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Sizzling November

I agree that homes selling quicker – evidenced by the lower market times – means crazy price increases.  Sellers can get away with pricing their home at 5% to 10% above comps and buyers still come running.

How crazy is it?

More than half of our sales are finding their buyer in 14 days or less!

NSDCC November Sales

Year
Total # of Sales
Sales with <14 DOM
% of Sales <14 DOM
2019
219
74
34%
2020
251
136
54%

Let’s also note that by the time we’re done, there will be close to 300 sales this month, which is unheard of for November!

Downtown Carlsbad is Cooking

Two downtown residential condominium buildings with a mixture of market-rate and affordable housing, ground-floor commercial space and underground parking got the go-ahead for construction last week from the Carlsbad City Council.

The Carlsbad Station project will cover 1.76 acres of the city block between State and Roosevelt streets, north of Grand Avenue and a half-block walk from the Carlsbad Village train station. The site includes several different lots with eight buildings constructed between 1947 and 1981, some which are occupied by long-time tenants such as Hennessey’s Tavern that could resume business in the new structures.

The two four-story buildings will include 79 residential condominiums ranging from 14 one-bedroom units, each with 747 square feet, to four four-bedroom units, each with 2,877 square feet. Twelve of the condos will be reserved for occupants who qualify for affordable housing and will be indistinguishable from the market-rate condos. Four commercial units will occupy the ground floor, and the underground parking will have 143 spaces.

Frontage along Roosevelt and State streets will get new curbs, gutters, sidewalks, bike racks, street trees and landscaping.

The City Council voted 3-1 Tuesday to approve a tentative tract map and site development plan for the project, with Councilwoman Cori Schumacher opposed. Schumacher said the city should be “more prescriptive” with its affordable housing requirements, such as specifying whether the affordable condos should be for sale or for rent. City officials said those details will be determined later.

Mayor Matt Hall and a number of long-time Carlsbad residents praised the project.

“You truly went far and beyond,” Hall said of the applicant McKellar McGowan, a San Diego real estate development firm. “I like the architecture and that you will bring back some existing tenants.”

Parts of the two buildings will be set back from the street to make them appear less tall than they really are. The side facing Roosevelt will only have three stories at the street, and the side facing State will only have one floor at the street, with the upper three stories set back 50 feet. A pedestrian promenade will connect Roosevelt and State streets between the two buildings.

Several speakers said the project is an example of “smart growth,” in which more dense residential development with affordable homes is built near public transit, jobs and services.

“This is exactly where a mixed-income project should be located,” said Angeli Calinog , a policy manager for the nonprofit public transit advocate Circulate San Diego.

“This is one of the best projects we’ve seen in many, many years, and the first one to use the new Village and Barrio Master Plan,” said Gary Nessim, a Carlsbad Village business owner. “It fits the community very nicely.”

While all the speakers at the council meeting supported the project, a few residents wrote letters in opposition.

“It’s sad to see major developments taking over our beach town,” wrote lifelong resident Adam Faringhy. “I beg of the City Council to slow their pace and consider saving some of our local landmarks.”

Others said the project would increase traffic congestion and force out more small businesses.

But most were in support, including Christine Davis, executive director of The Carlsbad Village Association, a nonprofit that promotes business and culture in the Village.

“While a large project, it has been thoughtfully broken into smaller pieces to blend into our downtown environment,” Davis wrote.

Link to Article

San Diego Case-Shiller Index, Sept

What a difference compared to the second half of 2019:

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.40
+1.1%
+1.2%
Apr
257.63
+0.5%
+0.8%
May
260.08
+1.0%
+1.1%
June
261.90
+0.7%
+1.3%
July
263.66
+0.7%
+2.0%
Aug
263.23
-0.2%
+2.3%
Sep
263.26
0%
+2.8%
Oct
262.56
-0.2%
+2.7%
Nov
263.18
+0.2%
+3.9%
Dec
263.51
+0.1%
+4.7%
Jan ’20
264.04
+0.2%
+5.1%
Feb
265.34
+0.5%
+4.6%
Mar
269.63
+1.6%
+5.2%
Apr
272.48
+1.1%
+5.8%
May
273.51
+0.4%
+5.2%
June
274.91
+0.5%
+5.0%
July
278.00
+1.1%
+5.4%
Aug
283.06
+1.8%
+7.6%
Sep
288.11
+1.8%
+9.4%

If we can sustain the monthly 1.8% increase x 12 = 21.6%.

From cnbc:

This index is a three-month running average, so it represents prices from July through September, when buyers were eagerly seeking homes with more space for working and schooling at home due to the coronavirus.

“Housing prices were notably – I am tempted to say ‘very’ – strong in September,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “This month’s increase may reflect a catch-up of COVID-depressed demand from earlier this year; it might also presage future strength, as COVID encourages potential buyers to move from urban apartments to suburban homes. The next several months’ reports should help to shed light on this question.”

Phoenix, Seattle and San Diego continued to see the highest annual gains among the 19 cities (excluding Detroit) in September. Home prices in Phoenix rose 11.4% year over year, followed by Seattle with a 10.1% increase and San Diego with a 9.5% increase.

https://www.cnbc.com/2020/11/24/home-prices-see-biggest-spike-in-6-years-in-september.html

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‘End of Forbearance To Be A Non-Event’

Health, unemployment, stairs, taxes, finances, politics…….selling your home is becoming the answer for everything!

More than 2.5 million American homeowners have stopped paying their mortgages, taking advantage of penalty-free forbearance periods offered by lenders.

What happens when the free pass fades away next year?

Not much, and certainly nothing approaching the flood of foreclosures that defined the Great Recession, according to the emerging consensus among economists. While some homeowners are sure to feel the pain of forced sales, housing experts increasingly expect the end of forbearance to be a non-event for the gravity-defying housing market.

That’s largely because home prices have risen sharply during the coronavirus pandemic. As a result, homeowners who find themselves unable to pay their mortgages when their forbearance periods end likely will be able to sell for a profit, rather than going into foreclosure.

“If they have equity, they can always sell off the house and pay the mortgage,” says Ralph DeFranco, global chief economist at mortgage insurance company Arch Capital Services. “It’s not a great outcome, but it’s less terrible than letting the bank take it and sell it.”

Link to Article

Zillow Raises Appreciation Forecast

I showed three houses over the weekend, and other buyer groups were looking before and after. For every hot buy, it seems like there are 5-10 buyers!

This enthusiastic demand coming in November can only mean that the 2021 market is going to go ballistic. We will get the latest Case-Shiller Index tomorrow, and the month-over-month gain is going to be close to 2% for the San Diego metro area.

Even Zillow is getting more fired up – they raised their forecast of annual appreciation for Del Mar.

+6.9% forecast last month

+8.5% forecast this month!

 

If the high-end goes up 8.5% in the next year, then the low- and mid-range markets should be even hotter!

Here were their forecasts for our local NSDCC areas from last month:

https://www.bubbleinfo.com/2020/11/01/zillow-2021-forecasts/

If we have an uptick in boomer inventory that cools off the market slightly (and the right surge could increase sales) then we should survive quite nicely at 3/4 speed of where we’ve been the last few months!

Hat tip to Booty Juice for sending!

Inventory Watch

In seven out of the last eight weeks, we’ve had more new pendings than new listings! 

This week’s count is 51 new listings, and 92 new pendings!

Could it happen that in 2-3 weeks, we could have more pendings than actives? Looks like it!

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(more…)

Who Is Moving Where?

Ryan was nice enough to provide the latest data (2019) from the U.S. Census Bureau on where Californians are moving, and where our new residents are coming from – at least before the pandemic.

The big winners on a net basis:

More Californians moved there:

Texas:  +45,172

Arizona: +31,486

Nevada: +20,889

Oregon: +20,662

Washington: +14,909

Colorado: +14,265

Florida: +5,936

N. Carolina: +4,160

More People Moved Here

New York: +13,235

Illinois: +9,085

Virginia: +7,512

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Community Property with Right of Survivorship

Question: Our house was titled “joint tenant with right of survivorship” after my husband inherited the property in 1998. We were not married at the time. However we legally married in 2013. Will one of us get the step-up in tax basis when the other passes, or do we have to re-title the house some way? We also want to avoid probate. We live in California.

Answer: As you know, California is one of the community property states that allows both halves of a property to get a step-up in tax basis when one spouse dies. This double step-up can be a huge tax saver, since none of the appreciation that happened before the death is taxed. Other community property states include Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In Alaska, spouses can sign an agreement to make specific assets community property.

In other, common law states, only half of the property gets the step-up to a new tax basis when one spouse dies. The other half retains its original tax basis.

Although assets acquired during a marriage are generally considered community property regardless of how they’re titled, in your case the property was acquired before marriage.

The current title of joint tenants with right of survivorship would avoid probate but it would not achieve full step-up in basis when the first spouse dies, said Mark Luscombe, principal analyst for tax research firm Wolters Kluwer.

So you’d be smart to get the property retitled as “community property with right of survivorship,” which allows you to avoid probate and get the double step-up after the first death. California allows this “best of both worlds” option, as do Alaska, Arizona, Idaho, Nevada and Wisconsin, have this option. In other community property states, you’d have to choose between probate avoidance and getting the full step-up.

More here:

https://asklizweston.com/qa-a-look-at-property-title/

If you’re not sure about how you filed, email me and I’ll send you a copy of your grant deed:

klingerealty@gmail.com

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