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Automated Scheduling of Showings

The industry has been abuzz over Zillow buying ShowingTime, our appointment-scheduling service.

Wouldn’t it be great if Zillow published the number of showings publicly? The intel that could be gathered would be of great interest to buyers, and help enhance the home-selling transparency.

The data is already available.

Buyer-agents who book their appointments to show on the ShowingTime mobile app can see the whole schedule of times already reserved by other agents. It also makes you wonder if listing agents are reserving a bunch of times to make their listing look more popular (no names or other info is given on the app).

If buyers knew how many showings were scheduled, it would help them decide how much to offer.

Same with the number of offers.

The trend is to do less for buyers, so when asked, most listing agents won’t discuss how many offers they’ve received – and they certainly won’t divulge the offer prices.

But they should.

It would give other buyers a number to shoot at, and that transparency alone makes them more likely to hit it, or even offer more.  It’s an old wives’ tale that you can’t divulge – the opposite is stated in the contract:

Another benefit of divulging the number of offers and their terms is you quickly eliminate the non-players.  Most buyers are comfortable offering the list price, and +/- 5%, so why not just tell them that you have an offer that is 12% over list and save them the trouble – and save the listing agent from having to process another offer that’s going nowhere.

You can then concentrate on having the real players compete against one another.

It sounds like an auction, doesn’t it?

Frenzy Report

Del Mar Heights has always been a sexy option – the access to beach/freeway/UCSD is excellent, and two of the best elementary schools in the county are a short walk. Like in other areas, the inventory has dried up, so when this one hit the market, it created a tsunami of interest.  Look at the number of views & saves:

They ended up with 42 offers!

https://www.zillow.com/homedetails/13883-Boquita-Dr-Del-Mar-CA-92014/16764209_zpid/

Talk about perfect timing!  The day after the bidding concluded on the home above, this estate sale hit the market, and about half of the disappointed group ran over here to make an offer:

They received at least 19 offers!

https://www.zillow.com/homedetails/14238-Minorca-Cv-Del-Mar-CA-92014/16764756_zpid/

We can expect both to be in the March double-digit-over-list group at 15% to 20% above.

If three-quarters of those unsuccessful buyers throw their hands up and decide to sit this out for a while, there will still be several competitors frothing at the mouth for the next one – even at $1,500,000+.

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How Much Over List, February

Here are the percentages from January:

Link to January Blog Post

Here are February’s winners:

Most % Over List Price

List Price
Sales Price
Percentage Over List Price
$1,595,000
$2,060,000
29%
$1,300,000
$1,602,000
23%
$1,550,000
$1,825,000
18%
$1,079,000
$1,225,000
14%
$1,395,000
$1,600,000
15%
$899,000
$1,016,000
13%
$1,150,000
$1,300,000
13%
$1,150,000
$1,305,000
13%
$1,350,000
$1,510,000
12%
$1,399,000
$1,561,000
12%
$1,949,000
$2,180,000
12%
$1,900,000
$2,100,000
11%

Those are the only double-digit winners out of 216 sales, and only 43% of the total sold for more than list.

How much crazier could it get if we did auctions?

NSDCC February Stats (so far):

Sales: 216 (+16% YoY)

Average LP: $2,308,952

Average SP: $2,263,457 (98% of list)

Median LP: $1,699,500

Median SP: $1,736,000 (102% of list)

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Frenzy of the Month

This is the property where the listing agent received 50+ phone calls in the first 24 hours on the market.

She raised the list price from $1,595,000 to $1,795,000, but the bidding war persisted.

Ten offers were submitted, and it sold for $2,060,000 cash, or 29% above the original list price!

https://www.realtor.com/realestateandhomes-detail/3212-Circa-de-Tierra_Encinitas_CA_92024_M28960-15742

Hopefully the new owner will split the lot and build $3M homes so more can enjoy.

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Frenzy Report

Full bag of used booties!

More of the crazy this week – here are examples:

The agent reported receiving over 30 offers on this one:

https://www.zillow.com/homedetails/5402-Lodi-St-San-Diego-CA-92117/17192144_zpid/

This house went live on the MLS around lunchtime on Thursday, and by Friday afternoon all 52 showing-appointments allotted for the weekend were booked:

https://www.zillow.com/homes/3504-Rock-Ridge-Rd-Carlsbad,-CA,-92010_rb/69018333_zpid/

I got here early enough to catch the 3:15 agt on her way out, but the 3:30 agent showed up ten minutes late (his clients were on time) and he locks himself inside the house – which is all it takes to screw up the whole schedule. I was the 3:45 appt – I think there were at least five other parties who came after me:

Average % Paid of Last List Price

Nobody is giving them away!

I think we can agree that list prices today are at or above the all-time highs, yet with demand overwhelming the few listings that are trickling out, buyers are forced to consider going even higher. It’s working too:

We usually get some anxious buyers who pay closer to the list price in Jan-Feb, but the average has stayed under 100% in recent years.

With January already pushing 101%, it’s going to get crazier – and this is the Over-$815,000 market!

If you’re the type of buyer that refuses to get into a bidding war, you might have to sit this one out.

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This Week’s Frenzy Report

Two offers that I made on behalf of buyers fell on deaf ears this weekend.

The first listing agent pulled the usual stunt – the blackout, where he doesn’t answer the phone or communicate in any way until the deal is done.  Once he got the winning offer signed, he started answering his phone again (instead of communicating with the losers that he “went in a different direction”).   We had offered full price on a two-day old listing, and lost without any chance to compete. When I got him on the phone, I asked, “You must have sold it for at least $50,000 over list?”, to which he said, “No, $15,000 over”. Some agents prefer to grab the first decent offer, rather than create a bidding war – so get there early!

A listing agent on another new listing told me that he had four offers in hand, and expected a couple of others – and he couldn’t say if he was going to counter-offer. So we made a new offer that was $80,000 over list price, to which he responded, “Just finalized the transaction”, and then emailed me a couple of hours later to let me know that the seller has rejected my offer. Rubbing the losers’ nose in it is another common trait among the inexperienced listing agents too.

This listing agent reported that she had over 50 phone calls between Friday night and Saturday afternoon, so they raised the price by $200,000:

The second-wildest bidding war of 2021 (so far) resulted in the winner paying $2,100,000 cash for this house on January 13th (listed for $1,850,000, and ten offers submitted).  With the frenzy conditions, buyers may try to make a quick buck – don’t be surprised if we see more of this:

We’re not even in the selling season yet – it starts tomorrow!

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‘Not A Bubble’

An excerpt from this article:

https://www.usatoday.com/in-depth/money/2021/02/04/homes-sale-we-housing-bubble-prices-outstrip-wages/6671282002/

For Mark Stapp, a real estate professor at Arizona State University, what’s going on in the real estate market right now is not a bubble.

“The definition of a bubble is that when it pops, there’s nothing there,” Stapp said. “That’s not this case. There’s very real demand that exists and that’s what’s causing prices to increase.”

Realtors across the country generally agree.

Mary Jo Santistevan, a top-producing sales associate with Berkshire Hathaway HomeServices in Phoenix, said buyers are flowing in from congested cities of California, Washington State and the Midwest. They are looking to take advantage of Arizona’s lower home prices, lower property taxes and quality of life. But they are confronting a situation where inventories of unsold homes have been dropping steadily in recent years and are now teetering on a one-month supply in some areas and less than that in others.

“Even builders are struggling to keep up with demand,” Santistevan said. “There’s a 10-month wait time for construction. The majority of builders are using a lottery system. One builder in particular in Gilbert had a waitlist of 100 deep.”

Stacie Lee, a fellow agent at Berkshire Hathaway, says whenever something goes on the market in Phoenix, the showings are usually back-to-back and a closing comes within a matter of days.

“Many homes go for $30,000 to $40,000 over list price and a few homes in the mid $300,000s have sold for $100,000 over list,” Lee said. “A lot are going for cash. Cash is king right now.”

Lee added that she had 70 people show up for an open house over the summer and had 15 offers in the first couple of hours. The home sold for $375,000 and is now back on the market at $550,000.

“There’s a lot of investors flipping homes here,” she said.

Nearly 3,000 miles away in Augusta, Maine, the housing market is just as frothy.

Fifteen of Maine’s 16 counties experienced a 10% increase in median home prices in 2020, according to Aaron Bolster, president of the Maine Association of Realtors. Some of those counties saw leaps of 20% or more.

“We already knew Maine was popular,” Bolster said. “More than 32 million people visit between Memorial Day and Labor Day. They don’t typically come at this time of year. But in a pandemic, it’s a safe place to be. The population density is very low and teleworking suddenly got popular in 2020.”

Bolster said 25% of buyers in 2019 came from out of state. Last year, that number rose to 33%. Without a large housing stock to begin with, available listings got siphoned off pretty quickly as out of state buyers bid up the prices.

At the moment, there are only 6,000 homes for sale in the entire state, Bolster said, and half of them are under contract.

The situation is unique for Maine and Bolster is not sure how long it will last, especially given that the demand is driven by people coming from out of state – many of whom will presumably be able to work from home – and not by job creation within Maine’s borders.

“Maine doesn’t create a lot of new jobs,” Bolster said. “When we create a new job, we give one up. So real estate doesn’t usually appreciate that fast. It’s interesting to see such a robust market when it’s not really tied to economics.”

How Much Over List?

We’ve had 208 closed SFR sales between La Jolla and Carlsbad this year.

How crazy is it?

Eighty homes sold over the list price, which is 38% of the total number of sales. Of those, most were just $10,000 to $50,000 over list, but there were some big bombers:

Most % Over List Price

List Price
Sales Price
Percentage Over List Price
$1,150,000
$1,500,000
30%
$1,500,000
$1,750,000
17%
$1,850,000
$2,100,000
14%
$1,500,000
$1,710,000
14%
$650,000
$740,000
14%
$2,199,000
$2,475,000
13%
$2,395,000
$2,660,000
11%
$2,250,000
$2,495,000
11%
$2,995,000
$3,300,000
10%
$1,449,000
$1,600,000
10%

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It’s not just paying more than the list price. The listing agents will test your mettle too.

Here’s a seller counter-offer on a million-dollar home with nine offers on it:

The house was built in the 1980s, and you expect the buyer to take it as-is without a home-inspection contingency? And you’re going to get 5% to 10% over list price, but you can’t throw in a home warranty?

There will be buyers who would have paid more money but who drop out when they see the extra demands.

Listing agents believe that this is how you get rid of the buyers who ‘aren’t serious’, but in reality it just limits the remaining buyer pool to the emotionally-charged-and-will-sign-anything buyers.  They are the ones that are less likely to close escrow.

Actives & Pendings By Area

Historically the market has felt healthy and balanced when we’ve had a 2:1 ratio of actives vs. pendings.

Remember when the Ranch was 10:1 for years? Now look at the market – especially on the lower-end:

NSDCC Actives and Pendings

Town or Area
Zip Code
Actives
Pendings
Cardiff
92007
11
16
NW Carlsbad
92008
17
19
SE Carlsbad
92009
9
38
NE Carlsbad
92010
1
12
SW Carlsbad
92011
2
17
Carmel Valley
92130
26
43
Del Mar
92014
43
13
Encinitas
92024
39
45
La Jolla
92037
101
46
RSF
92067
96
35
Solana Beach
92075
11
10
NSDCC
All Above
356
294

Carlsbad, a town of 110,000+ people, has 29 houses for sale?

It’s probably going to get crazier too as the traditional selling season opens up and we see a few more listings trickle out. It would take a flood of new listings to cause the market to slow down now.

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