The rapidly-increasing home prices are exacerbating the problem too – especially for existing homeowners who had hoped to move up. If you paid $500,000 for your house and now it’s worth $1,000,000, you need to spend $1,500,000 on the upgrade just to make it worth it. But the gap isn’t between $1.0 and $1.5, it’s the whopping million dollars between the previously-comfortable $500,000 and the new price of $1,500,000. Even if you are over 55 and can take your old property taxes with you, the new mortgage amount will be double the previous amount AND last for another 30 years. It’s why more and more of the current homeowners are staying put, which is limiting the inventory now, and in the future.
It’s why I said on the TV show that the current market insanity is likely to continue.
With a finite number of homes and 1,700 new millionaires being created every day in America (we are now up to 18,000,000 millionaires!), the affluent have commandeered the local market. Apparently, they don’t mind paying these prices, and will throw in another $100,000 or so to win the home, if needed.
We hear regular calls for government to ease up on zoning requirements, but more action is needed because we are out of land. Bill Davidson, the most prolific home builder in the history of San Diego County, talked about the shortage back in 2012:
On the TV show, I suggested redeveloping the MCAS Miramar or getting the City of Carlsbad to free up some of the dedicated open space to create larger opportunities for builders, because we need thousands of more homes, not dozens, to balance the market and slow down the pricing.
But those ideas have no chance of happening.
It would take a monumental shift in priorities for our society to consider those. If the government were to propose redevelopment on a grand scale, it would take dozens of years to come to fruition. The Kearny Mesa project is a good example, but it will only add 26,000 homes over the next 30 years which probably won’t be enough to slow down pricing – and no single-family residences are planned there.
Any other new projects will face intense opposition.
The NAVWAR site off the I-5 freeway would seem like an ideal redevelopment project, and it could provide housing right where it’s needed. But the opposition is fierce – consider this attorney’s opinion:
Unless we have a game-changing shift in our community’s mindset about redeveloping the infill sites, the hordes of affluent people will dominate the home-buying – and keep pricing at these levels or higher.
Oh but wait Jim, how about those boomers – half of which haven’t retired yet? Will the boomers who are still working be more likely to need the dough, AND be young enough to endure a move out-of-state?
Maybe, but their kids and grandkids will be lined up to inherit the house, and with that being the only feasible way for them to stay in San Diego, the boomers will find a way to age-in-place instead.
The market is looking fairly steady above, with no dramatic movements over the last couple of weeks.
The variant should shut down the enthusiasm some day soon, which will probably cause the market to come back more swiftly once it clears. Maybe we’ll have a fourth quarter surge if buyers want to get a jump on the spring selling season?
Are you thinking of buying a house under $1,000,000 between La Jolla and Carlsbad, which is an area of 300,000+ people? Today, you have two to choose from!
I saw this happen three times this week, and it’s probably a sign of the times.
A listing goes pending for a day or two, then comes back on the market at a higher price.
They are most likely the bidding wars that failed. The seller/listing agent took what they thought was the best offer, but then the winners had second thoughts and/or buyers’ remorse set in – and they cancelled.
Because one buyer was willing to pay over list price in the heated moment of engagement, the seller/listing agent decides their offer price must be the market value and others should pay that much too, and they RAISE the list price when re-entering the market.
But nobody was willing to pay that price.
Most importantly, nobody was willing to pay that price when the urgency was at its peak during the first few days on the market. The buyer enthusiasm is much lower the second time around.
There was one listing-agent story about receiving five offers, and taking the all-cash offer that was $25,000 over list with a 7-day escrow. Then the buyers checked their calendar and found they couldn’t visit the property in-person during the seven days (they had seen it via FaceTime). So instead of working out an alternative, they just cancelled instead (they may not have liked that the sellers paid 23% less in February).
The listing agent went back to the four losers, but couldn’t get any of them to re-engage.
Part of the problem is how the listing agents treat the losers.
I was involved with one of the three. We looked at the home about halfway through the open house, and there was no names on the sign-in sheet. I talked up the listing agent, but there was no sign of any interest in the property.
The next day we submitted a cash offer with 14-day escrow that was 3% under the list price. The LA said:
Received! Thank you. I will respond more once I’ve had time to review with sellers.
So there was still no indication that there is any other activity on the property.
A day and a half later, she sends this over:
So you know, we chose to only counter the top offers. We just accepted another offer less than 30 minutes ago, after getting the counters signed. We appreciate you taking the time to put in the cash offer, but for your own knowledge, it was so much lower than the other offers, the sellers didn’t even consider it.
Two days later, it comes back on the market with a $25,000 price hike.
Did she call me to re-engage? No. Did I call her? No – we had already bought something else.
I made bumping the price in the second round look easy here, but that was peak frenzy. Today’s environment has cooled off, and and many, if not most, escrows are going to be somewhat shaky and nervous. If they do fall apart, the reeling-in of another buyer is a skill that agents with 12 years experience or less have never had to develop (in both examples above, the homes are still for sale).
This is a partial clip of my appearance on the Derrick Evens show today. His full 14-minute version will be here on Monday – without the pregame banter. Hopefully his camera angle is more forgiving:
It is a very rare occurrence where a buyer wants to cancel the sale after releasing all contingencies because they know they could potentially lose their deposit. Would they give up a five-figure or six-figure deposit easily, or fight it out with the seller? If they fight, then the property gets hung up in litigation and can’t be sold, and most sellers want to get on with the sale. Because in almost every case, the buyer will get his deposit back one way or another, should we just quit collecting them as part of the sale?
According to CAR – we don’t need a deposit to have a binding contract:
Q: Must a buyer give a good faith deposit in a purchase agreement for there to be “consideration” to make it a binding contract?
A: No. The buyer’s good faith deposit in a real estate purchase agreement has no legal significance. It is not required as consideration for the contract because the purchase agreement is a bilateral contract and the mutual promises of the parties serve as adequate consideration to make the contract binding and enforceable on both parties. (Bleecher v. Conte, 29 Cal. 3d 345, 350 (1981).)
Under the C.A.R. purchase agreements, if a contract is entered into and the buyer fails to make the good faith deposit as agreed to, the seller cannot simply cancel. Instead, the seller must go through the procedure of issuing a Notice to Buyer to Perform and giving the buyer adequate time to perform, and only then can the seller issue a cancellation.
Home sellers have a sneaky suspicion that they should hire a great agent, but they don’t want to pay 6%. These ads combine these two pain points beautifully, and offer to pair you with a Top 1% agent for only 2%!
Their fine print seems to back it up too:
*Our agents will list for 2% and offer the typical Buyer’s Agent commission in your market ranging from 2% to 3%. The average Buyer’s Agent commission nationwide is 2.5%. If a buyer calls on your house directly without an agent, our agents have agreed to do the entire transaction for only 2% total. Homes under $150,000 will have a minimum list side commission of $3,000.
Let’s get to the real truth. Several points:
They say their service is FREE. But they are running national TV ads? Who pays for those? The realtors pay for those! They have to give a split of their commission to the advertising company. Do you think the Top 1% of realtors are jumping at the chance to work for 2% and then give up 20% to 30% of that to the lead source? No way. They have enough other retail business that they don’t have to discount their commission.
The commission is ‘pre-negotiated’, but that only means that the realtors have to offer 2% as one of the commission options. Because the listing agent will also have a 6% commission option, they get paid LESS with the 2% plan. Because the best agent-teams have buyer-agents who get a spiff too, the 2% option will only rarely get implemented – there’s not enough $$ to go around. The home’s listing goes onto the MLS/open market, which means the chance of an outside agent selling the home is at least 90%, and because of the dis-incentive, it’s probably more like 98% chance of not being a 2% commission plan.
The listing agent may normally offer a 5% commission plan. But because he has to pay the 20% to 30% to the lead source, it will get passed on to the seller in the form of a 6% commission.
Because of the seller’s zest to only pay the 2%, they will sign up after a spectacular listing presentation that doesn’t reveal the truth about the chances of the 2% commission being so unlikely.
The sale will go smoothly, and the sellers will be on their merry way. If they happen to glance at their closing statement, they might notice that they paid 6% in the end, but hey, it’s over and they shrug it off.
There is one revelation of truth at the bottom of their website:
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!
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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
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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
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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.
