Bye Bye Smokestack

Carlsbad has been put on notice – the NRG smokestack is coming down!

The big question is what will go up in its place, and it should be the next big fight among locals.  It’s probably a toss up between a mixed-use hotel development and a public park – but not a Nordstrom!

Will the removal of the ugly and dangerous-looking smokestack improve nearby home values?

There are two neighborhoods that could benefit – Spyglass/Heron Bay and Terramar:

The Spyglass/Heron Bay neighborhoods up on the hill have had the smokestack blocking their view since the beginning, and it would be a welcome relief for those homeowners to see it go.  When I was trying to sell the former model, the view of the ‘stack was the #1 complaint, and we never did sell the house.

This is what it looked like – it does spoil the sunset view, doesn’t it?

The other community affected is Terramar, which is across the street from the plant and has been there just about as long – both date back to the 1950s.

When I’ve had listings in Terramar, there were always comments at open houses about the ugly factor, and concerns that pollutants were being released that would kill people.  But because Terramar is ocean-close, there were always enough beachlovers who were willing to overlook any negativity about the plant.

Terramar has been under-priced for a few years now, primarily due to the lack of turnover and off-market sales.  The last sale on El Arbol was only $1,104,000 for 1,644sf on a 7,500sf lot, which if it were further north in the Garfield area it would have garnered at least 10% more.  The east side of El Arbol does get a direct shot of railroad, but the RR goes by Garfield too.

I think both areas could see a +10% benefit in nearby home values once the smokestack is gone, just for the happy factor – it will be a relief to see it go, and be one less thing for buyers to worry about!

C.A.R. 2020 Forecast

The C.A.R. is forecasting +0.8% in sales, and +2.5% in median sales price for 2020, which is about as safe as it gets.  Here is a comparison of how their forecasts have compared to the actual numbers recently:

Category
2018 Forecast
2018 Actual
2019 Forecast
2019 Projected
2020 Forecast
SFH Resales #
426.2M
402.8M
396.8M
390.2M
393.5M
% off forecast
-5.2%
-1.7%
SFH Median SP
$561,000
$570,000
$593,400
$593,200
$607,900
% off forecast
+1.6%
-0-
30YR rate
4.3%
4.5%
5.2%
3.9%
3.7%

From the C.A.R.

LOS ANGELES (Sept. 26) – Low mortgage interest rates will support California’s housing market in 2020 but economic uncertainty and affordability issues will mute sales growth, according to a housing and economic forecast released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

C.A.R.’s “2020 California Housing Market Forecast” sees a small uptick in existing single-family home sales of 0.8 percent next year to reach 393,500 units, up from the projected 2019 sales figure of 390,200. The 2019 figure is 3.1 percent lower compared with the pace of 402,800 homes sold in 2018.

The California median home price is forecast to increase 2.5 percent to $607,900 in 2020, following a projected 4.1 percent increase from last year to $593,200 in 2019.

“With interest rates expected to remain near three-year lows, buyers have more purchasing power than in years past, but they may be reluctant to get off the sidelines because of economic and market uncertainties,” said C.A.R. President Jared Martin. “Additionally, an affordability crunch will cut into demand in some regions such as the Bay Area, where affordability is significantly below state and national levels. These factors together will subdue sales growth next year.”

C.A.R.’s forecast projects growth in the U.S. gross domestic product of 1.6 percent in 2020, after a projected gain of 2.2 percent in 2019. With California’s 2020 nonfarm job growth rate at 1.0 percent, down from a projected 1.5 percent in 2019, the state’s unemployment rate will tick up to 4.5 percent in 2020 from 2019’s 4.3 projected figure.

The average for 30-year, fixed mortgage interest rates will dip to 3.7 percent in 2020, down from 3.9 percent in 2019 and 4.5 percent in 2018 and will remain low by historical standards.

“California’s housing market will be challenged by changing migration patterns as buyers search for more affordable housing markets, particularly by first-time buyers, who are the hardest hit, moving out of state,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “With California’s job and population growth rates tapering, the state’s affordability crisis is having a negative impact on the state economically as we lose the workers we need most such as service and construction workers, and teachers.”

In fact, according to C.A.R.’s 2019 State of the Housing Market Study, nearly a third (30 percent) of those sellers who planned on repurchasing said that they will buy their next home in another state outside of California — the highest level since 2005. Older generations were more likely to buy outside of California as 37 percent of baby boomers and silent generation planned on repurchasing in another state, but only 30 percent of Millennial sellers planned to do the same.

https://www.car.org/en/aboutus/mediacenter/newsreleases/2019releases/2020forecast

Off-Market Device

An article about Compass agents who used a new off-market service called Aalto to sell a special house.  Ethics and fiduciary duties are getting shrugged off, and instead the off-market sale has become the sexy option.

Hat tip to recently-married Susie for sending this in – congratulations to you and Mr. Right!

https://www.sfgate.com/ontheblock/article/Restoration-Hardware-San-Anselmo-house-real-estate-14468117.php

An excerpt:

Because of the length of the renovation and the fact that there’s nothing else like it in their Sleepy Hollow neighborhood, Hansmeyer and her husband were loathe to put the home on the Multiple Listing Service (MLS). People were already fascinated with the property and she didn’t want a bunch of neighbors nosing around her home.

“We wanted the right people to know about it but we didn’t even want our neighbors to know it was for sale,” she said. “We didn’t want to be ‘those people’ that everyone was talking about, especially because it was going to be at a price point that hadn’t really been seen in that area before.”

At first, her realtors Laura Reinertsen and Kristin Sennett took the home on as a traditional “pocket” listing, talking to other agents in her network to see if they might have a buyer for the turnkey property.

“Every fixture and finish was custom made to her specifications and she is very particular about lines and design,” Reinertsen recalled. “Light fixtures lined up exactly with the line between the refrigerator and freezer. And everything was like that. It was perfection and we had to find somebody who would pay for perfection in an area where people wouldn’t ordinarily pay for that.”

The typical home in the neighborhood sells for about $700 a square foot. Hansmeyer was looking for more than double that amount. So her agents suggested Aalto, a new “private listing” service just for Marin County (it recently expanded to San Francisco as well) that splits the difference between the privacy of a traditional pocket listing and the mass exposure of the MLS.

It immediately made sense to Hansmeyer and her husband. “We both come from a retail background and understand the way people buy,” she said. “We felt like the ability to visit a website just made sense to us. It’ll get in front of the right people.”

Only buyers working with an agent can see the homes on Aalto, and even then the exact locations are cloaked so that only qualified, interested parties can tour the home. Sellers can only use Aalto if they have signed a listing agreement with an agent, and they must agree to sell if a buyer is willing to meet their requested price.

These prices may be higher, but because multiple offers are much less common on Aalto, buyers have the certainty of knowing that the listing price is the real price. There’s no need to play the underpricing to get multiple offers game because the whole point of Aalto is that you only need one buyer. Owners who wouldn’t even have listed their homes otherwise use Aalto “just want to see if that buyer is out there that might be willing to pay a price that other people can’t understand,” Reinertsen said.

The service went live in early 2019 and was quickly adopted by top-tier agents. Reinertsen and her team sold over $30 million in homes on Aalto so far this year, more than half their overall total. She believes the move has happened quickly because the market was hungry for just this kind of middle ground. “Before that people would ask, ‘What do you have off market?’ But there really wasn’t a vehicle to sustain that marketplace. We could say, ‘We have this in our pocket.’ But there wasn’t the exposure to keep it top of mind,” she said. “Aalto just keeps the information out there and circulating.”

And that’s important when homeowners are asking for prices even higher than their already expensive counterparts. These homes often take longer to sell and their owners tend to value getting their price and maintaining their privacy over a quick sale, Reinertsen explained. “Our clients are private people and I think a lot of them have been through the MLS system before. They know if they go that route every single neighbor is going to come through that home. Every single friend of the neighbor is going to come through that home. And that makes people uncomfortable,” she said. “And I think that they also believe, because our market is so hot, that if their home doesn’t sell on the MLS after 10 days on the market, they’re not going to get their number.”

The number Hansmeyer had in mind was $6.5 million. She and her realtor knew it was worth it, and they were willing to wait. “She was confident in her craftsmanship and we were confident in her ability so we knew the buyer would appear,” Reinertsen said. “It just needed to be out there.”

After several months, a buyer who Reinertsen called “perfectly matched” for the property appeared. It sold for $6,262,000 in April. Had the home been in Ross or Kentfield, she said, it could have sold for over $10 million.

War

War is playing at the Belly Up next Wednesday!

They were at Kaaboo last year:

Multi-platinum-selling WAR, the original street band, has been sharing its timeless music and message of brotherhood and harmony for over 4 decades before millions across the globe.The long list of hits includes “Low Rider,” “The World Is A Ghetto,” “Why Can’t We Be Friends,” “The Cisco Kid,” and many more. The phenomenal group has been honored twice by its hometown of Los Angeles for making positive contributions to the betterment of the community with its powerful music and has been honored by President Obama as “All Day Music” was placed on his official playlist of the Summer.

More recently, LA Weekly declared WAR in the top 10 concerts of 2018. With 12 Billboard Top 40 Hits, 7 top 10 ten hits, over 50 million records sold to date, and countless samples and nods by artists such as Kendrick Lamar, Flo-Rida, Tupac, Smash Mouth, Janet Jackson, Dave Matthews, Korn, and countless others, WAR has not only sealed their status as a household name, but has also proven that their music and message continues to be as relevant as ever today as they have always been.

Downsizing Out-Of-State

Are you thinking of downsizing and moving out-of-state?

This new survey says half of Californians are considering!  Let’s give it a go!

A few years back, we had sold David Meek’s sister a house in Pt. Loma, and she told him to check me out.  David is a Phoenix-area realtor who has since then emulated the jimjamalama, and has been running his own realtor blog in the Valley of the Sun:

www.arizonareport.com

David and I have cherry-picked a reasonably-priced home in an exclusive area close to town as an example of the lower-end house you can buy in a good area of Phoenix.

Obviously, if you spend a little more, you can buy a better home with extras, but at least this video tour gives you a look at what you get for $414,900:

https://www.zillow.com/homedetails/4132-E-Beryl-Ave-Phoenix-AZ-85028/7828660_zpid/

Zestimate Manipulation

We ended up with 12 offers on my listing in Rancho Penasquitos, with SIX of them over $900,000.  Donna and I did some expert maneuvering to coach the buyer-agents higher on price, and we may have gotten an assist from Zillow too.

This was their zestimate before the listing hit the market:

This was their zestimate after the listing went on the MLS for $869,000.  Zillow has no shame – they just hit the number. At least Redfin tries to hide it by changing their estimate to within 1%:

Then we RAISED our list price to $899,000 because we were getting such good action, and Zillow rasied their zestimate right back up:

They have no qualms about manipulating the zestimates right before your eyes.

Think of what they will do to you when they try to buy your house.

The End of Coming Soon/Off-Market Deals?

The National Association of Realtors is attempting to regulate a change in the Coming Soon environment – see above. The way it is written, however, will just take us back to the days when off-market deals were done behind closed doors because they are permitting the ‘office exclusives’.

Coming Soons were the industry’s public admission that we do off-market deals, and to give you a chance to get your piece of them. But now the N.A.R. wants brokerages to pick a lane.

The choices:

1. Comply with the new rule, and change the name of your off-market deals to ‘office exclusives’, where no one can see them.

2. Don’t do anything, and pretend that off-market deals aren’t happening at your shop.

3. Declare publicly that off-market deals are a vital part of your business, and keep marketing them as Coming Soons to the public, in spite of any changes in the N.A.R. rules. What are they going to do?

Numbers 1 & 2 above are the less-transparent choices, and the easier way to go for the agents who justify their off-market deals by saying the seller got what they wanted.

Number 3 is the fully-transparent admission of the truth – agents like to pad their wallets with off-market deals, and don’t see anything wrong with that.

Off-market deals aren’t going away, regardless of the rules.  The existing rules already state that all listings are to be inputted onto the MLS within 48 hours, but it gets ignored and there is no policing or penalties.

It’s better for everyone involved – agents, buyers, and especially sellers – to put every listing onto the MLS to ensure full exposure so everyone can compete. Buyers would feel they had an equal chance to buy, sellers get top dollar, and all agents get a fair chance to earn a paycheck.

But N.A.R. and the industry’s upper management looks the other way.  It will take a class-action lawsuit or new regulations from the federal government to bring real change.

Here are Rob’s thoughts:

https://notorious-rob.com/2019/09/on-nars-mls-policy-statement-8-0-a-step-forward-into-confusion/

Exposing Commission Rates

Historically, buyer-agents haven’t really had to demonstrate their true value – most buyers just grab somebody they like.  But now the buyer-agent compensation is going to be revealed in Washington, starting tomorrow – and it is inevitable that it will happen everywhere.  Buyers making smarter decisions about who represents them is a great idea – hopefully they won’t select their realtor purely based on their rate! P.S. This is buyer-side only. I’m not sure the listing-agent rate will ever be public.

Hat tip to SM for sending this in:

Link to Full Article

An excerpt:

Starting immediately, the new rules will make it easier for homebuyers to figure out if their agent is only showing them houses offering a high buyer’s commission, said Greg Gans, a broker at Hardy Realty in Seattle who describes himself as “almost exclusively” a buyer’s agent.

“I know plenty of agents who see a 1% commission, and they’ll show the house, but they’ll say, ‘Oh, this is a problem, and you’re going to have to spend this amount of money on the kitchen,’” Gans said. “Brokers think of crafty ways to steer people away from homes where they’re not going to get the full commission. Or brokers may not put together the most competitive offer” on homes offering low commission.

In the long term, though, the change could lead to a system where buyers and sellers each compensate their own agent, said Windermere broker Russ Cofano, instead of funneling commission through the seller’s agent. That could make it less expensive to sell a home.

PQ Bidding War!

Let’s review what it takes to create a solid bidding war.

  1. Maintain and improve your home constantly over the years.
  2. Install a master bathroom like this!

3. List with Jim the Realtor for an attractive price, do $3,200 of staging, and take off for the weekend!

I inputted the listing at 8:30am on Saturday morning with professional photos, and got immediate results – over 100 people came to open house the same day.

Sunday’s open house had nearly as many people, and those who didn’t attend could watch my walk-around tour on video: https://youtu.be/LCEDYc4rkaQ

We’ve received EIGHT WRITTEN OFFERS (seven over list price), and going for more.  Three showings set up for today, and Donna and I are fielding questions and encouraging higher bids all day long!

To ensure top dollar, we treat everyone fairly and give them every opportunity to bid up the price. The highest offer so far is $890,000, and others have said they are going higher so we raised the list price from $869,000 to $899,000 on the MLS for added exposure on the realtor hotsheet. I mentioned that we have eight offers too.

Want this kind of attention when selling your home? Hire Jim the Realtor!


Inventory Watch

The end-of-summer market feels similar to last year, with just a few more pendings over the last five weeks. In spite of the high prices, people don’t seem interested in selling much though.

There was a 13% drop in new listings, year-over-year:

NSDCC Last Five Weeks:

Year
New Listings
New Pendings
2018
434
246
2019
379
257
Diff
-13%
+4%

When is the best time to sell? When there is little or no competition, and rates are in the 3s!

(more…)

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