Ben is killing it!
Strategy? Slow-motion auction? Transparent bidding? Come on, aren’t you just getting lucky?
Yeah, maybe but it’s not just the newer tract houses (creampuffs) that anybody can sell.
Yesterday we closed escrow on our freeway-adjacent all-original bungalow from 1958. No fancy kitchen, no staging, and not even a garage – it was just me and the freeway and it still closed over list.
There was some clawback demanded when the buyers discovered that the heaters didn’t work and the sewer line was plugged – which we immediately got in front of and suggested a credit instead.
Donna negotiated $9,000 as a reasonable amount, in lieu of repairs.
What’s the cost of replacing a sewer line all the way to the street? Beats me. Credit instead.
The 1961 Cadillac limo? Sold for $3,500 to a guy who has a son going into his junior year in high school. They are going to use it for his prom car the next two years.
Everyone’s journey is different.
Some people hire us on the first day we meet, and others take longer.
We first met the sellers of Meadow Wood in September, 2021, at which time I quoted their home’s value at $1,800,000. The market kept cooking, and by April, 2022 my price was up to $2,000,000.
But the last half of 2022 got rough, and by November my estimate had dropped quite a bit:
The only other sale in the neighborhood over the last 12 months had taken the long, hard road. It was about the same size and condition as our listing, and they started at $1,799,000 in May, 2022, which should have been right in there. But by the time they closed in December, the final sales price was down to $1,562,000.
By the time we signed our $1.8M listing agreement, it was March 7, 2023 – and we had prep work to do.
Conditions were improving, so we hit the open market on May 4th at $1,850,000.
The rest will sound familiar. I conducted the open-house extravaganza, from which we received six offers. My transparent open-bidding process ran the price up to $2,000,000 with a long escrow plus rentback.
There are 171 homes in Bridgewater/Willowcreek, and this is the only sale of the year! Appraisers want to use comparable sales that are less than six months old, so my $2,000,000 will be the comp of the year for the neighborhood – and should draw out more sellers. We’ll see how they do!
I think we can say that my sale was at peak pricing – the same as it would have been in April, 2022.
The Cure sold out TWO nights at the North Island Credit Union Amphitheatre (20,500 capacity):
This is about the highest point in Encinitas with a lot of view!
The sellers lowered their price by $100,000 and the buyer then paid it in full:
We did pretty good last year, and ranked as the #320 small team in America – thank you clients and friends!
But the City of Carlsbad wasn’t impressed. I still have to grovel to get my open-house signs back:
3 emerging migration "hot spots" to watch over the next few years:
Northern New England
Upper Great Lakes
Where are the new households coming from (and why)?
— Eric Finnigan (@EricFinnigan) June 24, 2023
When I listed 2949 Avenida Castana on March 31st, it was the only house for sale in La Costa Valley. Well, besides this one, which we thought would never sell while priced at $2,400,000 (the model-match comp had just closed under list at $2,175,000 on March 27th).
We listed Castana for $1,900,000, and took a $2,000,000 offer on April 8th after my slow-motion auction gave all five bidders a chance to win.
But the $2.4 listing did go pending on April 16th, shocking everyone. Two weeks later, their cash buyer closed for $2,375,000, which set off a cascading surge of new listings.
Above are the six La Costa Valley listings that hit the open market between April 28 and May 19th, with their initial list prices.
Here are today’s results for the same six listings:
Everyone – sellers, buyers, and agents – were working with the most-recent $2,175,000 comp until the $2,375,000 closed on May 1st. Vista Acedera had already gone on the open market, but the other five listings had a chance to adjust their price before hitting the MLS in May.
COULD ONE HIGH COMP GIVE EVERYONE ELSE A 10% BUMP?
- Avenida Ciruela went with their planned list price and looked like a giveaway, relatively. No surprise that their buyer paid the $250,000 premium that was already built in by the new comp of $2,375,000.
- Camino Serbal stuck with their list price (it was telegraphed in advance), and they got a $50,000 bonus.
- We were going to start lower with my listing on Corte Cidro, but we bumped it to $2,100,000. I conducted my open-house extravaganza and procured three offers. After giving all three a chance to pay more, the winner agreed to $2,200,000. I raised my list price to signal to others (buyers and agents) that we were fortunate to go higher, in hopes of not getting undercut while in escrow.
The other three listings are still active, and have only adjusted their prices modestly. Now that my listing offcially closed yesterday for $2,200,000, there probably won’t be much change in their prices now – heck, two out of three are below mine, and my listing had power lines and a full bath added without permits!
It shows how easy it is to miss in the post-frenzy market. Some homes aren’t going to get their price, and others aren’t going to sell at all. The reading of the market conditions, and the strategy employed by the listing agent is what makes the difference.
I doubt we’ll ever see this again.
Even though we’ve had healthy gains in 2023, the YoY declines makes it look like we’re going backwards because the index was rising so quickly last year. Hard to imagine any more MoM gains of 3.8% or 4.6%!
April’s index is about the same as it was in February AND August, 2022.
Going forward, it should settle in to a range of 390-420 for the next couple of years.
However, the view from the ivory tower is that we’ve survived the downturn and we’re fine now. Because the Case-Shiller Index is so dated, he already knows that the next 2-3 months will be positive:
“If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument. Whether we see further support for that view in coming months will depend on the how well the market navigates the challenges posed by current mortgage rates and the continuing possibility of economic weakness.”
My guess is that the second half of 2023 will go back to Plateau City, like it did in 2019:
San Diego Case-Shiller Index, 2019
While the PPP fraud was rampant across the country, the ultra-low mortgage rates and lack of inventory were more to blame for inflating home values recently – at least around here:
Anecdotal evidence suggests that many recipients of fraudulent PPP loans used the funds they received to purchase expensive houses, cars, and luxury items.13 In this section, we examine whether recipients of PPP loans flagged as potentially fraudulent are more likely to purchase houses than non-flagged recipients. We first examine house purchases using property records from PropertyRadar for a random sample of 250,000 individual PPP borrowers.
The sample was collected in February 2023 and consists of individual borrowers who received PPP loans during all three rounds of the PPP with data on house purchases through the end of 2022. Round 3 of the PPP ended in June 2021, so we observe at least 18 months of post-PPP house purchase activity for all individuals in the sample. We match names purchasing houses in the PropertyRadar data to names of PPP borrowers, limiting the sample to names that are unique.Link to 150-page report