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Zillow Appreciation Estimates

It looks like Zillow is sticking with their relatively flat forecasts for our local areas.  It’s probably realistic if appreciation goes like it did in 2022 – everything gained in the spring selling season is given back in the off-season.  Note how the ‘typical home value’ is still higher than it was a year ago in every area:

NW Carlsbad – 92008

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New Senior Homes in SD

Ok, ok you want to downsize but you don’t want to bake in the desert – plus you like living in San Diego. Aren’t there any newer, smaller choices around here?

Lennar has purchased three local golf courses and are on their way to building them out. The development of the Carmel Mountain Ranch golf course off the I-15 freeway (above) faced some resistance from the locals, but they beat that back and a gated senior community is now underway.

The Junipers is a senior community (55+) in Rancho Penasquitos and will include a mix of 455 single-family detached-homes and townhouses for sale. There will also be 81 attached homes for rent for low-income seniors households. It will include a 2.87-acre public park and a 2.82-acre loop trail.

Pricing isn’t out in the open but I’m guessing it starts just under a million.

https://www.lennar.com/new-homes/california/san-diego/san-diego/junipers

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Another new-home development is called the Farm, and it’s right off Rancho Bernardo Road. It isn’t solely for seniors, but they have a couple of one-story plans.  Here’s a quick tour of their 2,500sf one-story home under construction:


NSDCC Sales & Pricing, January

I was confident that in the last few months of 2022 we would reach at least 100 detached-home sales between Carlsbad and La Jolla. We are up to 102 in December, after closing 118 in November!

I wasn’t so hopeful about January.

As of today, there have been 68 closings this month.

We could have more sales, because there are 269 active listings sitting around.  But only those that deserve it (those that do everything right) will be selling now.

Those that get it right are being rewarded…..they are selling!  You could say that pricing is on an upward trend too, if you rely on the lame and inadequate median sales price to guide your decisions:

NSDCC Monthly Sales and Pricing

Month
# of Sales
Average SP
Avg. SF
Median SP
Med. SF
November
118
$2,447,009
3,094sf
$1,887,500
2,647sf
December
102
$2,682,523
3,064sf
$1,897,500
2,596sf
January
68 (so far)
$3,206,653
3,646sf
$2,222,500
2,833sf
Dec-Jan MoM Diff
-33%
+20%
+19%
+17%
+9%

Unfortunately, the dated and backward-looking Case-Shiller Index comes out next Tuesday, and the doomers will use it to convince you that the market is coming apart.

But because sellers are holding out, only the homes that deserve to sell will be closing in 2023, and they should get pretty close to what they want, price-wise. Except those represented by desperate agents who fail miserably at doing everything right, and then take a lowball offer.

With the lower number of sales, don’t be surprised if the median sales price fluctuates wildly.

Here are Bill’s thoughts on sales and pricing:

https://calculatedrisk.substack.com/p/has-housing-bottomed

Country Living

Our new listing is perfect for the extended family who want to live the good life in the country!

16390 Whispering Oaks Drive, West Ramona

6 br/4 ba, 3,801sf

YB: 1984

2.35 acres

Gated Community

Full Solar

Get away from it all and move to the country! Bring everyone with you too! This 4br/2ba one-story house has newer kitchen and baths, full solar, pool, views of the hills, circular driveway with lots of parking (RVs!), plus TWO ADUs – including a new tiny house – all on 2.35 acres! Total of 6 bedrooms and 4 full bathrooms – perfect for multi-gen! Gated community on the west end and only 3.5 miles from Poway Road.

LP = $1,250,000!

This is the west end of Ramona, just 3.5 miles from Poway Rd!

https://www.compass.com/app/listing/16390-whispering-oaks-drive-ramona-ca-92065/1222750460380863009

Sunbreak Ranch

Others including Bill Walton are thinking the Miramar open space would be ideal for housing – an excerpt:

San Diego has the nation’s best year-round weather and ample adjacent federal lands, making it the perfect site for the start of a national solution to homelessness. Sunbreak would soon prove successful in San Diego and could then be quickly replicated up the West Coast and across America.

We need help in three ways to launch the Sunbreak initiative:

1. We need our President and federal government to lease 2,000 acres of MCAS Miramar land to Sunbreak Ranch at $1 per year, and to designate this land as a temporary “federal emergency homeless help zone.” This will eliminate local red tape and opposition.

2. We need our President to deploy the military and security services to build a tent city for Sunbreak Ranch on this site with surplus equipment from the Afghan and Iraq deployments. Our military and security services have the manpower, expertise, and equipment to build out this entire tent city within weeks.

3. The cost of this Sunbreak experiment is minimal compared to the untold tens of billions of dollars currently being spent (to no avail) on homelessness annually.

To prove the viability of Sunbreak, we need significant individual philanthropists or organizations to step up and seed-fund this three-year Sunbreak initiative with up to $275 million.

This funding would include the proviso that when the first Sunbreak Ranch succeeds, the federal government will step in and begin fully funding a ranch outside of every major U.S. metropolitan center that agrees to return to the Rule of Law on their streets.

Homelessness is ultimately a public sector responsibility, but we first need the private sector and philanthropists to illuminate the pathway forward.

https://timesofsandiego.com/opinion/2023/01/14/sunbreak-ranch-is-the-answer-to-san-diego-and-americas-homeless-crisis/

Racing Towards Single Agency, Part 3

Won’t somebody just produce an all-encompassing (pardon the pun) website to facilitate homes sales? There is a new disruptor every month with their unique solution, and it’s ALWAYS born out of their frustration with buying a home recently so they are happy to bash agents and the current process.

But consumers have become more adept at searching online, and because there are so few quality homes for sale in 2023, their standards will probably relax further as their frustration mounts. Pretty soon, they will accept just about any risk, just to get their home search over with.

If a bigger company with some brand recognition put together the right website at the perfect moment when the consumers’ frustration is mounting and agents are flailing, it might catch fire. Something like this:


https://www.opendoor.com/exclusives/faq

I’d prefer an auction company because it would be more effective at selling homes fairly, and for top dollar.  But the winner will be the company that advertises the most.

Racing Towards Single Agency, Part 2

Seen on social media

I spoke to a few agents on the broker preview yesterday about business this year, and the common theme was that agents are have big trouble finding people who want to sell their home. It suggests that the inventory of quality homes will be extremely low this year.

What happens, when that happens?

It means that when listing agents get a hot new property to sell, they will be tempted to find their own buyer first, and/or spoon it to a select few of their agent friends, and then maybe expose it to their office mates before putting it on the MLS/open market.

The extinction of buyer-agents is well underway.

As the market tightens further, more listing agents will be tempted to sandbag their listing and not put it on the open market.  Look what happened to the agent this week who received 20+ offers (they told me the final count was 30 offers). After the listing was put on the open market, the flood of offers caused regrets about the workload, so they just grabbed one and shut it down.

Last night I popped off in the comment section about how the business gets shadier every year.

Here’s proof – not every listing with zero days on market was sandbagged, but let’s face it. If you mark your listing pending within a few hours of it going live on the MLS, you didn’t get full exposure.

NSDCC Annual Closed Sales With Zero Days On Market

Year
Annual Detached-Home Sales, Total
# With Zero Days on Market
Percentage
2016
3,107
84
2.6%
2017
3,084
99
3.2%
2018
2,799
84
3.0%
2019
2,834
100
3.5%
2020
3,190
116
3.6%
2021
3,184
173
5.4%
2022
1,939
124
6.4%

When agents see other agents touting their off-market business, they think it must be ok, so they do it too. It feeds on itself, especially when the allure of double-ending the commission is so strong in a tight-inventory environment.

This disease among agents is everywhere. You will notice it at every open house you attend – the agents conducting the open house can’t wait to tell you about their off-market opportunities to get you to sign up.  You’ll see it mentioned on social media daily – agents don’t think there is anything wrong with promoting off-market deals. Heck, everyone is doing it!

I regularly ask the agents who have a quality home for sale how they will handle multiple offers, and the answer is always the same: “I don’t know”, before they stumble and mumble something about the seller will decide (oh, thanks for that!) so the agents don’t get blamed for the end result. It’s embarrassing that they don’t have any strategy, and want to leave the door open for shenanigans later. No wonder they want to do an off-market deal, with no scrutiny.

Because no one is doing anything to intervene, the off-market deals will continue to be an accepted practice, and exacerbate the trend towards single agency (and the extinction of buyer-agents). Within the next year or two, every buyer will just go to the listing agent and take their beating.

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