The San Diego housing market is a popular choice for those who are leaving the Bay Area (population of 6,404,512 in the five counties). It’s looks like more are coming – a report from sfgate:
Joint Venture Silicon Valley, in partnership with the Bay Area News Group, polled 1,610 registered voters across five Bay Area counties: Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara.
A shocking 71% of respondents said the quality of life in the greater Bay Area is worse now compared to five years ago. Fifty-six percent of respondents said they are considering leaving in the next five years — including 53% of respondents who work in the tech sector.
“It’s the cost of living, high housing costs. I think that is the dominant thing. It’s housing housing housing,” said Russell Hancock, President and CEO of Joint Venture Silicon Valley, in a press briefing. “…That is driving almost all of the results.”
Hancock said the 53% figure is the highest percentage of people who have said they want to leave the Bay Area compared to previous polls conducted outside of Joint Venture.
Indeed, an overwhelming majority of respondents said it’s high housing costs (77%) and cost of living (84%) spurring their desire to seek out greener pastures. Homelessness, wildfires and drought were also issues respondents considered when mulling the decision to leave the Bay Area.
“We’ve long been a high-stress region. Staggering housing prices, rising homelessness, a stark income divide and a host of sustainability challenges have had us on edge for some time,” Hancock writes in the introduction to the poll. “But when you toss a highly infectious disease into the mix you get a smothering amount of anxiety.”
But as Hancock noted, these feelings go beyond the pandemic and its challenges.
“We’re split (48% to 52%) on whether the Bay Area is headed in the right direction,” he said.
The poll paints a disturbing picture of life in the Bay Area, but it’s not all doom and gloom. About 65% of respondents said “they feel a strong sense of belonging to the Bay Area” — even more so than they feel connected to their neighborhood and city. Many (66%) applauded their employers’ response to the pandemic and now feel differently about their work-life balance.
As Hancock pointed out in the briefing, polls “tell us how people are thinking. And that’s worth knowing.”
“Perception,” he added, “is also a form of reality.”
If there were 56% of their population who left, it would equal 3,586,526 people – which would create a whole new experience for those who stay! But we know that talk is cheap, and once all the other variables are considered, most people don’t move.
But we’ll probably get a steady flow for the foreseeable future.
Pacific Legal Foundation obtained public records from San Diego and Riverside Counties (two of the most populous counties in the state) to determine whether local governments are abiding by the new 60-day permit-approval period, which took effect in January 2020.
Unfortunately for California residents, local governments are failing miserably to abide by the new state law.
San Diego County took a median of 187 days to issue an ADU or Junior ADU building permit after January 2020. Permits issued prior to the new law took a median of 112 days to be issued. Only 52% of permits issued prior to the new law fell within the previously required 120-day mark.
Currently, only 5% of permits issued by the county met the state’s 60-day deadline. Many times, the permitting process is held up by excessive fees or approvals needed from other departments within the county. As of July 21, 2021, there are 587 pending applications, of which 90 were submitted prior to 2020. If these permits were issued today, the median wait time would be 255 days after the application was submitted.
The government, and society in general, needs to recognize how dire the housing crisis is for the citizens. We’re going to have continued upward pressure on home prices and rents, and building ADUs is one of the best ways to alleviate the problem. It doesn’t matter if the resistance by local governments is conscious or sub-conscious, the ADU-approval process needs to improve radically to implement the will of the people, and slow down prices.
Shiller has been too conservative on his predictions because he’s an ivory-tower guy. If he were to talk to potential home sellers, he’d find that there aren’t many – if any – who have to move so badly that they would sell for “substantially lower” prices. The next phase after the frenzy will be the stagnant/plateau stage where the demand thins out and sellers wait for that perfect nuclear family with 2.2 kids to come along some day.
Nobel prize-winning economist Robert Shiller is worried a bubble is forming in some of the market’s hottest trades. He’s notably concerned about housing, stocks and cryptocurrencies, where he sees a “Wild West” mentality among investors.
“We have a lot of upward momentum now. So, waiting a year probably won’t bring house prices down,” Shiller said.
According to Shiller, current home price action is also reminiscent of 2003, two years before the slide began. He notes the dip happened gradually and ultimately crashed around the 2008 financial crisis.
“If you go out three or five years, I could imagine they’d [prices] be substantially lower than they are now, and maybe that’s a good thing,” he added. “Not from the standpoint of a homeowner, but it’s from the standpoint of a prospective homeowner. It’s a good thing. If we have more houses, we’re better off.”
With the rollout of vaccines against COVID-19, 70% of homeowners in a recent Zillow survey say they would feel mostly or completely comfortable moving to a new home when vaccines are widely distributed — and 78% of homeowners who say widespread vaccine distribution would impact their decision to move say such distribution would makes them more likely to move.
“We expect that the vaccine rollout will likely boost inventory, as sellers become increasingly willing to move despite COVID-19 — resulting in greater numbers of new listings beginning this spring,” says Chris Glynn, principal economist at Zillow. “That injection of inventory could give buyers more options and breathing room in a competitive market. The vaccine, however, will also likely add to already-strong demand, given that most sellers will become buyers as they trade in for a home that better suits their new needs.”
Zillow research shows that 63% of sellers are also buyers. And, as buyers, they have specific reasons for selling. A recent Zillow survey shows that homeowners who are thinking of selling in the next three years have a variety of reasons for doing so.
Additionally, 26% want to live closer to family, 24% wanted out from being responsible for yard work, 14% say their family or household is getting larger and 13% say they can no longer afford their home.
Nearly 40% of homeowners who are considering selling within three years (39%) say they think they’ll get a better price if they wait. They’re not necessarily wrong — although waiting comes with tradeoffs, according to Zillow economist Jeff Tucker.
“Potential sellers are likely correct that home prices have yet to reach their peak,’’ Tucker said, “but in the long run prices tend to rise, so there’s no clear ‘right time’ to sell.”
The catch, he said, is that waiting to sell may raise the cost of trading up to their next home if mortgage interest rates rise.
Susie says the Boise market is on fire, Noodle said that every house in North Phoenix sells in 3-4 days, home prices in Austin are similar to what they are here (according to one buyer) and even Kayla is seeing multiple offers again in Manhattan!
The potential sellers here who want to list their house for sale so they can leave the state have to be concerned about buying their replacement home, if they haven’t bought one yet.
How many will give up and say, “heck, it’s better here anyway”, and pack it in, instead?
Will a surge of supply over the next 3-4 months – when we need it the most – be stymied because of the difficulty with buying a home elsewhere?
As crazy as it is right now, it could get crazier! It probably will!
I have recently stumbled upon your blog and find it very interesting as I am an appraiser in San Diego. I wonder if anyone has considered that the low inventory levels are in part because home prices are going up so fast why would anyone want to sell something that is going to be worth 10K, 20K, 50K more within just months. For example my home according to Zillow is up 22K in the last 30 days. Something else to consider that I have not seen mentioned….
Are sellers paying attention that closely? If so, then you’re right – it’s possible. Add that extra supply to the post-covid/Prop-19/usual-spring listings and there could be a real surge. But the worst thing that will happen is there will be 3-4 houses for sale in your neighborhood, instead of one or two.
Do sellers risk it? Most are already making $200,000 to $1,000,000+ profit……are they going to purposely hold out in hopes of picking up an extra $50,000? Maybe, but I’d guess that when and where they are moving probably plays a bigger role in their decision-making.
Sellers are indeed holding back for some reason.
In the first nine days of March last year we had 148 new listings between La Jolla and Carlsbad, and so far we’ve only had 90 this year. More will be added to that nine-day total this week, but we’re still well under where we’ve been in previous years. March is when the inventory really picks up, historically:
The Frenzy of 2013 was red-hot for about a year. If the same happens this time, it means the market should flatten out by July as rates increase and buyer exhaustion sets in.
The bump in rates over the last two weeks just threw gasoline on the fire for those who could find a house to buy. But an extended run-up – especially if we get to 4% – should cool things off.
I have two closings with buyers this week. One paid $135,000 over list, and the other paid $100,000 over.
Over the weekend, I had buyers make a highest-and-best offer that was $207,000 over list….and lost.
There is virtually no transparency – just take your shot and pray. Don’t think, and don’t blink!
The latest from Altos data @mikesimonsen: financial markets are correcting dramatically + #mortgagerates are at their highest in 2 yrs. How quickly will this impact #homebuying decisions?: https://hubs.ly/Q012SS230
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!