I don’t mind a home inspector bringing up every detail – what matters most is how they present them. We call it ‘bedside manner’; like the doctors who are able to tactfully tell their patients the truth in a way that they gently understand and accept.
After this sale fell out of escrow, the key positive was that we had 100% clear mold remediation, unlike every other house for sale (because buyers rarely test for mold). Yet when today’s very soft and afraid buyers hear the m-word, they run for the hills, instead of sensing an opportunity. We closed the second escrow at $50,000 under list, instead of $300,000 over.
Our one-story listing in Aviara closed escrow today.
We had listed for an attractive $1,800,000 in mid-September, and had about 2,600 views on Zillow in the first five days (see above). We received three offers, and accepted the highest at $2,100,000 cash.
Previously I told the story of how the home inspector’s lack of bedside manner put the buyer on edge. Their mold inspection didn’t detect anything in the air, but a swab behind a toilet did cause a positive result. We offered mold remediation and re-test to ensure the problem was corrected – the standard solution – but the buyer said she couldn’t handle the stress and cancelled escrow instead.
You never get the same buyer enthusiasm the second time around, so I knew going back on the open market in mid-October was going to be a challenge – especially now that my seller was getting used to the idea of a $2,100,000 sales price.
We completed the mold remediation so at least the problem was solved. But I didn’t make any mention of it in the MLS or in other advertising because I wanted to control the message. We went back on the market on Friday, October 14th, and I did the open house extravaganza on the 15th and 16th where I planned to discuss the mold remediation in person with the interested parties.
We only had about 1,580 views in the first five days – which is 40% lower than the original effort:
I had already contacted the previous bidders from the first round, and the second-place finisher who had offered $2,000,000 cash was still interested. They weren’t willing to put another offer on the table until after the open houses were done, and when they did, it was a disappointing $1,650,000.
No one else made an offer.
We went back and forth, but the best they were willing to do was $1,750,000.
By then, it was Tuesday night and the first game of the Padres vs. Phillies playoffs. Without any hope of another offer to rival the deal on the table, the next day the seller decided to take it, and stay on track to purchase the replacement home that we had in escrow, contingent upon this one selling.
Did the value drop $350,000 in a month?
You could say that, but it the double whammy of falling out of escrow/mold remediation didn’t help. The original $2,100,000 offer was too optimistic to stick, and given that the eventual buyer had dropped from $2.0 to $1.75, their original offer probably wouldn’t have closed either.
An offer of $1,800,000 would have made it to the finish line, and maybe as high as $1,900,000. Having the general negativity increasing about real estate market every day was bad enough, and then include the wicked combo of second try/mold/Padres playoff fever. I’m glad we got as much as we did.
Did you know that a garden gnome is a sign that the homeowners are swingers?
They do say no one knows what goes on behind closed doors – but is your neighbor giving out secret clues that they’re a swinger?
Yesterday we told how sales of garden pampas grass have plummeted because it’s believed to be a secret signal that swingers live in the home it belongs to. But it turns out that the exotic plant isn’t the only giveaway that the house’s residents are into liberal sexual practices.
They also cite white landscaping rocks and pink or purple decorations in the front garden as a signal of swinger activity. Bizarrely, the website identifies pineapples as another swinger signal – in the form of a door knocker. They may look sweet and innocent, but it turns out garden gnomes are a likely indicator that the resident is into swinging too.
This home listed for $3,595,000 but didn’t have any takers over the first five weeks. They ‘refreshed’ the listing (let it expire and then relisted as a new listing), with a lower price of $3,445,000 – a discount of 4%.
They found the buyer a week later who paid $3,400,000 cash. I’m not sure if it was the lower list price that caused it, or the refresh?
Of course the current conditions look worse when comparing to the hottest real estate market ever. Having bidding wars on 21% of homes for sale sounds great to me.
The discouraging part about Bill’s post today is how the realtors have bought into the negativity.
This is the first downturn to be affected by amateurs on social media, and realtors can either price ’em high and repeat these same negative talking points seen everywhere now, or they can get better at their craft, price their listings attractively, and be part of the solution:
#Houston, TX: “Home prices have most first-time home buyers priced out of home ownership. It’s even worse with the higher interest rates decreasing what the buyers can qualify for.”
#Denver, CO: “Cost of living [and] interest rate [increases] are keeping most buyers from buying.”
#Baltimore, MD: “The market is transitioning. Inventory is still low and the number of buyers looking is less due to rising interest rates. Buyers are qualifying for less, so they are pulling back. [I am] seeing less as-is sales, more home inspections, and negotiations overall.”
#Sarasota, FL: “I’ve had numerous buyers looking but the prices are much higher than they want to spend. Many pulled back waiting for the market to go down.”
#LosAngeles, CA: “Skyrocketing interest rates are pushing buyers out of the market (they can no longer afford homes that were in their price range just a few months ago) and making homes more difficult to sell for sellers and their agents.”
#Phoenix, AZ: “Buyers are very nervous about making a decision.”
#NewYork: “Open house attendance is weaker than usual, and sales take longer.”
#Minnesota, MN: “Still seeing a fair number of cash sales as competition to financed sales.”
#StLouis, MO: “Things are slowing down slightly, but I have found that the good properties are still moving quickly with multiple offers and going above ask.”
#Barre, VT: “Our local market in Lamoille County is very flat and challenging. Local working families are outpriced by the prices and interest rates. The neighboring resort town has slowed but there are still cash buyers for the million plus market.”
#OrangeCounty, CA: “Interest rates have put the brakes on the market.”
I did sign up to be on their realtor-comments list!
Buyers have become more reluctant about executing the terms of the contract – and the NBPs are back!
Here is the explanation on how they work:
Q. My buyer was sent an NBP on Wednesday. My question is does the NBP expire 48 hours from delivery/reception, or at 11:59:59 Thursday night?
A. The Notice to Buyer to Perform (“NBP”) provides for a two-day notice to performance (it is not calculated as forty-eight hours – there is a difference). For example, if the NBP was issued on Wednesday, day one is Thursday, and the deadline for performance would be Friday at 11:59pm. The seller may issue a Cancellation of Contract (“CC”) at 12:01am Saturday.
Conversely, if the NBP was issued Thursday, then day one is Friday and day two would end at 11:59pm on Saturday BUT the last day for performance cannot land on a weekend or holiday. In this example, the buyer would have until 11:59pm on Monday (assuming Monday does not land on a legal holiday) to perform (except under the the San Francisco Purchase Agreement).
Remember the NBP can be issued no earlier than two days prior to the Scheduled Performance Day in order for the NBP to be served in accordance with the purchase agreement. If the NBP is served improperly it would have to be sent again thereby extending the timeline for performance.
In California, about 70% of the outstanding mortgages have a mortgage rate below 4%, which means it’s unlikely that many of those homeowners will move if they have to qualify for and accept a much-higher rate. Plus, about 30% of local homeowners don’t have a mortgage.
Who is left? Anyone?
Home Buyers Who Will Keep Looking:
Out-of-towners
First timers
1031 exchangers
Parents buying with/for kids.
But with an all-time low inventory of homes for sale expected in 2023, we won’t need the same demand as we’ve had in the past. Let’s look at the annual sales counts.
San Diego County Annual Sales of Detached-Homes
2018: 22,740
2019: 23,124
2020: 23,829
2021: 24,611
2022: 16,086 through three quarters.
The impact from higher rates kicked in during the second half of this year. Up until then, the frenzy carried buyers to the finish line even though they were getting rates in the 4s and 5s. Once rates went over 6% in June, the sales started declining, and it looks like there will be approximately 7,500 sales in second half of 2022. Add to the 10,469 sales from the first half, and the total annual sales will be around 17,969 this year.
Higher rates will probably persist, and the annual sales next year will likely be under 17,000 in San Diego County – an area of 3.3 million people.
The number of listings in 2022 is running about 11% lower than last year, and if there is another 11% decline next year (likely), it will leave us with roughly 22,654 homes for sale in 2023. If only 60% of those actually sell, then sales would be 13,592 for the county, which will be roughly 24% fewer than in 2022, and 45% fewer than in 2021.
The only thing that could change the outcome is if we have the Big Capitulation, where both sellers and buyers give enough to make more sales happen.
Next year, everyone will be talking about how mortgage rates in the 7s or 8s will be causing a lack of affordability, but I have bad news for those who still want to buy.
There probably won’t be many homes for sale.
It will only take one or two headlines about the real estate market being crushed by high rates to cause potential sellers to pack it in until “the market gets better”.
Look how few sellers came to market last month:
NSDCC Detached-Home Listings, October
Year
Number of Listings
Median List Price
2018
401
$1,555,000
2019
371
$1,695,000
2020
400
$1,849,350
2021
228
$2,160,000
2022
174
$2,362,500
Before last year, the lowest October-listings count over the last twenty years was 312 in 2012, and back in the golden years of real estate, there were 452 October listings in 2001, and 510 in 2002!
510 vs. 174?
Yikes!
Hopefully, those who do list their homes for sale next year will be highly motivated, and, lucky for them, having so few competitors will cause their list prices to stay elevated.
Don’t be surprised if the 2023 spring selling season ends up being the Greatest Standoff Ever!
I’ve been hoping for 100+ sales per month the rest of the way this year.
Currently, the October count is 108, so it should get up to around 120 sales by mid-November. Here are the monthly sales and pricing for 2022:
NSDCC Detached-Home Monthly Sales & Pricing, 2022
Jan
140
$2,828,988
$2,855,213
$2,234,944
$2,240,000
Feb
158
$3,063,331
$3,108,907
$2,149,500
$2,386,500
Mar
207
$3,247,251
$3,337,348
$2,400,000
$2,625,000
Apr
227
$3,190,161
$3,251,604
$2,350,000
$2,550,000
May
214
$2,941,080
$3,030,794
$2,350,000
$2,480,000
Jun
188
$2,871,956
$2,881,314
$2,297,500
$2,350,000
Jul
152
$2,892,729
$2,833,588
$2,272,000
$2,280,000
Aug
161
$2,953,967
$2,849,332
$2,200,000
$2,150,000
Sep
134
$2,652,892
$2,560,764
$2,134,500
$2,020,000
Oct
108
$3,168,167
$3,042,502
$2,250,000
$2,150,000
I noted last week that the September average and median sales prices were both 23% lower than they were in March. It looks like the final October data could end up being higher.
The average and median sales prices are easily affected by the types of homes that are selling. The recent environment has had smaller, less-expensive homes selling, while the higher-end market has been languishing.
Let’s include more statistics to fill out the picture:
Month
Sales
Average SP
Avg $$/sf
Avg SF
Median SP
Med $$/sf
Med SF
Mar
207
$3,337,349
$1,028/sf
3,498sf
$2,625,000
$853/sf
2,800sf
Sep
134
$2,560,764
$911/sf
2,887sf
$2,020,000
$790/sf
2,598sf
Oct
108
$3,042,503
$931/sf
3,387sf
$2,150,000
$782/sf
2,840sf
While the October average and median sales prices make it look like we’ve turned the corner, once you analyze the house sizes and $$/sf, you’ll see that buyers are still getting more for their money today.
Unfortunately, none of the talking heads in the media will look any further than the median sales price.
Once their house-hunting vacation concludes in February, all potential home buyers will do is decide if the change in the median sales price supports their mindset about purchasing.
Trustindex verifies that the original source of the review is Google.
We sold a home with Jim and Donna and from beginning to end they were consummate professionals. Their initial walk through the property resulted in a list of items to be repaired or updated. They supplied a list of vendors and job quotes to do the repairs and updates. We originally wanted to sell ‘as is’ and just get it over with. They gave us a selling price for ‘as is’ and options for doing a few updates/repairs to doing it all with the selling price for each option. We agreed to do all they suggested and we sold for the exact price they predicted. For every dollar spent we got back more than $2 back in the selling price. And they got that price in a rising interest rate environment! Donna and Jim are extremely detailed and guide you through ever aspect of the sale. There were no surprises thanks to their guidance. We couldn’t be more pleased with their representation.
Thank you Donna and Jim,
Jerry and Mary
Heather Quejada
March 27, 2025
Trustindex verifies that the original source of the review is Google.
We have known Jim & Donna Klinge for over a dozen years, having met them in Carlsbad where our children went to the same school. As long time North County residents, it was a no- brainer for us to have the Klinges be our eyes and ears for San Diego real estate in general and North County in particular. As my military career caused our family to move all over the country and overseas to Asia, Europe and the Pacific, we trusted Jim and Donna to help keep our house in Carlsbad rented with reliable and respectful tenants for over 10 years.
Naturally, when the time came to sell our beloved Carlsbad home to pursue a rural lifestyle in retirement out of California, we could think of no better team to represent us than Jim and Donna. They immediately went to work to update our house built in 2004 to current-day standards and trends — in 2 short months they transformed it into a literal modern-day masterpiece. We trusted their judgement implicitly and followed 100% of their recommended changes. When our house finally came on the market, there was a blizzard of serious interest, we had multiple offers by the third day and it sold in just 5 days after a frenzied bidding war for 20% above our asking price! The investment we made in upgrades recommended by Jim and Donna yielded a 4-fold return, in the process setting a new high water mark for a house sold in our community.
In our view, there are no better real estate professionals in all of San Diego than Jim and Donna Klinge. Buying or selling, you must run and beg Jim and Donna Klinge to represent you! Our family will never forget Jim, Donna, and their whole team at Compass — we are forever grateful to them.
Lou F
March 27, 2025
Trustindex verifies that the original source of the review is Google.
WeI had the pleasure of working with Klinge Realty Group to sell our home in Carmel Valley, and I cannot recommend them highly enough!
Jim and Donna demonstrated exceptional professionalism, offering expert guidance on market conditions and pricing strategy, which resulted in a quick and successful sale.
Communication was prompt and we were well-informed throughout the entire process.
For anyone looking for a dedicated and knowledgeable real estate team, look no further!
---
William Sams
March 25, 2025
Trustindex verifies that the original source of the review is Google.
Donna and Jim Klinge of Klinge Realty Group have our highest possible recommendation. From Donna and Jim’s first visit to our house through closing their advice and counsel was candid and honest in all dealings. They kept us fully informed throughout the process. The house sold less than three days after listing with a two-week closing. My wife and I have sold several houses during our lives. This was by far the best experience. Klinge Reality is a premium service realtor. You can’t make a better choice for someone to sell your home fast and for top dollar.
Emily Hernandez
December 29, 2024
Trustindex verifies that the original source of the review is Google.
Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.
Jesus Adrian Sahagun
November 11, 2024
Trustindex verifies that the original source of the review is Google.
This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.
SABIHA PASHA
July 23, 2024
Trustindex verifies that the original source of the review is Google.
Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless.
So grateful that I had them on my side!
Anu Koberg
July 13, 2024
Trustindex verifies that the original source of the review is Google.
We first found Jim through his blog at bubbleinfo.com, which really showcased his knowledge of SoCal real estate. Since then we've done three transactions with Jim and Donna, and they are an incredible full service agency, with Jim's deep market insight and Donna's deft contract and project management. We trust them implicitly in their analysis and strategy, which is based on years of experience. They're always available and on top of things, and we strongly recommend them to anyone.
Bjorn Isachsen
July 10, 2024
Trustindex verifies that the original source of the review is Google.
The Good
The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market.
The Great
Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them.
The Outstanding
We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time.
The Truly Exceptional
Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs.
The Recommendation
For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's bubbleinfo.com blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...
Chris Shea
June 21, 2024
Trustindex verifies that the original source of the review is Google.
We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready.
Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free.
Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.
