Lagoon Front

We taped this during the frenzy, and I conveniently forgot about it. It may have been due to price?

It closed in April for 8% under list, which made it the most-expensive non-oceanfront sale ever in Carlsbad:

Reverse Offer

The local market conditions appear to be getting worse every day, mostly because the headline writers and social-media experts are piling on now.  What can listing agents do?

When most agents are content to show their listings and then go wait by the phone, there are alternatives. Hat tip to our manager Steve Salinas for bringing up the Reverse Offer technique in our sales meeting!

For two years, the buyer-agents have just been telling their clients to bid hundreds of thousands of dollars OVER the list price, so now they may need some help with advising their buyer on how to proceed in this market.  When a buyer shows some interest in the home, the listing agent can reach out to the buyer’s agent with more than just a casual request for feedback.

The Reverse Offer is where the listing agent suggests price and terms to the buyer-agent that might be the foundation of a potential deal. It needs to be handled tactfully, and with the seller’s knowledge so it’s not a breach of fiduciary or a waste of time.

It can be as casual as mentioning any needs the seller might have in their exit plan, or for terms that would be advantageous to the buyer like seller financing or rate buydowns.  But it can also be as formal as issuing written offers signed by the seller for the waiting buyers to consider – here’s more:

It’s worth considering because what’s the alternative? To just sit by the phone and hope it rings, and when it doesn’t, go tell the seller to dump on price?

This is the Wait-and-See period when buyers are so comfortable on the fence that it’s going to take something different to get them to buy a home.  Dumping on price during the Wait-and-See period only makes the home buyers think that if they just wait longer, the prices will go down more.

Agents should offer their sellers some alternatives to that!

Biological Discoloration

We were discussing the “mold” found by a home inspector, who wasn’t qualified to comment on the subject – though that didn’t stop him from trying to scare the daylights out of the buyer just so he could CYA.

I suggested that it was the garden-variety mildew that could be removed with a squirt of bleach and a wipe of a cloth. After all, it tested ‘dry’ and the minor stain under the kitchen sink looked like it was years old.

Of course, they asked, “What do you know about mold?”

Plenty, lady…..plenty:

SB 6 and AB 2011

Re-purposing commercial and industrial properties into residential developments is an idea that should have been fast-tracked years ago.  Bills were signed by the governor yesterday, and they make it look like thousands of new homes will be built shortly.

But there is more to it, of course, since politicians and lobbyists are involved.  They want unions to build them, and/or they want some or all of the homes to be for low-income housing.

From this article – an excerpt:

For years, California state lawmakers have tried to reconcile warring views on what labor standards should be required of developers who’d be allowed to build housing more easily and quickly to combat the housing crisis.

Most recently that debate has splintered organized labor over two bills that both unlock commercial real estate for residential use. The Senate’s bill has the backing of the powerful state Building and Construction Trades Council, while the Assembly’s bill counts on support from affordable housing developers and the state’s Conference of Carpenters. The Legislature’s progress on housing for this session was framed as recently as last week as a battle between these two forces over the bill in the Assembly.

But following weeks of tense negotiations between the two unions over the labor provisions in the Assembly’s bill, the labor groups failed to hammer out a compromise.

So instead of choosing sides, leadership in the state Assembly and Senate simply gave their seal of approval to both bills. They opted to give developers two choices if they want to build housing where strip malls once were: Comply with stricter affordability standards or stricter labor standards.

Senate Pro Tem Toni Atkins, a San Diego Democrat, called the two-bill package “a monumental legislative agreement, and one of the most significant efforts to streamline and amplify housing production in decades.”

If passed, both bills would apply to overlapping sites — and leave the choice of which policy to use in the developer’s hands.

Full article here:

Just Sold in Olivenhain

I am running short on videos – there are fewer homes for sale, and the list of homes worthy of a video is even shorter. We saw this one a couple of months ago, and it just closed on September 16th for $3,600,000, which was $100,000 over list.  Knowing that, the video might be more intriguing now?

Hurricane is One More Deterrent

If mortgage rates around 7% weren’t bad enough, today we are experiencing another major setback to the San Diego real estate market.

Florida has been one of the main destination points for those moving away from here.

How many people who were planning to leave San Diego next year are second-guessing their plans now.

  • Would you leave San Diego, and move to Florida, after seeing this hurricane?
  • Would you move to Texas after the whole state was frozen over recently?
  • Would you move to Phoenix, where the temperature was over 100 degrees pretty much all summer?

Yikes!  I expect the local inventory of homes for sale in 2023 to be the lowest ever!

7% Is Here

Hat tip to Garry and Rob Dawg who predicted that we’d hit 7% this year, for the first time in over 20 years!

It was in April, 2002 that rates were over 7%, back when the NSDCC median sales price was $635,000.  This month it’s $2,075,000!

Rates have never doubled this quickly, and the increase looks like the fastest since 1981:

And it will probably keep going!

San Diego Case Shiller Index, July

I mentioned in my very first blog post seventeen years ago that all it takes to achieve 20% to 25% annual appreciation is for everyone to pay a little more than the last guy.  The same principle works in reverse too.

San Diego Non-Seasonally-Adjusted CSI changes

Observation Month
M-o-M chg
Y-o-Y chg
Jan ’21
Jan ’22


Bob Shiller regularly touts the Case-Shiller futures market but it’s a gambling hall if you ask me. Here’s what those bettors think about our local index:

IF they are accurate about the future of San Diego home pricing, then either you can sell your house now for today’s prices, or wait until 2025 and sell for about the same.

Who’s Left to Buy?

Graph from JBREC:

  • Only 36% of current homeowners said they would move if rates were 5%+,
  • Only 15% said they would move if rates were 6% or higher, and

If the market of move-up and move-down buyers has seized up like an old Ford, then who is left?  Who are the buyers who will stay in the hunt?

It will be those who don’t own a house here and are hoping to find a cooperative seller:

  • 1031 exchangers
  • Parents buying with/for kids.
  • Out-of-towners
  • First timers

The buyer pool is probably shrinking daily – great news for those who have the guts to keep looking!

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