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Contractors are Busy!

For those who are thinking of selling next year and plan to do some improvements, don’t wait to begin.

In fact, start today!

Yesterday, I contacted three different flooring contractors, and all were booked into December.  Our GC is currently booked for two months, our pool-repair guy has work scheduled for the next FIVE MONTHS, and our plumber gave up and suggested that we find someone else.

If you want us to provide an initial consultation and give opinions of what repairs/improvements would be smart to complete prior to selling, feel free to contact us – now. We can call in favors if needed – the pool guy got started within two weeks!

It made me wonder how many homeowners were in the hunt for a new house over the last 1-2 years, and have since given up on moving and decided to remodel instead.

No matter how small the percentage, it means the demand for homes for sale will be increasingly more dependent upon the out-of-towners who don’t have a house here yet.  Their desperation level is higher than our current homeowners here who are comparing to what they already own……and who are finding it more difficult every day to justify a move.

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More slides from the C.A.R. forecast:

They are forecasting a 5.2% YoY drop in sales in 2022, after we will likely set the all-time record for sales here in 2021.  They are probably considering the slowdown in pending sales:

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They also showed how 70% of the business is done by 30% of the realtors….and the rest of the agents are barely in business with less than two sales per year:

Get Good Help!

San Diego County Median Sales Price, History

While we’re talking about the median sales price of detached-homes in San Diego County, let’s review the last ten years. There usually is some dropoff towards the end of the year:

The last frenzy in 2013 saw the median sales price increase 26% between January and September.

The Greatest Frenzy of All-Time started with closings in May, 2020 that had a median sales price of $660,000. It peaked in June/July at $875,000, which is a 33% increase and lasted five more months than in 2013. I’m happy with it, the fun was great while it lasted, and now here we are.

Well, at least until 2022.

There was some hesitancy in the market at the end of 2013, but it took off again in 2014.

Look at the difference though (the graph is interactive).

The increase was only +7% between September, 2013 and June, 2014 before it decelerated again – and the median sales price in November was back to where it was in the previous September!

Sellers should appreciate the big boost we’ve had, and the uncertainty of the future.  Don’t attempt to time the market for max return – it’s great where it is today.

Why Sell Your Home Now

School is back in session and the holidays are right around the corner – it’s the time of year that potential home sellers start looking forward to the next selling season, instead of moving in September/October.

Are you thinking of waiting until 2022? Here are my reasons for selling now, instead of later:

1. The Shine Is Off The Frenzy.  Those who are pulling back on their enthusiasm:

JBREC – Two of three buyer categories are down slightly (above chart).

CoreLogic – they only predicted a gain of +9.1% in San Diego pricing over next 12 months, which is way less than the +23.7% since last July. Don’t be surprised if +9% becomes the new +3% of predictions – it’s a lot higher than the previous safe bets without being double-digit.

Zillow Offers – backtracking 5% on price commitments made 2-3 weeks ago.

Navy Fed – suspended the issuing of home-equity loans ‘temporarily’.

Refi appraisals – heard of several appraisals coming in low as market softness creeps into their minds.

2. Interest rates – They have nowhere to go but up, and it’s just a matter of when. Once they start, home buyers will want something in return from sellers.

3. Boomer liquidations – There probably won’t be a mass exodus, but all you need is 2-3 on your street.

4. Fewer Fix-Ups – The current inventory is so thin, sellers are getting away with murder now. If there was an index that measured how close sellers got to selling ‘as-is’, we’d be setting records today.

5. Safe – You know what you can get today, and let’s admit – it’s a lot higher than it used to be. Cashing out now instead of risking any of the above getting worse in 2022 is the safe bet. How much are you hoping to hold out for next year? Another 2% or 3%?

When is the best time to sell? When everyone else isn’t!

Home Seller Survey

An excerpt from Zillow’s seller survey:

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.

https://www.zillow.com/agent-resources/blog/potential-sellers-gaining-confidence/

Solutions for Potential Sellers

The real estate market is red-hot, prices are higher than ever and buyers are begging for inventory!

Many homeowners want to take advantage of this opportunity but are worried where they’ll go next. It’s a tough market to be a buyer, but this shouldn’t discourage you from selling your home for the highest price ever – AND we can help! Here are a few solutions:

1. Longer escrow. Gives you time to secure your next home.

2. Rent back. In the past six months, we have arranged rentbacks of 3-6 months for our sellers!

3. Sell your home contingent upon buying. We can lock your home’s buyer and price, and then go shopping!

4. Move in with relatives for a bit. Nothing like some quality family time!

5. Buy your next home first – using a Compass bridge loan. Go for maximum convenience!

6. Find a short term rental in the area. Spending the summer in a beach house doesn’t sound that bad.

Don’t miss out on the GREATEST REAL ESTATE FRENZY OF ALL TIME!

Call or text Jim at 858-997-3801.

Zillow Buying Houses For Zestimate Value

There are a few Zillow issues to unpack here, so let’s start with them saying they are willing to buy your house for the amount of the zestimate – which is fine, if you don’t care about cashing in on the actual value.

In their press release, the boss claims that the zestimate’s nationwide median error rate for on-market homes of 1.9% which sounds simple enough – for years they have been adjusting their zestimate to the list price once a home goes on the market.

But once my new listing went on the market, they didn’t adjust the zestimate upward.

Would you sell your house for $1,336,035, when Jim the Realtor says it worth $1,599,000?

Factor in that Zillow charges more than I do, and it would mean that hiring me to sell your house would net you about $300,000 more – and that’s if we sell for the list price (it might go higher).

The big difference?

I don’t spend $100 million per year in advertising – they will reach people that I don’t reach.

Tell people to use me instead!

Link to my listing on Zillow

Sprucing Up to Sell

Homeowners fixing up their homes to list this spring will have to decide where to put their time and money to get the most bang for their buck. Zillow has been there, and the practical tips and tricks their experts have learned after selling 10,000 homes could help you sell yours.

Zillow-owned homes, acquired through Zillow Offers in 25 markets nationwide, are carefully evaluated, repaired and cleaned before they hit the market. Zillow invests in the projects that make a home safe, clean and functional, and each time learns more about what appeals to buyers. By sharing these tips, Zillow hopes to help all sellers prioritize their home prep projects.

Pick the Perfect Paint Color

Painting is one project nearly all sellers take on before putting their home on the market. It is an affordable home improvement project that has a high return on investment. But when you’re thinking about resale, you’ll want to be strategic about the colors you select.

When Zillow needs to freshen up the walls before listing a home for sale, it uses Behr Premium Plus paint in either Aged BeigeCampfire Ash or Polar Bear. Neutral greige or taupe paint colors appeal to the widest group of buyers and don’t distract from a home’s best features.

Fix your Faucets and Fixtures

The two most common items Zillow repairs or replaces before listing a home for sale are faucets and light fixtures. A buyer may jump to the conclusion that a leaky faucet is a sign there may be water damage, while a broken fixture could inaccurately signal potential electrical problems. Either can suggest a home hasn’t been generally well-maintained.

These are both DIY-friendly fixes that could boost your home’s value. If you’d rather hire a professional, a Zillow and Thumbtack report finds you can expect to pay, on average, $205 to replace a faucet and $380 to replace a light fixture.

Clean the Carpet

A clean carpet is critical if you want your home to make a great first impression. Steam cleaning will often do the trick, but if your carpet is torn or has permanent stains, you’ll want to replace it.

Zillow uses Mohawk brand carpet in either Charger Classic or Scout Highgate. Selecting a high-performing, stain-resistant carpet in a neutral taupe color will appeal to the most buyers and add value to your home.

Sweat the Small Stuff

Zillow takes care of all the items that make life easier for the home’s next owner. These items include landscaping, servicing the HVAC system, and replacing all light bulbs and batteries in smoke and carbon monoxide detectors.

By taking care of these items before putting your home on the market, you can boost curb appeal and give a potential buyer confidence that your home has been well-maintained.

Say No to a Full Reno

Home improvement TV shows often suggest you need a gut renovation to get top dollar in resale. However, Zillow research finds big renovation projects hardly ever pay for themselves when it comes time to sell, with a few exceptions.

Zillow rarely completes any major upgrade to a home that would dramatically alter its footprint or its value. Instead, Zillow focuses on the projects that make a home clean, safe and functional for a buyer, repairing items instead of replacing them when possible.

“Buyers often want to put their own stamp on a home and have it reflect their taste,” says Lindsey DellaSala, a broker with the DJ and Lindsey Team in Jacksonville, FL. “Let’s say you decide to upgrade your backsplash before selling. The trendy statement tile you love may not be what a buyer is looking for, and that could hurt, rather than help, your chances for a speedy sale.”

“When a buyer walks into a Zillow-owned home, they know it is move-in ready and they can add their personal touches over time,” says Claire Caldwell, Senior Director of Renovations at Zillow. “By creating that same kind of blank canvas in a safe and clean home, you can help buyers better envision their lives there.”

Embrace Tech

Online curb appeal is more important than ever, as most home shopping has gone virtual. Zillow-owned homes are listed for sale with professional photography, a floor plan with dimensions and a virtual 3D Home tour that gives shoppers an immersive experience of a home from the safety and comfort of their own living room.

Sellers can harness the power of tech to showcase their home’s best features by using the free 3D Home app to create a virtual tour, and explore other digital tools such as virtual staging.

(JtR: Big difference between ‘high-tech’ and robotic, which is the sales method they are pushing)

Link to Article

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.

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