If you have vision and can add your own kitchen and bathrooms to create your own masterpiece on a large 7,500sf lot with RV parking at the end of the culdesac, then check out our new listing!
https://www.zillow.com/homedetails/1800-Guevara-Rd-Carlsbad-CA-92008/16586965_zpid/
LP = $899,000
SP = $1,050,000
This is literally the least-expensive house in Carlsbad today!
if you have vision and can add your own kitchen and bathrooms to create your own masterpiece on a large 7,500sf lot with RV parking at the end of the culdesac, then check out our new listing!
https://www.zillow.com/homedetails/1800-Guevara-Rd-Carlsbad-CA-92008/16586965_zpid/
Open 12-4pm Friday and 12-3pm on Saturday!
It happened again yesterday. I got the Dear John letter from a listing agent.
This one was somewhat unusual though. I always ask a listing agent how they will handle multiple offers, and 100% of the time it’s some version of spreading them out on the coffee table and picking the winner.
But when I asked this agent, she flipped it back on me and asked, “Well, how do you handle them?”
I responded, “I call back every agent and tell them the price to beat, and mention that they are going to lose if they don’t beat it.” It gives every buyer a fair chance to determine their own fate.
The listing agent responded, “Oh that’s how I do it too!”
What? I’ve never heard that before. Thankfully, my buyers liked the home enough to pursue it, and we submitted an offer that was $22,000 over the list price, with the normal concessions. It’s an offer that should be considered as a contender.
You can guess what happened. The usual five days go by, and yesterday I got an email from the listing agent who said that because she received offers that were higher, they selected a better deal.
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Someone asked the question, “Does the realtors’ blundering incompetence with handling multiple offers actually feed the frenzy? Do their Dear John letters ramp up the intensity?
I thought about that one for a while.
I am a competitor at heart. I was lucky to be on some great sports teams when I was a kid, and learned the difference the hard way. Some teams have great players but don’t win. Other teams have a few talented players but are winners because they are scrappy and determined.
Think of the Padres. Even though they have finally had some great players, they aren’t very close to winning anything yet. During the last half of the season, they mailed it in, and lost a lot of games to inferior teams.
If we lost a game because of a bad call by the umpire, or an honest mistake by a player, we would be frustrated but could shrug it off.
But if we lost a game that was very competitive and everyone played their heart out, it would motivate us the most to learn from it, and never let it happen again. It’s the killer instinct, and it comes from honestly played, head-to-head battles.
I think homebuyers today who get burned repeatedly by agents who don’t give them a chance to compete fairly with the other bidders are being dumbed down. They get numb to losing, and while it might cause them to offer a little more next time, their building resentment keeps them from throwing everything in.
Open bidding gives homebuyers the opportunity to go higher than they ever thought they would.
That’s top dollar, and that’s what I do.
The reason for breaking down the active and pending listings by zip code is to give the readers a closer look at their neighborhood stats.
Given how inventory has been dropping significantly, it is impressive how many pendings there are:
We had 400+ pendings from June 22nd to November 30th last year – with a peak of 491 pendings on September 7, 2020.
We can also track the average market times too. Any upward trends here would indicate market slowing:
Buyers are pickier than ever, so no surprise that some dogs aren’t selling.
For more than a decade, Razor House, the stunning cliffside mansion by architectural designer Wallace E. Cunningham in La Jolla, California, has alternately been described as a “magnum opus,” an “architectural masterpiece,” and “America’s coolest home.” But since purchasing the modernist gem in 2019, Grammy Award–winning singer Alicia Keys and her husband, renowned music producer Kasseem Dean (a.k.a. Swizz Beatz), have preferred to call the home where they and their two sons, Egypt and Genesis, now reside “Dreamland.” Explaining the name, Keys says the expansive, nearly 11,000-square-foot residence, which overlooks the Pacific Ocean and is rumored to be the inspiration for Tony Stark’s futuristic bachelor pad in the Iron Man movies, is “a place to create dreams and to be bold enough to dream your wildest dream—for us to even be here is a wildest dream.”
This new song was filmed there:
Mike pointed out that Zillow simply kept paying too much for homes, and instead of adjusting on purchase prices being offered, they shut it down yesterday.
But Zillow is too big and too aggressive to rest.
Here’s what Mike thinks could be next:
While Zillow 2.0 may have been a failed experiment in iBuying, what captures the imagination is the next iteration of the business. How will Zillow leverage its massive competitive advantage and its iBuyer learnings for Zillow 3.0?
I wouldn’t be surprised to see Zillow play deeper in the Power Buyer space, a model that is asset-light, easier to scale, less risky with better unit economics, and has a natural overlap with Zillow Home Loans (Opendoor diversified into Power Buying earlier this year).
Zillow as a Power Buyer — either through organic development, partnership, or acquisition — is a natural extension to its existing business of helping home buyers. The world of real estate has evolved significantly since 2018, and Zillow needs to stay relevant to those evolving consumer needs.
It would be a smart move. The buyer side is where the help is needed.
Assisting buyers with making all-cash offers is a very attractive service, with no real downside because all they have to do is funnel the business into their mortgage company to refinance the purchases after the fact. They could flip these buyers to their Premier Agents too – a group who is wondering if it’s worth it to be a Zillow customer today.
The supply and demand will be out of balance for years to come, and buyers are the ones that really need the help. Go Zillow!
If you can’t make a profit flipping houses in this market, well then yeah, you should probably stop (hat tip G.A.!)
Real-estate firm Zillow Group is exiting the home-flipping business, saying on Tuesday that its algorithmic model to buy and sell homes rapidly doesn’t work as planned.
The firm’s termination of its tech-enabled home-flipping business, known as “iBuying,” follows Zillow’s Oct. 18 announcement that it was halting all new home purchases for the rest of the year. At the time, Zillow pointed to labor and supply shortages for its inability to renovate and flip houses fast enough.
But Chief Executive Rich Barton said Tuesday that Zillow had failed to accurately predict the pace of home-price appreciation, marking an end to a venture the company once said could generate $20 billion a year.
“We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility,” Mr. Barton said in a statement.
Zillow’s share price was down about 12% in late trading on Tuesday, but before it announced the decision to end home flipping.
The move represents a big hit to Zillow’s top line. Home-flipping was the company’s largest source of revenue, but it has never turned a profit.
Zillow, which will release earnings later on Tuesday, said it would report that its home-flipping business, Zillow Offers, lost $381 million last quarter, resulting in a combined loss of $169 million across all of Zillow. The company said it also plans to cut 25% of its workforce.
Zillow has an inventory of more than 9,800 homes across the U.S. that it is currently shopping to investors. There are another 8,200 homes in contract it has agreed to buy. The company expects to lose somewhere between 5% and 7% on these homes, the company said.
Starting in the summer, competitors such as OpenDoor and Offerpad began to pull back from home purchases in one of the biggest home-flipping markets, Phoenix, as the red-hot pandemic market began to cool.
But Zillow accelerated, according to an analysis of sales records by real estate tech researcher Mike DelPrete, scholar-in-residence at the University of Colorado Boulder. Zillow also paid significantly more than those competitors for each home it purchased, buying homes priced $65,000 above the median on average, according to Mr. DelPrete’s analysis.
By October, the company had listed 250 Phoenix homes at an average price discount of 6.2% below what it had paid for them. Mr. DelPrete called Zillow’s price blunder “a catastrophic failure.”
A wider look at Zillow’s national performance by analysts at KeyBanc Capital Markets found it had listed 66% of homes at prices below what it had paid for them, with an average discount of 4.5%.
Zillow said it expects that the wind-down of its home-flipping outfit will take several quarters.
Let’s gather the forecasts for 2022 – here’s a start:
| Forecaster | ||
| Fannie Mae – USA | ||
| Freddie Mac – USA | ||
| MBA – USA | ||
| NAHB – USA | ||
| NAR – USA | ||
| CAR – Calif | ||
| Zillow – SD | ||
| CoreLogic – SD | ||
| JtR – NSDCC |
I had guessed that the NSDCC sales would be +10% this year, and +10% in pricing.
The final 2021 numbers should end up around +7% for sales and +28% in median sales price.
Bill mentioned (below) that if inventory stays low, there will be a larger increase in prices. Conversely, if inventory increases significantly, there will be less price appreciation.
I’m guessing the NSDCC market will enjoy a third option, where the inventory increases just enough to boost the sales AND pricing at the same time.
It is a sweet spot where more inventory doesn’t scare off buyers, and instead soaks up the pent-up demand and provides the comps for a solid 1% to 2% pricing increase per month.
My final guess for 2022: NSDCC will have +5% YoY in sales, and +15% in median sales price.
What do you think? Leave your guess in the comments section!
Click here for the research:
It’s too bad they would rather give discounts to insiders, instead of just lowering the price on the individual listings and let the retail buyers benefit.
Zillow Group Inc. is looking to sell about 7,000 homes as it seeks to recover from a fumble in its high-tech home-flipping business.
The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors, according to people familiar with the matter. Zillow will likely sell the properties to a multitude of buyers rather than packaging them in a single transaction, said the people, who asked not to be named because the matter is private.
A representative for Zillow didn’t immediately comment.
The move to offload homes comes as Zillow seeks to recover from an operational stumble that saw it buy too many houses, with many now being listed for less than it paid. The company typically offers smaller numbers of homes to single-family landlords, but the current sales effort is much larger than normal.
If successful, the sale would make a dramatic dent in Zillow’s inventory. The company acquired roughly 8,000 homes in the third quarter, according to an estimate by real estate tech strategist Mike DelPrete.
Zillow shares dropped 8.6% to $96.61 on Monday. The stock had slipped 22% this year through Friday after nearly tripling in 2020. The company is scheduled to report earnings on Tuesday.
Zillow recently said it would stop making new offers in its home-flipping operation for the remainder of the year, though it continues to close on properties that were already under contract. The decision came after the company tweaked the algorithms that power the business to make higher offers, leaving it with a bevy of winning bids just as home-price appreciation cooled off a bit.
An analysis of 650 homes owned by Zillow showed that two-thirds were priced for less than the company bought them for, according to an Oct. 31 note from KeyBanc Capital Markets.
“I think they leaned into home-price appreciation at exactly the wrong moment,” said Ed Yruma, an analyst at KeyBanc.
Zillow put a record number of homes on the market in September, listing properties at the lowest markups since November 2018, according to research from YipitData. It also cut prices on nearly half of its U.S. listings in the third quarter, according to Yipit, signaling that its inventory was commanding prices lower than it expected.
