The panic ensues over the coronavirus, but people want and need to move too – especially as mortgage rates climb higher. What can we do to keep the real estate market hopping?
Here’s what can we do for home sellers.
Those who are concerned about strangers coming into their house should go ahead and move to their next home first. We can give you a Compass Bridge Loan to access up to 90% of your equity in your current home to purchase your next one, and we’ll front up to $50,000 for home improvements and staging to make selling your old home more effective. Let’s go this route on every home sold – it’s easier on you!
What can we do for home buyers?
The COVID-19 might be what finally gets agents to do video tours of homes. Selling homes by video is a real possibility, and if listing agents just walked around the house with a camera like they were showing it in person, then every potential buyer could see it from the comfort of their own home. If making a film makes you queasy, have your kids do it – they have no problem with producing videos.
This could also be the chance for home auctions to take hold. After a few days go by and/or the video reaches 100+ views, then conduct an online auction to determine the winner. Then have that buyer view the home in person, keeping traffic to a minimum.
Or have buyers submit written offers after seeing the video tour, and if the seller permits, have only those contenders view the home in person. Investment properties are regularly sold this way to minimize the impact on the existing tenants – you’ve heard the phrase, “Show with offer”.
Either way would reduce human interaction and possibly make home-selling MORE effective.
Buyers don’t necessarily need to see the home in person, either.
My buyers purchased this home and closed escrow without ever stepping foot inside. We also did a video of the home inspection, and between the two, the buyers got a full experience of what they were buying – and never saw the house in person until they owned it:
Either we can adopt new and improved ways to serve our clients and keep everyone moving, or we can sit at home watching the paranoia grow on TV. It’s your choice!
From the doctor in charge of infectious diseases at Rady Children’s hospital:
With our tight inventory and ultra-low mortgage rates, it kinda feels like Tesla stock. One minute you’re in the $800s, and the next thing you know, the same house is in the $900s!
What can buyers do?
Don’t buy crap.
Simple enough, right?
But it’s hard to accomplish both, because the best locations have the oldest homes.
Let’s narrow it down further.
If you can afford a decent location, what else can a buyer do to ensure a smart purchase?
Buy a newer home, and/or buy a one-story home.
Newer: Homes built in the last 15 years typically have modern floor plans with a large open great room and lots of windows that allow for ample natural light. When you go to sell it someday, it will still be a desirable home without a load of upgrading or maintenance costs to you.
One-Story: Boomers aging in place guarantee that the scant supply of one-story homes will stay tight, and those that do leak onto the open market will be hotly contested.
Here’s a good example.
This sold for $850,000 two years ago, and after a complete remodel it goes on the market for $1,149,000…..and they get multiple offers. Those who thought they could still buy a nice house in Old La Costa in the $800,000s are really scratching their heads now! But it had the good location, and the sellers added the new look to clinch a nice boost in value.
If you want to stick with a newer house and/or a single-story house, what are your chances?
# Built Since 2005
# One-Story Built Since 2005
0 – $1M
$1M – $2M
$2M – $3M
Buying a newer home or a single-story really looks daunting now, but if you can pull it off, you got it made!
Insisting on a newer home and/or a one-story home will give you maximum assurance that you’ve made a smart buy that will appreciate better than the rest. We can add a few older homes that have been thoroughly remodeled, but they probably still have a floor plan cut up into smaller rooms with low ceilings.
With prices so high now, everyone knows that it’s smart to fully upgrade your house before selling – at least when possible. But not many sellers do, so buyers get as close as they can and then deal with the rest. My general rule-of-thumb still applies – expect to spend another $25,000 to $50,000 for upgrading any house you buy!
We are happy to assist our buyers with those upgrades too!
Here are photos of a newer but normal tract house that our buyer thought needed some pizzazz, so Donna coordinated the work before our buyer moved to town.
The TV was on a large, barren wall, and adding an electric fireplace gave it a traditional feel. But instead of installing it flush, let’s build it out to add some dimension:
This electric appliance kicks out steady heat and has 50+ color combinations!
The kitchen had an off-white antique finish to the cabinets, which looks dirty after a few years. Let’s paint those light gray, change the cabinet pulls, add some modern stools, class up those pendant lights, and install a built-in fridge too:
The master bathroom was base grade:
Let’s ditch the basic wall mirror/medicine cabinet and combo them up instead – with lighting!
How about this new closet by Top Shelf Pull Outs for about $6,500!
Note to self – always take two photos in case someone has their eyes closed!
My friends and clients who bought a La Jolla fixer and did a phenomenal remodel are featured in the latest edition of San Diego Home & Garden Magazine. It’s not online, but I found a copy at Barnes & Noble!
Remember before the last crash when buyers and sellers were far more cavalier about their real estate decisions? Why was that? Because if they needed to move again, there were always a reasonably-priced house down the street or around the corner for sale.
But things sure have changed.
Selling/buying/moving is no longer just something you do casually. Because of the difficulty, you are probably only going to move if, and when, you decide to make a permanent lifestyle change.
Look at the differences just since this blog has been around:
NSDCC January through September:
Percentage Over $2M
Percentage Under $800,000
There Are Fewer Homes For Sale – In particular, there are fewer high-quality homes for sale that would make it worth it for existing homeowners to move up or down. In spite of having loads of equity, trying to find a home better than your current home is a major obstacle.
Home Prices Are Higher Than Ever – If you can find a house that suits your needs, the price will be higher than ever. You have to pay more, qualify for more, and be willing to eat higher recurring costs like property taxes too.
Cost of Moving is High – Gone are the days when you could throw everything you own into a U-haul and move in a day. Commissions, closing costs, packers & movers, home upgrades, and new furniture will cost you $50,000 to $100,000 or more in any house you buy around the NSDCC.
Competition is Stiff – As a result of the three items above, buyers are very picky and holding out for the highest quality. Staying on the edge of your seat 24 hours a day can take its toil!
It’s a Market For The Affluent – With only 5% of the NSDCC houses priced under $800,000, it means home buying is only for those who have real horsepower – and regular folks are priced out, unfortunately.
The stakes are high, and making any mistakes now will be very costly. The worst part is that home prices are moderating (except in Solana Beach), and without an increase in their equity position, those who need to sell shortly after purchasing could incur a substantial hit.
We are in the No-Mistake zone. Get good help!
P.S. The Solana Beach house on Rios that set the all-time non-oceanfront price record in March at $8,250,000 was relisted for $9,750,000…..and it went pending today!
I went through the NSDCC open-house list and these are my favorites based on price, location, DOM, and agent. They start in La Jolla (four on the oceanfront!) and go north up the coast as you scroll down.
Let me know if you’d like me to create a personal collection for your search!
This will probably be the last detached-home tract priced under $1,000,000 in SW Carlsbad. Solar is included on all new homes now (starting in 2020), and these are Aviara Oaks schools which goes through 8th grade, then Carlsbad or Sage Creek High Schools. Take your favorite realtor with you!
"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... more "
by Ann Romanello
"Jim educated us, helped us find the perfect house, and then negotiated us a great deal. I would hate to be sitting across the negotiating table from ... more "
"Jim is thorough and will be brutally honest about the homes he shows you. He provides great service and follows through until the very end and even ... more "
"I highly recommend Jim as a buyer’s agent. Working with Jim, we closed this week on a San Diego condo. Jim prepared a list of comparable sales to ... more "