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Off-Market Selling

by | Sep 22, 2023 | Revolution | 0 comments

Another disrupter is looking to cut realtors out of the deal, which is fine.

This is similar to Zillow’s Make Me Move, which didn’t go too far. It’s a novelty to publicize a crazy price for your home, but if somebody wanted to take you up on it, would you sell your home to them?

Or would you be more curious about what the open market would bring?

Compass has Private Exclusives, but it is rare that any sales come from it because the sellers want to go on the open market. They have heard the stories about bidding wars and homes selling for over the list price, and they want to see if it will happen to them. It’s as close as you get to winning the lottery!

Nobody needs an agent to sell their house. But virtually all homeowners want to sell for max money, and that’s why agents have a job.

https://twitter.com/amandaorson/status/1704861181352009738

Rates at 23-Year Highs

by | Sep 21, 2023 | Forecasts, Interest Rates/Loan Limits | 6 comments

The Fed paused alright – Jerome just talks up the rates now!

Rates moved only moderately higher on Wednesday after the Fed rocked the bond market with its updated rate forecasts.  To reiterate yesterday’s analysis, it’s not that the market is expecting the Fed to be accurate in those forecasts.  Rather, the forecasts help investors understand how the Fed’s approach will be calibrated going forward.

In simpler terms, the Fed doesn’t think rates are too high right now.  If anything, they might need to go higher.  Moreover, they won’t go lower until economic data really starts to deteriorate in a compelling way.

Unfortunately, this morning’s most relevant economic report didn’t deteriorate at all (weekly jobless claims were 201k versus a median forecast of 225k).  Actually, it’s fortunate for the economy, but unfortunate for interest rates.

Between the data and the overnight momentum in overseas markets, bonds are at their weakest levels in years.  Mortgage-backed securities (the bonds that dictate mortgage rates) didn’t swoon quite as much as Treasuries, but as of today, it was just enough to push the average mortgage lender almost perfectly back in line with the highest 30yr fixed rate of the past 23 years.

https://www.mortgagenewsdaily.com/markets/mortgage-rates-09212023

Need a reason to sell now, instead of waiting for next year? It doesn’t matter what you think of Peter or the content. It’s how many people who read this in the first half-day that matters – and this kind of doom spreads like wildfire:

Hippie Hill Sold

by | Sep 21, 2023 | Encinitas, Leucadia, Local Flavor, Local Government | 1 comment

Paying $6.3 million is the biggest boondoggle since the city paid $10 million for the closed Pacific View school.

ENCINITAS, Calif. – City leaders in Encinitas are moving forward in their purchase of about 1.5 acres of land at La Costa Avenue and Highway 101, known to many as “Hippie Hill.”

“We wanted to see this land preserved and protected,” said Encinitas resident Elena Thompson. The purchase of the land is nearly official, with escrow expected to close by the end of September.

“Having the opportunity to acquire this land and keep it from being developed into timeshares, I think the community has very much appreciated the work that we’re doing here,” Mayor Tony Kranz said.

The northern end of Leucadia has seen the construction of a hotel and more development on the way including a nearby apartment complex, so the preservation of this land was paramount for long-time locals.

“Now it’s not going to be developed. That’s great for the city. It’s a small parcel, but every open space is great,” Scott Campbell said.

At Wednesday’s city council meeting, council talked about how they plan to finance the land, purchased for $6 million.

The city plans to use cash reserves for the initial purchase and then use lease revenue bonds to build the reserves back up.

“Some are a little concerned about what effect the roughly $400,000 a year that servicing this debt is going to have on our budget. I think that it’s important enough that we will make it work,” Kranz said.

The public will be asked to weigh in on what they want to see done with the open space at a future city council meeting.

https://fox5sandiego.com/news/local-news/city-of-encinitas-moves-forward-with-purchase-of-hippie-hill-for-6-million/

Zillow Local Forecasts

by | Sep 21, 2023 | Zillow | 0 comments

At the beginning of 2023, the Zillow 1-year forecast for San Diego home values was -0.8%. In May, their expected 1-year appreciation rate in our local areas was around +3%.

Now they are guessing it will be around 5%….which might cause more sellers to wait longer!

SE Carlsbad – 92008

SE Carlsbad – 92009

NE Carlsbad – 92010

SW Carlsbad – 92011

Carmel Valley – 92130

Del Mar – 92014

Encinitas – 92024

La Jolla – 92037

Rancho Santa Fe – 92067

When is the best time to sell?

  1. When no one else is.
  2. When you have great comps (recent sales) around you.

Tighter Inventory

by | Sep 20, 2023 | Inventory | 0 comments

According to Bill’s post, there were almost as many San Diego sales in August (2,049) as there were new listings (2,323)!

The 197 NSDCC sales we had in August were the most monthly sales in 2023, and we already have 96 NSDCC closings in September….which means we should get up to the 146 sales from last September.

But the new-listings counts are dropping here AND at our feeder areas like Phoenix, Las Vegas, and Sacramento. Ideally we want those areas to have thousands of listings lying around and make it easier for people to leave San Diego!

While I was optimistic about our inventory growing next year, it could very easily go the other way – especially if it gets harder to move somewhere else.

State of the Market

by | Sep 19, 2023 | Jim's Take on the Market | 0 comments

The graph above is another way to identify the local pricing trend.

If it weren’t for the surge of lower-end sales in July, the trend line this year would look all positive. It should mellow out over the rest of the year, and even if it flatlines, the market will be fine entering 2024. It would actually be more exciting if it dropped a bit!

How can it be explained?

The demand is solid and buyers have been willing to endure the double whammy of higher rates and prices. Here is a graphic to help demonstrate the demand nationally (thanks JB!):

The demand is hot enough that 90% of agents say that the number of buyers are equal or greater than the number of sellers! While there are obviously fewer sellers, it can’t be that bad because the existing-home sales nationally will only be down 20% this year.

What will keep it going is the $70 TRILLION of older generational wealth that will be redistributed over the coming 2 decades!

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