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2021 Moving Survey Results 2

There was additional distribution of my moving survey after the previous report last week.

Of the 2,872 visitors who have looked at the survey, 130 (or about 5%), at least answered a question, which is typical.  Here are the final results:

Q1. I liked that 28% of the respondents live outside of San Diego County. Thanks for playing!

Q2. Most people aren’t planning to move (70.34%). But of those who are planning to move, MORE THAN ONE-THIRD ARE LEAVING CALIFORNIA!

Q4. The traditional April-Sept time frame was preferred by 60% of those planning to move. But 23% of those who are moving next year will jump right on it in the first quarter.

Q5. The pandemic didn’t cause 92% to move, mostly because Covid-19 is temporary, and moving is permanent. People might think about moving because of Covid-19, but the pandemic won’t drive the truck up to the house.

Q6. The answer of ‘Getting My Price’ bumped up nicely from its last-place finish previously.  Going Through My Stuff is still a big concern, but Finding Next Home is #1, and rightfully so.

Here are some of the anonymous comments left – thank you for the warm thoughts!

Jim, so sorry I’m late to the survey. I appreciated the results you’ve already shared. I own two properties in OC, (reside in one, rent one) and have been a home owner for 15+ years. I have read your blog for 10+ years, but only check it weekly, rather than daily. I enjoy your video tours, thoughts on home layout and thoughts on how to help increase the value of one’s home. I like learning about the SD area and market through your blog. FYI, the biggest thing keeping my family in CA is our three school-aged children and an older parent who is nearby and will eventually need help. It’s hard to uproot. My own parents, lifelong Californians, retired and left for Arizona two years ago and are very happy. Last year, my husband’s job offered to relocated us to Utah. We seriously considered leaving, but eventually declined and he found another job internally at the same company so that we could stay where we are. When we thought of the pros and cons, we would very much miss the CA weather and strong ties to our community. We are thankful to live in a proudly red city in OC. We are not happy with the direction CA as a state is headed, but will stay for the sake of our kids and the sunshine. Thanks for your blog. I enjoy your expertise and also your levity!

People may be moving because of covid but what I have found more of is people wanting to move because they are trying to get away from far left liberal policies in Cali.

We love Jim & Donna who helped us buy our first home together.

Jim Klinge is an awesome realtor. We love his videos and he’s spot on when looking at local real estate trends. Jim is great to work with and we have already recommended him to our friends.

Best lock pick ever.

You and Donna are the best. Stay healthy so if we decide to sell decades from now we can depend on you!

Bad Neighbors and Selling Your Home

Bad neighbors aren’t just annoying. They can cost you real money when it’s time to sell your home.

A nearby property’s overgrown yard, peeling paint and clutter can easily knock 5% to 10% off the sale price of your home, said Joe Magdziarz, the president of the Appraisal Institute and a real-estate appraiser with 40 years of experience. A true disaster — a junky home in deplorable condition and a yard packed with debris — could cost you even more.

Even when real-estate markets were in better shape, messy neighbors caused problems. Kamie Dowen put her Harrisburg, Pa., home on the market five years ago but had problems selling because of a nearby property.

Toys littered the lawn, even in winter. The porch sported “a pumpkin that was two years past due,” Dowen said. A garage door, damaged after the owner ran into it with his car, was never fixed.

Frustration can lead to guerrilla tactics. Jeanine Brydges Watt of Windsor, Ontario, got so fed up with her neighbors’ yard that she waited until they went on vacation, then mowed the lawn and threw out the trash, which included old diapers and split-open bags of garbage.

Watt said she wasn’t worried about being arrested for trespassing. The messy neighbors were renters and probably thought their landlord had done it, she said. And Watt’s other neighbors were thrilled.

“If they had been asked, none of the other neighbors would have ratted me out,” she said. “They were happy we cleaned up the eyesore.”

You may not be willing to risk arrest, but there are other tactics you can try if a neighbor’s property is hurting your home’s value.

If your neighbor is elderly or disabled and simply not able to maintain her property, for example, you may be able to help her find free or low-cost services that can help. Habitat for Humanity’s A Brush with Kindness program offers exterior painting, landscaping, weatherstripping and minor repairs to low-income homeowners who can’t care for their homes because of age, disability or family circumstances.

You can check with the Eldercare Locator to find other resources for home maintenance in your area.

If your neighbor is simply messy or indifferent, you might want to try these strategies:

Start with a conversation. If your neighbor is a drug dealer, owns dangerous dogs or is otherwise belligerent, you won’t want to risk knocking on the door. Otherwise, approaching your neighbor in a friendly, low-key manner can be a good start.

The script could go something like this: “We’re going to be putting our house on the market soon, and we really want it to show well. But we’re afraid that people who don’t know what nice neighbors you are might be a little put off by the condition of your yard right now. It’s so hard to keep up with everything, isn’t it? We’d be more than happy to help you tidy up a bit if you’d like.”

Find the owner. If your sloppy neighbors are tenants and the direct approach doesn’t work, or if the home is vacant, you’ll want to track down the owner. A real-estate agent can help you, or you can visit your county property-tax assessor’s office.

Then send a letter to the landlord or lender, complete with photos of the problem, and request action in getting the property cleaned up, says Ilyce Glink, the author of several books on real estate.  If you get no response, consider giving the contact information to other fed-up neighbors and ask that they send letters as well.

“If a property has been foreclosed on, you can complain — loudly — to the lender to take care of the property. Go all the way to the top of the food chain, to the chief executive officer, and ask for assistance,” Glink said. “You should also complain to your state mortgage regulator as well to the Office of the Comptroller of the Currency, if it is a big national bank.”

Enlist help. If you have a homeowners association, make a formal request that it take action. If it’s reluctant and you run out of other options, you can sue the homeowners association in small-claims court, Glink said.

Before you do that, however, try to enlist local government officials. Your city or county public-health department may be able to step in, particularly if trash or other unsanitary conditions are attracting vermin. The city or county building department should be notified of other obvious hazards, such as holes in a roof or a collapsing porch.

If you can’t get local agencies to help, appeal to your elected representatives at the city or county level. Sometimes these folks can kick the bureaucracy into gear. A real-estate attorney can tell you if you can pursue a lawsuit against the neighbor, but typically these are expensive and can drag on for months if not years, making them impractical for most people trying to sell a home.

Practice mitigation. If your best efforts don’t work, a privacy fence or tall hedge, if allowed, could help screen the problem. Otherwise, do what you can to make your own property shine and divert attention from the neighbor’s mess.

Peter Anderson of Shakopee, Minn., who runs the Bible Money Matters blog, said he had a “fun time” selling a town house a few years ago because of neighbors across the street who had garbage in their driveway, a truck up on blocks “and a hundred wind chimes hanging from their garage.”

“Despite that, it was a nice enough neighborhood,” Anderson said, “and we finally were able to sell because we priced our home realistically, we staged our house to make it look like a model, painted, fixed up any problems and just made the home a very nice place to be.”

If you think you have it bad, well, it could be worse:

2021 Frenzy Preview

While the 2020 is winding down and we look forward to next year, I’ll occasionally repost the unique factors that will have impact on the 2021 selling season. Let me know of any others:

Ultra-Low Mortgage Rates – Rates around 3% are expected to continue through 2021, and they are probably the #1 factor that keeps buyers interested – because you can buy more house!  This is especially helpful for those who are trying to move up – if their current rate is higher, then getting 3% or lower helps to offset the increase in price.

Vaccine News – Just the thought of Covid-19 coming to an end will energize the populace, and the motivated buyers & sellers will want to get a jump on it – even before any actual vaccine is readily available.

Work From Home – This trend frees up many to move.

Unemployment – Older homeowners will grapple with taking a pay cut or quitting the job-search altogether. Retiring earlier than expected won’t seem so bad when their home’s equity has never been so high, and more boomer moves that would have happened in 2022-2025 will be pulled forward.

Eviction Ban – With both tenants and landlords being affected, this new frustration could cause more transactions that are rushed (buyers pay too much/sellers giving it away).

Politics – No matter who wins the presidential election, it will be the last straw for some.

Divorce Rate is Up 34% YoY – Technically, this could add more buyers and sellers, but realistically those coming out of a divorce will be more likely to split their equity and take a break.

Prop 19 – Our association swears that more 55+ seniors will move if Prop 19 passes, so if it does, we’ll have more sellers and buyers. I still expect Prop 19 to be soundly defeated.

Capital-gains tax.  From the WSJ: Biden will raise the tax on the capital gains of high earners to the same rate as wage income, increasing the rate to 43.4% (39.6% plus Medicare 3.8% investment tax) from 23.8%. Mr. Biden on Thursday estimated that these increases on high earners would raise $92 billion, but that’s before they put their tax lawyers to work. Biden has also said he will eliminate the 1031 exchanges, but all of the above will need Congressional approval. Just the thought could cause landlords to hurry up their plans of selling.

Don’t Own Here Yet – Renters, first-timers, and out-of-towners have a different look at our home values because they don’t own here yet.  They are more motivated to get their hands on something, and will pay more than those who are just trying to do better than what they already own.  The market will hinge on buyers in this category!

Those are TEN reasons why 2021 will be the most exciting real estate market ever!

Get Good Help!

Underprivileged Get Foreclosure Privilege

Another story demonstrating how free enterprise is being squeezed:

California is taking steps to avoid a repeat of the conversion of thousands of single-family homes from ownership to rental properties as occurred during the Great Recession. In late September, the state’s governor Gavin Newson signed a bill that will give tenants, affordable housing groups and local governments the first crack at buying foreclosed homes.

As homes were foreclosed by the millions following the housing crisis, Wall Street stepped in and investors, according to Zillow, gobbled up over 5 million homes, turning them into rental properties. They were bought as individual homes, via bulk sales of lender real estate owned (REO), or as distressed loans upon which the investors later foreclosed.

It was expected that these houses would return to owner-occupied status once home prices recovered and the investors, largely big hedge funds, could realize a profit. Instead they have found ways to manage the geographically dispersed properties and continue to hold hundreds of thousands of them.

This has been problematic. While the investor purchases helped put a floor under home prices at a time when there was little appetite for buying distressed properties, it has continued to reduce the inventory of available homes for sale. There have also been many complaints of tenant abuses and deferred maintenance. Many of these were spotlighted last March in a New York Times Magazine article, “A $60 Billion Housing Grab by Wall Street” by Francesco Mari. We summarized her work here.

The California legislation, SB1079, was the brainchild of an activist Oakland group, Moms 4 Housing. It bars sellers of foreclosed homes from bundling them at auction for sale to a single buyer. In addition, it will allow tenants, families, local governments, affordable housing nonprofits and community land trusts 45 days to beat the best auction bid to buy the property. It also creates fines of as much as $2,000 per day for failure to properly maintain properties.

So far, the COVID-19 pandemic has not resulted in massive foreclosures due both to mortgage forbearance programs and a foreclosure moratorium put in place by the U.S. Congress’s Cares Act. Still mortgage delinquencies are rising, and weekly first-time unemployment claims have remained above 800,000 since March. Most forbearance plans are due to expire by next March lacking further government action.

SB1079 goes into effect on January 1, 2021.

http://www.mortgagenewsdaily.com/10132020_wall_street_landlords.asp

Covid-19 and Homeownership

This chart shows the generational changes among non-homeowners about their interest in owning a home.

Being interested doesn’t mean they are buying, necessarily, but it’s a step in the right direction – especially for the millennials, who picked up the largest net gain of +15% (blue minus red).

https://morningconsult.com/2020/09/28/millennials-economy-homeownership/

The good doctor has a more-gloomy outlook here:

http://www.doctorhousingbubble.com/young-americans-moving-back-home-because-of-covid-19-nearly-40-percent-of-younger-millennials-say-the-pandemic-has-them-moving-home-again/

One-Story Country Estate with 2br ADU

They say that everyone is fleeing the urban markets for the country, and this is a good example of how much further your money will go.  It is fairly close to town too – you wouldn’t really need to change doctors, etc. and for those who need a top-notch granny flat, have I got a deal for you!

29780 Reza Ct., Vista, CA 92084

4 br/4.5 ba one-story house

2 br/1 ba guest house above the garage with kitchen and laundry

4,200sf

YB: 2010

3-car garage with workshop

1.46 acres (yet low maintenance)

Bonsall schools

LP = $1,195,000

https://www.compass.com/listing/29780-reza-court-vista-ca-92084/623947343538281105/

2 br/1 ba guest house with laundry above garage

Clearing Out Your House

Even though the market is blazing, many soon-to-be home sellers are going to wait until the Spring Selling Season of 2021….and take their time getting their house ready.  Because it will be hard to tell if it will be a frenzy or a glut until April or May, it won’t be a bad idea to prepare now, and be ready to go early in the season, just in case.

October would be a good time to clear out some stuff!

In the first edition of The Last Move, these were the two companies mentioned to help you:

If you need to donate your belongings to a good cause, then Rancho Coastal Humane Society is a good option because they will bring a big truck to your house and carry out most everything:

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Hauling the remainder, including mattresses, can be done by Junk King in Carlsbad.

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Here are a few others:

The San Diego Habitat for Humanity ReStores are home improvement discount stores with a simple premise: by selling new and gently used donated goods, we can fund the construction of new Habitat homes in San Diego County.  Here is my article about their Carlsbad store:

https://www.bubbleinfo.com/2020/06/06/restore-carlsbad/

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We have had good luck with Facebook Marketplace too.  You can either go onto the general page and take your chances, or get into one of the closed local groups where you can probably count on having a large audience of bargain shoppers nearby.

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We have a seller who has had great luck with the mobile app OfferUp, especially when giving away stuff for free.  People respond within minutes, and come to your house to pick up stuff from your driveway:

https://offerup.com/

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If you are thinking about selling now or later, make it easier on yourself and get an early start!

The October Surprise

Today’s coronavirus news adds a new dimension to our real estate market, doesn’t it?

Or does it?

We can probably count on one thing to happen.

This will be the last straw for those home sellers who have been languishing on the open market for more than 30 days. They have heard how hot the market has been for others, but based on their overly-optimistic list price, their motivation wasn’t that great to begin with – and they are tired of the inconvenience that comes with not selling.

Those would-be sellers will be de-listing their homes, and waiting until next year.

Should buyers pack it in and wait until next year too?  Not really – you’re still looking for the right house, at the right price, and it could happen at any time. Plus, if you were ever going to get a decent price on a home in this era, it would be in the next month or two when the competition should be dwindling.  There will be more buyers in spring – it’s just a matter of whether sellers will come out in droves or not.

But consider this:

Any sellers who are still for sale on October – especially those who go on the open market after today – should be highly motivated to sell.  Nobody is going to casually throw their home on the market just days before the biggest election in history with the incumbent fighting a potentially life-threating virus.

Get Good Help!

Doom?

After another weekend of multiple-offer situations where the listing agents made no attempt whatsoever to create a bidding war, and instead just shut down the showings, it’s hard to believe there is any downturn coming our way. When you can get a mortgage rate in the twos, the demand is unyielding.

But some authors still want you to believe that doom is around the corner – they should talk to realtors on the street!  An excerpt:

The price of low-tier housing in San Diego County skyrocketed after the latter half of 2012. 2015 experienced another price increase, due to the boost given by decreased mortgage rates throughout 2015 and 2016. Lower mortgage rates free up more of a buyer’s monthly mortgage payment to put towards a bigger principal. Thus, San Diego’s high home prices continued to find fuel from increased buyer purchasing power.

But in 2018, home price increases sharply declined in reaction to slowing sales and rising interest rates, which began in late-2017. Home prices have since turned back up, but today lack the fundamental support of home sales volume to continue.  The annual pace of increase is now just 5%, lower than in recent years when the annual rise averaged around 10%.

Accurate home price reports run about two months behind current events. Even when caught up, sticky prices tend to persist several months beyond the moment when home sales volume begins to slow. Starting in March 2020, economic volatility and shelter-in-place orders caused home sales volume to decline dramatically. However, historically low interest rates have provided a boost for buyer purchasing power, which has propped up home prices thus far.

Later in 2020, the impact of record job losses will see downward pressure on home prices. The overall home price trend for the next couple of years will be down, the result of job losses and plummeting sales volume. As during the 2008 recession, the drop in sales volume and prices will first be most volatile on the coast, before rippling outward to inland areas.

Link to Article

Sales and pricing should be directly connected to inventory.

When there is hardly anything to buy, sales may decline, but pricing would stay the same or go higher because only the quality homes would be selling.  A surge of homes-for-sale in 2021 would fuel the demand and energize the marketplace…..to a point.

There will be a fine line between frenzy and glut!

Get Good Help!

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