365 Marine Street, La Jolla

It is a true honor to have listed for sale my favorite home of all-time!

365 Marine St., La Jolla

3 br/3.5 ba, 2,894sf

YB: 2018

LP = $6,950,000

This custom contemporary was designed and carefully-crafted for over three years to be the ultimate beach house just 100 yards from the sand! The main living area has floor-to-ceiling glass panels that open dramatically to create the perfect indoor-outdoor experience with breath-taking 180-degree ocean views over Marine Street beach! The interior is loaded with so many custom features that they make this home downright sexy! Ample off-street parking and an easy walk to the village too. Architect Mark Morris said in his 20+ years of designing super-custom modern-contemporary homes in the area, this is his favorite project of all-time. The ultimate in modern contemporary design – it’s a trophy property!


California Interest-Free Loans

This will help to keep home prices up:

A top California lawmaker is proposing to spend $10 billion to help families buy homes in the state with some of America’s highest housing prices.

Democratic State Senate Leader Toni Atkins on Wednesday unveiled details of a proposal she’s pushing to create a revolving fund that would provide interest-free loans for up to 30% of the purchase price of a home for low- and middle-income households.

If implemented, it would be the largest program of its kind in the nation, according to the people who designed it. Proponents hope that it will be included in the state budget that must pass by June 15 and go into effect as soon as January. The aim is for it to eventually help about 8,000 families a year.

The proposal calls for the state government to share in any appreciation in the value of houses it helps purchase when they are sold and then invest those proceeds back into the fund.

“The purpose of this is to create a long-term endowment,” said Gene Slater, chairman of CSG Advisors, which advises public agencies on affordable housing and helped design the program. “We’re investing in the future value of the home so we can help other people.”

Under the proposal, California would spend $1 billion a year for 10 years. Participation would be limited to households making 150% of the median income in an area. There would be limits tied to a region’s median home price allowing home buyers in the most expensive markets such as the San Francisco Bay Area to benefit.

In Los Angeles County, households earning up to $120,000 a year could qualify for assistance, while in low-income areas like the agriculture-heavy Central Valley, that number would be closer to $107,000, according to data provided by the researchers who drafted the framework. Proponents want to target certain groups through outreach, including residents of largely Black and Latino neighborhoods and those with high loads of student debt.

The homeowner would repay the loan when they sell or refinance the home, along with a cut of the profit from any appreciation in value based on how much assistance the state provided. If the home price declines, Mr. Slater said, the state would be repaid if money is left over after the purchaser pays back their mortgage loan and recoups their portion of the down payment.

The program would be limited in scope to cover only about 2% of home sales volume statewide in an effort to avoid pushing prices higher.

Participants would be chosen on a first-come, first-served basis, with slots set aside for certain geographic areas and income brackets.

To become law, the proposal would have to pass both chambers of the Democratic-controlled state legislature and be approved by Democratic Gov. Gavin Newsom. A representative for Mr. Newsom declined to comment on the pending legislation. In a statement, Assembly Speaker Anthony Rendon praised Ms. Atkins’s work on the issue but didn’t say whether he supported her proposal.

An unlocked link to the full WSJ article:


Home Buyers Not Deterred

When people are looking for the perfect ‘forever’ home that will last them for a lifetime, any additional cost isn’t going to phase them – or at least it won’t affect the affluent folks.  Most are making it up elsewhere when they sell their previous home or rental properties, inherit big money or receive a gift, and/or sell their businesses/stocks or other assets and just want a trophy property.

If they weren’t bothered by home prices rising 60% to 80% over the last two years, a measly 2% increase in the mortgage rate isn’t going to stop them.


Should Home Buyers Wait It Out?

Like most real estate talk, half of this is horsepucky:

Don’t Let FOMO Drive You

Just because everyone is buying a house, doesn’t mean you should be too, said Donald Olhausen Jr., owner of We Buy Houses in San Diego. “I have seen many people force bad decisions because they have fear of missing out (FOMO). Forcing a bad deal will not rectify itself because there were no other options or because you felt stuck. Being patient in this market is hard, but overpaying for a faulty property will ultimately lead to more regret.”

There Are Markets Within Markets

There is not one universal housing market, but rather “many smaller micro-markets,” said Michael Shapot, Esq., licensed associate real estate broker. “Some of those submarkets are ‘hot, less hot or more hot’ and they may change week by week, or month by month.”

Elisa Uribe, a realtor with Wells and Bennett Realtors added that “real estate is hyper-local,” so consider the source. “You can withstand any market changes if you don’t have to move in a specific time frame.”

2022 Is a Slightly Better Time To Buy

Real estate experts like Marina Vaamonde, the founder of PropertyCashin, said that 2022 would be a better time to buy because, “The demand for residential real estate is still vastly overshadowing the inventory.”

Indeed, now that 2022 has arrived, experts still agree that is the case, even with decreasing inventory. According to Time, home prices will not increase as rapidly and home values will also likely increase at a less vigorous rate than the peak of 2021, which bodes well for buyers.

However, the Fed Just Raised Interest Rates

What made 2021 unique was extremely low interest rates, according to David Friedman, CEO of investment property platform Knox Financial. “There have been very few times in history when we’ve seen 30-year fixed mortgage rates hovering around 3.3% and 15-year mortgage rates slightly above 2.6%,” he said.

However, on March 16, 2022, The Federal Reserve raised rates for the first time in years by 0.25%. What this likely means, according to NerdWallet, is that mortgage rates will follow suit by increasing, meaning homebuyers will pay more in interest.

No One Can Predict the Next Drop

Despite these slight increases in interest rates, and decreases in inventory, this doesn’t necessarily mean the market is going down.

Khari Washington, a broker and owner of 1st United Realty & Mortgage, added, “No one knows if the housing market will drop and when it will drop. Most reports talk about the market slowing in 2023 but not falling. Builders have not built enough housing and interest rates remain low.”

“The right time to buy is when a person is ready,” adds Washington.

Don’t Wait for a Better Price

Waiting can be a gamble, said Jeff Shipwash, CEO of Shipwash Properties LLC. “You could be waiting to purchase with the thought of prices coming down, but…even if home prices do pull back some, if rates increase it will all be for nothing. You may be able to afford a $300,000 house at current rates. But if those rates increase by 1% while you wait, that same payment may be on a $250,000 house.”

Rents Are Sky High

If not buying means renting, consider that “the current rental market is on fire with rents skyrocketing and landlord incentives eliminated,” said Shapot. Renting will not be a cheaper option in the long run.

This Market Is Stable

Unlike the unstable market leading up to the economic crash of 2008, this market is stable, said Jennifer Shannon, a broker associate with Keller Williams Realty. “This market run-up hasn’t been driven by investors, flippers and bad mortgages. It’s been driven by legitimate buyers who are more free to determine where they live than ever.” While demand will start to slow eventually, she says there are no indicators of prices going down anytime soon.

You’re Ready When You’re Ready

“You’re ready to buy a home when you’re ready, not when there’s a frenzy,” said Tabitha Mazzara, director of operations at mortgage lender MBANC. “The frenzy is a seller’s market, so missing out on a frenzy is a good thing for buyers.”

Chase Michels, owner of Compass, The Michels Group, added, “If a client is fully committed to buying and is in the appropriate financial position to do so, then they should be looking. You may buy at a little lower or higher price at different times of year but that is typically unpredictable in a smaller market.”

Link to Article

Being A Homebuyer in 2022

I guessed that we’d have 5% more NSDCC sales this year because I expected a surge of delayed sellers who would finally come to market in order to cash in on the record pricing.

But it’s not happening, at least not yet.

The number of NSDCC listings for the first two months of the year is 32% BELOW last year! It means buyers are only going to have a few shots at winning a home.

Here’s what home buyers will have to endure in 2022 to succeed:

Long Waits – Days and weeks will go by without any quality new listings to review. It makes you soft and it’s difficult to keep your chops up.

Coming Soon – Listing agents will tease you by advertising a home for sale, but you can’t see it yet. It’s not always clear when you can see it, and you better not miss the date because…..

Quick Exposure – Once the listing agent is willing to show the house, they will be overcome with the demand, and will likely hit the panic button.

Many will insist that you show them a bank statement and pre-approval letter just to see the house!  If you get an appointment, it will be limited to a 15-minute period that is convenient for the listing agent AND be subject to cancellation prematurely because they already took an offer before your scheduled time. Hopefully, you don’t have a job or other responsibilities that limit your scheduling. You will get the feeling it is best to quit your job so you can devote your entire life to home-buying.

No Transparency – If you want to buy it, then just make an offer and you will hear back in a few days.

Over Pay – Not only will you have to pay well over the list price to win, but there won’t be any recent sales to justify any of it. The logic and common sense you usually employ will be your enemy here.

Waiving the Appraisal – What was once an insider trick to improve an offer has turned into a standard on every deal. If you refuse, the listing agents will think you aren’t a serious buyer, and move on.

Shorten the Contingency Periods – You will have 7-10 days to sign off all contingencies. You will need to have a great home inspector on speed dial and who can schedule quickly.

60-Day Free Rentback – Listing agents demand free rentbacks whether the seller needs them or not. Those homes that provide immediate occupancy is a bonus for which buyers will pay extra.

No Repairs – Most buyers are submitting a blank repair-request form with their initial offer.

In spite of all those hurdles, there will still be stiff competition for the quality buys. Once the listing agent has collected enough offers that fit the criteria above, they will then huddle with the sellers in the back room and decide on a winner. This is where having a great agent with a good reputation in the community will pay off. Discount agents, out-of-town agents, buyers who are agents, and agents who don’t look good or don’t smell right are ignored and/or sent to the back of the line.

If you can endure that much and successfully get into escrow, you will be treated with disdain and disrespect that makes you will feel like a suspect, not a valued buyer. The contempt that listing agents have for their prey is palpable – they don’t trust that their initial mistreatment of you will be enough of a lesson, and they will keep it coming because they think that’s their job.

And get this – you will probably lose a few bidding wars before you get up to the desperation level of the other buyers.  Oh, you’re not desperate? Then this market probably isn’t for you.

Give it a try and you might get lucky. But if you want a quality home in a good area, then don’t be surprised if the desperation among the competing buyers is higher than you could ever imagine.

The Selling Season Is Here!

The Super Bowl is complete, and the spring selling season begins today!

Judging by the quick jump in the total number of pendings, homebuyers aren’t waiting around. Mortgage rates have risen faster than any time in the last dozen years, and the number of homes for sale is scary low:

There was heavy activity over the weekend, and on the hot buys, the offers seemed to be starting at 10% over the list prices – which is now the new normal.  Waiving contingencies and giving sellers free rentbacks for 60 days will be part of the landscape for the next few months.

Will rising rates cool off the market? Only for those who are on the fringes and sensitive to payment shock. The affluent – the buyers who are controlling the market – are less impacted, and a measly 1% rise in your loan rate only changes the payment by $1,116 per month on a $2,000,000 mortgage.

How long will the 2022 frenzy last?

It should stay hot until one of the following happens:

  • Mortgage rates hit 5%
  • A flood of inventory
  • Mid-summer

By summertime, the pool of highly-motivated buyers should be diminishing, and we’ll be left with those who haven’t been willing to pay these prices. Remember that when you see another crazy-high sales price, there was only one buyer who was willing to pay that much – the rest all wanted to pay less!

San Diego Brokerage Rankings, 2021

I screwed up the national rankings the other day. Donna sent me that clip but it was the 2020 list, not from last year. Anyway, who cares about the national – real estate is local!

In just 3+ years, Compass has become the dominant real estate brokerage in San Diego County, and it’s not close. Even if you add the two CBs together, our volume last year was almost double any other brokerage.

How will this affect consumers in the future?

As buyer-agents are phased out over the next 1-2 years (and it could happen sooner), there won’t be a need for the MLS. Inputting our listings onto Zillow will become voluntary, and only used if the homes can’t be sold in-house.

It will be just like the commercial side of real estate, where all the good deals are kept in-house, and only when they don’t sell, are the listings inputted onto LoopNet.

San Diego: Buyers More Critical, But Stable

This company surveys new-home and resale agents every month, and this report confirms more of what we’ve been experiencing:

  1. A few more listings (but NSDCC listings are dropping off now).
  2. More listings not selling/buyers getting pickier.
  3. Buyer traffic is steady, and better than expected.

The Home Listings Index dropped from 70 to 37.5, which means the number of listings increased, which is bad for the new-home agents.  But for resale agents, it’s good!

San Diego County Real Estate, August 2021

My favorite pet peeve of the media insisting that ‘home prices’ and market conditions are interchangeable with the direction of the median-sales-price made the front page of the newspaper today.


But there is more to it.

Here are other factors they mentioned in the story:

  • The number of listings in August were 47% fewer than in August, 2019.
  • The median sales price for condos hit an all-time high, as more buyers get priced out of single-family homes and are forced to consider other alternatives.
  • The quality of the homes for sale was crap.

The truth?  Due to seasonality – which does play a role as summer closes out – it is better to compare to previous Augusts, not July. But the best indicator of market health is the number of sales:

San Diego County Detached-Home Sales, August

Number of August Sales
Median Sales Price
Median Days on Market

There have been fewer listings (-16% YTD) than in 2019, yet there were MORE AUGUST SALES!

Never mind that the +15% YoY increase in the median sales price was an all-time high for August, and ignoring that the median market time was nearly identical to August, 2020 (which will go down as the most hysterical frenzy in the history of real estate), just that the number of sales last month were similar to previous Augusts indicates that the market is fine.

Yet the UT headline writer wants you to think there’s a problem.

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