I had a dream. After a brutal 18 months of no concerts, all of the oldtimers hit the road again. Their intent was to re-focus the messages of the 1960s and 1970s, and try to bring us all together again.
The Doobie Brothers will be here on October 8th!
P.S. I had that belt buckle in high school!
Here is my video tour of the oldest home in Carlsbad. The owners prefer if the buyer preserves the house, and it is only right – it is the only thing like it in town.
Hopefully the large 1.27-acre lot will enable the new owners to develop the remaining land to fulfill their investment, or just create the ultimate family compound!
Special thanks to Compass listing agent Gina Vreeberg for allowing me to publish this video tour of the oldest house in Carlsbad! @ginavreesellsre
https://www.compass.com/listing/3140-highland-drive-carlsbad-ca-92008/748996408467865465/
Prop 19 was sold by the California Association of Realtors as a solution to the low-inventory environment. The intent was to free up seniors over 55 to move anywhere within the state of California, and take their old property-tax basis with them.
The C.A.R. said it was all we needed to create more inventory!
While we don’t have any direct results yet, but with inventory about 10% behind last year’s covid-impacted count, and 21% behind the 2019 count of total listings between Jan 1 and July 30th, it’s safe to say that Prop 19 hasn’t had achieved its goal yet.
Or maybe I just need to do more!
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Do seniors just need more information on transferring their current property-tax basis?
If so, here’s your taxpayer advocate:
As Rob Dawg duly noted, seniors may need to stay in California so they can take their low property-tax basis with them to make it worth moving.
Julian is close by, and you can get this 2,808sf one-story for $825,000:
https://www.zillow.com/homedetails/5009-Pine-Ridge-Ave-Julian-CA-92036/16757715_zpid/
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How about Idyllwild? It’s only a two-hour drive and you can buy a 2,713sf single-story for $579,000:
https://www.zillow.com/homedetails/53680-Toll-Gate-Rd-Idyllwild-CA-92549/18047261_zpid/
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How about Placerville? The elevation is only 1,867 ft. and population is around 12,000.
You can buy this 2,094sf single level for $650,000:
https://www.zillow.com/homedetails/1635-Pheasant-Run-Dr-Placerville-CA-95667/18591209_zpid/
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Ok, ok, you want to stay coastal. How about Cambria? Pick up this 1,875sf one-story for $875,000:
https://www.zillow.com/homedetails/3144-Wood-Dr-Cambria-CA-93428/15410632_zpid/
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We hope to build a referral network with agents in every town, and in the meantime, Donna is excellent at vetting realtors for you. Let us know where you want to move, and we’ll set you up with a top agent!
It’s one thing to note that showings are well under the peak frenzy era of August-November. But today’s showings are also well below what they were in July 2019, which was a fairly flat market then.
Is the demand falling apart?
Or is it due to lower inventory?
Let’s compare the inventory counts for middle of August.
NSDCC Number of Homes For Sale
| Price Range | |||
| $0-$1.0M | |||
| $1.0M-$1.5M | |||
| $1.5M-$2.0M | |||
| $2.0M-$3.0M | |||
| $3.0M+ | |||
| Totals |
*In 2019 the highest category was Over-$2,000,000 – the categories were split the next year.
The total counts are distinctly different.
In 2019, the market was sluggish, and the local Case-Shiller went flat for the last six months. There were too many homes for sale.
Last year, the increased demand was met with a much tighter supply than in 2019, but looking back we can say it was the optimal amount of homes for sale in order to create the red-hot frenzy!
Now, there aren’t enough homes for sale to keep the momentum going, and the frenzy is being starved out.
Susie filed this frenzy report on July 8th:
I think Boise might have topped out but I’m waiting for September. Summers are usually slow here. But the last one put on the market here, a couple streets over in my Movado subdivision was listed for $949,900 (about 2,500sf). We thought it was listed too high. The guy said he was moving to NC to be w/ his grandkids. Two offers: 1. $949,900 but willing to go to $965K. 2. Offer at last minute on a Sunday after an open house? Agent said the 2nd person “just had to have it. Couldn’t wait to “get out of Walnut Creek”. So I have to wait until it closes but can’t wait to talk to them. Walnut Creek is right near Orinda, where I grew up.
There is more inventory here than before, but it still seems like pendings are fast. I’d say the frenzy of multiple offers has cooled off. There may still be multiples but the craziness seems much less.
Then about three weeks ago, she sent in this modern one-story for sale:
https://www.realtor.com/realestateandhomes-detail/2922-E-Starview-Dr_Boise_ID_83712_M19130-37790
This 2015 Trout Architects designed home on the Mesa is built w/ midcentury passion + modern amenities. The single-level home features sunset & city-lights from abundant windows. Tongue & groove ceilings + post & beam construction create open central living spaces w/ generous bedrooms on either side. The front patio is accessible through separate sliders. Private side yard lies outside your 2nd living room. Street setback affords quiet living & indoor/outdoor spaces let you experience the frequent wildlife.
The initial pricing of $500/sf may have been somewhat aggressive by Boise standards, but you’d think one of those Californians with buckets full of money would have gladly paid it for a six-year old turnkey-ready one-story with designer flair.
But no takers in the first two weeks on the market, so they lowered the price by $71,000 on August 4th.
It’s still unsold.
A few thoughts:
The sellers’ motivation hasn’t mattered in the covid era. Even those lowly-motivated sellers who priced their home way too high still got swept up in the frenzy. But not any more, and it starts in the higher-end markets where the inventory is full and the action more balanced.
It looks like we’re in the mellow-down-easy phase, though occasional spurts are certainly possible.
Any new sellers who avoided the temptation to wait until next year should be motivated to move!
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The ibuyers are borrowing money like crazy to build their inventory of homes to flip. Opendoor doesn’t have the brand-name awareness of Zillow, so they are advertising a lot and buying homes directly off the MLS. Zillow has everyone’s email address so they are able to reach their users directly. Both have been fairly well-compensated during the 12-month frenzy – will it continue? From this article:
Opendoor Technologies Inc., which buys homes from consumers and lists them for resale, is in talks with lenders for a new revolving credit facility of roughly $2 billion, according to people familiar with the effort.
The company, which is rapidly accelerating the number of homes it purchases, plans to use the proceeds to help increase acquisitions, said one of the people, who asked not to be named because the matter is private.
A representative for Opendoor declined to comment.
Opendoor, led by Chief Executive Officer Eric Wu, pioneered a data-driven spin on home-flipping known as iBuying. After the company buys a home, it makes light repairs and seeks to resell it, profiting by charging sellers a 5% fee for the convenience of an easy sale.
The company acquired 8,500 homes in the second quarter, more than double the number it bought in the first three months of the year, according to an statement Wednesday. It also had roughly 8,100 additional houses under contract at the end of June.
Opendoor uses debt to fund acquisitions, and had just under $4 billion in borrowing capacity under existing revolving credit facilities as of the end of June. The company had drawn $1.8 billion on those facilities, according to a filing.
Zillow Group Inc., Opendoor’s main competitor, has also moved to increase its firepower for home purchases. The company borrowed $450 million through a first-of-its-kind bond offering earlier this month.
Zillow’s recent activity has been more consistent than Opendoor’s, so let’s look at the Zillow numbers to see if the convenience they offer sellers is paying off. Zillow currently owns 138 homes in San Diego County, and of those, 72 are active listings and 38 are pending. They have sold 48 homes this year – here are the 13 they have closed since July 1st:
| Zip Code | |||
| 92021 | |||
| 92025 | |||
| 92027 | |||
| 92054 | |||
| 92057 | |||
| 92057 | |||
| 92058 | |||
| 92069 | |||
| 92102 | |||
| 92111 | |||
| 92129 | |||
| 92130 | |||
| 92130 | |||
| Totals |
They have a consistent 2-month turnover between the day of purchase, and the day of sale, so it’s a quick $553,600 profit, or an average of $42,585 per sale – though they had to pay out close to half of that in buyer-agent commissions (all fix-ups are included in their purchase prices). It’s a good thing that sellers aren’t in a hurry – Zillow is currently six weeks behind in responding to purchase requests.
Sellers are leaving some money on the table, but as long as Zillow is flipping every home, buyers will still have the same amount of inventory to consider – it’ll just be at a higher price.
This just sold for full price ($8,986,000) cash:
Here’s a two-year moving plan for those long-timers who:
This is an adventurous experience, and good for those who are retired and want/need to travel around looking for a new home while seeing more of the world.
Step 1: Rent your house for a year.
Step 2: Go visit/live in your favorite towns. Spend a month in 12 towns, or four months in three towns, etc. This will ensure that you get a good feel for these destinations before buying a home there.
Step 3: Sell your rental house here, and buy a home in your new favorite town via a 1031 exchange.
Your CPA will recommend renting the new home for a year too, so you’ll be a vagabond for 24 months or longer. But you’ve wanted to do more traveling – here’s your chance before setting down for the duration!
To really hit the jackpot, go to an area that is cheap enough that you can buy two – one for a rental too.
Interesting to note that the buyer here didn’t mind paying $351,000 over list awhile being represented by a noted discounter from Northern California – an agent who is a known critic of the realtor cartel but is happy to make a buck off the system 500 miles away from his home.
Another example of how the market is being set (and creating the comps for future sales) by the most euphoric buyers getting little or no local expertise. If you know too much, you’ll never buy a house!
This will likely be the most paid over the list price for a home in Carmel Valley for August, but there are two others that already closed for $300,000+ over!
