanksgiving Bake Sale numbers, and to just say THANK YOU for all your support!

Here’s a breakdown of the impact that each of you made in raising funds for our critically ill neighbors:

# of pies sold: 2,925

# of Holiday Feasts donated: 1,005

General donations: $26,572

Sponsorship: $29,000

Total Raised: $169,247

This has been our most successful Mama’s Pies yet! CONGRATULATIONS for making this happen!

We sold out of pies before sales ended which is remarkable considering the amount of pies we sold, which is also a record-breaking number! Thank you all for your time and dedication to our community members.

Congratulations to the top ten Teams and Individual Sellers!

Individuals:

  1. Kelly Sherlock (Mama’s Kitchen Director of Administration and Finance)
  2. Adam Ritch (General Manager, WorldMark Mission Valley Resort)
  3. Scott Walls (Mama’s Kitchen Board President)
  4. KariLorraine Scott
  5. Cheli Mohamed
  6. Patricia Pasquill
  7. Andrew Rosenberg
  8. Leo Meltvedt/Chiropractic Life Center
  9. Michelle and Lisa Burkart
  10. Steve Carnes

Teams

  1. True Chiropractic
  2. Jack in the Box
  3. Neda Nourani and Associates at Compass
  4. Qualcomm Black Inclusion Group
  5. The Kube Team/Fairway Mortgage
  6. ScrippsAssists at Scripps Research
  7. Candis Kolb and Associates at Compass
  8. Klinge Realty Group
  9. Herbert Wertheim School of Public Health at UC San Diego
  10. Team SAIC

Our top three individual and team sellers will receive a small token of our appreciation.

Extended Frenzy

Geez, Jim, you sure are optimistic about 2022 sales and pricing. How come?

I mentioned a couple of sales in last week’s video, and here is other evidence:

When this house in Carmel Valley hit the open market, there was a model-match with pool located a block away that had just listed for $1,899,000.  This house listed for $1,995,000 and was at the end of the culdesac so it had the big pie-shaped lot:

https://www.compass.com/listing/12893-ralston-circle-san-diego-ca-92130/921928562713599849/

We offered $2,150,000 with 30% down payment, 21-day escrow and waived the appraisal – and lost. They received 14 offers, and they only countered the ‘serious’ ones.

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The last two sales of this model were $2,700,000 and $2,760,000 in July, and all three were listed by the same agent (one was her own house).  So her list price of $3,198,000 on Thanksgiving weekend seems a bit aggressive, but it looked nice:

https://www.compass.com/listing/3566-calle-palmito-carlsbad-ca-92009/922551469697457585/

Showing appointments were scheduled for Saturday and Sunday…..but they took an offer on Saturday, and cancelled the Sunday showings!

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We offered $1,050,000 and 21-day escrow for this fixer on a canyon in Clairemont that listed for $995,000.  We got boxed out on this one too – no counter-offer or bidding war.  They accepted $1,100,000:

https://www.compass.com/listing/4012-mt-brundage-avenue-san-diego-ca-92111/913237322679108673/

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Here are a few others that have closed in December:

This is a half-acre lot, but $1,710,000 is a boatload of money for Calavera Hills in NE Carlsbad:

https://www.compass.com/listing/3803-crownpoint-court-carlsbad-ca-92010/910821249707960161/

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This was a fixer built in 1986 on an acre in Olivenhain sold for 43.5% OVER THE LIST PRICE:

https://www.compass.com/listing/1256-rancho-encinitas-drive-encinitas-ca-92024/905698553849537033/

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I could list these separately, but they look better together – all selling for big pops over their list prices:

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This sold for $590,000 OVER THE LIST PRICE:

https://www.compass.com/listing/5646-chelsea-avenue-la-jolla-ca-92037/918937162309409297/

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The biggest reason why the frenzy should continue in 2022 is because those who have lost out on properties in 2021 will be even more determined next year – and be your competition.

Get Good Help!

2022 – Year of the Auction?

Word on the street is that Lennar may attempt to sell their new San Marcos homes by utilizing the auction format. They don’t have anything on their website yet, and it may be a bit clumsy to roll out so we may not hear much about it until they complete a few.

They have 700+ people on their interest list, and they have grouped them into sets of 25.  Why discriminate?  Let all 700+ people have a crack at buying every house!

Hopefully the selling of homes by auctions will become more popular in 2022!

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