The new Coming Soon feature in our MLS has been available since Tuesday.
Since then, there have been 32 new listings of houses between La Jolla and Carlsbad. Eight of the 32 have been inputted as Coming Soon (not active listings).
The common reason for having Coming Soons is to try out the price, and to build anticipation among realtors like a movie trailer does with moviegoers.
My random thoughts and observations:
Because the policy forbids any showings of the homes, the MLS agents will want to know when showings will be available. But the MLS doesn’t provide a box for that date, and none of the eight agents mentioned a date either. We know that Top Gun 2 is being released on December 23rd – which builds anticipation.
Four listings include the showing instructions as if they don’t know the policy, or are openly flaunting it. Will they allow showings today while listed as Coming Soon? I don’t know, but it looks like it.
Three listings had no photos, which would be expected of a listing that is in the works – it would be natural to follow with photos once the listing is ready. But it’s hard to build anticipation without visual aids. The movie trailers come with photos and video:
But the big question is what will the listing agents do when an offer is submitted during the Coming Soon period, subject to inspection? There are no written rules in the policy, so it is an individual choice.
Do you tell the buyer’s agent to wait until it’s active? Or do you take it to the sellers and negotiate a deal?
When do you let the buyer see the interior? Do you show before coming to an agreement, which would be smart but against the rules? Or do you make the deal, and then show them the interior and stay within the rules (it would be a pending listing now, not coming soon). Or once you receive an offer, do you flip the listing into active status so every agent and buyer can have a shot?
We have no rules, and no precedent.
We should ask the listing agents to answer these questions in the listing, so agents know what to expect.
If we don’t, here’s what will happen.
Buyer: Thanks for that coming-soon listing, it’s exactly what I want. Can I see it?
Buyer: Can I buy it?
Agent: I don’t know.
Buyer: Send them a full-price offer.
Agent: Ok, but I’m not sure what will happen.
Is that sequence good for anyone involved?
While the MLS was cordial to respond to requests from brokerages to create a Coming Soon category, we need to go further. Let’s clearly define the rules of engagement, for everyone’s sake.
This megamansion with two safe rooms and a retractable roof for stargazing, isn’t listed for sale. Instead, the Pacific Palisades house is hitting the market as a rental asking $350,000 a month.
The master suite, accessed via a retinal scanner, has a custom-designed roof that retracts to reveal the sky, either entirely open or through glass. It can also be used as a projection screen to watch movies in bed.
“You feel like you are sleeping outside,” he said. “It’s like a campfire environment right in your own home.”
I called it a Stunning Recovery on Monday, and they used the same words today. Coincidence? 🙂 Hat tip Mitch!
If mortgage demand is an indicator, buyers are coming back to the housing market far faster than anticipated, despite coronavirus shutdowns and job losses.
Mortgage applications to purchase a home rose 6% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Purchase volume was just 1.5% lower than a year ago, a rather stunning recovery from just six weeks ago, when purchase volume was down 35% annually.
“Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks,” said Joel Kan, an MBA economist. “Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”
As states reopen, so are open houses, and buyers have been coming out in force, if masked. Record low mortgage rates, combined with strong pent-up demand from before the pandemic and a new desire to leave urban downtowns due to the pandemic, are driving buyers back to the single-family home market. It remains to be seen if this is simply the pent-up demand or a long-term trend.
Yesterday, we closed our fourth off-market buyer sale of the year (Richard, 1 and Jim, 3).
Here’s how they happened:
Reaching out to other agents working the neighborhood.
Saw one in the Compass Coming Soon section (which was public).
Saw one on Zillow as a Coming Soon.
I haven’t been a proponent of this method for my sellers. But pursuing off-market inventory is a good way for buyers and their agents to increase their choices.
One challenge to completing an off-market sale is that the seller will use the idea of going on the open market as a negotiating tool, and they are prone to beating you over the head with it. But at least the chances of getting into a bidding war are greatly reduced.
The new Clear Cooperation policy allows for in-house sales, which is legitimizing the off-market sale. Brokerages everywhere are being forced to develop their own exclusive off-market platforms.
Now we have Coming Soons being uploaded to our MLS only (and not to the search portals).
I guessed that NSDCC sales would be down 60% in 2Q20, but April was the low point (sales were down 42% YoY), and May won’t be better but June could finish strong. Quotes from the UT article which is linked at bottom:
“Sellers have taken a bigger step back than buyers,” said Jordan Levine, deputy chief economist at the California Association of Realtors. He said low inventory means many buyers in markets like San Diego are forced to fight it out for a limited number of properties — and continue to push prices up.
Levine said he did not expect a major drop in prices like during the Great Recession because the fundamentals of the market were strong going into this crisis. That is, there weren’t a lot of shaky home loans that couldn’t be paid back and banks that were over-leveraged. Also, he said governments and banks are more determined to keep people in their homes now than during the recession, when a lot of foreclosed homes flooded the market.
“Institutions realize it is better to try and help folks hang on to these homes and make it through the crisis,” he said, “and that will ultimately be a lot cheaper and less damaging to the economy.”
At least some analysts and business owners say this might be a good time to buy or sell. Take Josh Stech, the CEO of the San Francisco-based company Sundae. His business buys distressed homes quickly from homeowners and only focuses on houses that need significant work.
Stech said it may actually be a good time to sell. He predicted there would be a big increase in new listings as stay-at-home orders are lifted so buyers would have more options. Also, he said there would be at least some foreclosures coming out of the economic shock of the past few months, also increasing supply.
“The recommendation I’ve been giving people is not what I’ve been reading,” he said. “My perspective is if you are thinking of selling in the next year or two, this is the time to sell. I would say you will get a better price today than the next year or two.”
On the buying side, he also said low interest rates are likely not to be this great forever, so there is also opportunity from that side on the market. At the same time, he said mortgage credit requirements are only getting tougher. The mortgage rate for a 30-year, fixed-rate loan was 3.31 percent in April, said Freddie Mac, down from 4.47 percent at the same time last year.
Home prices were up annually across Southern California by 4.3 percent. Riverside County had the biggest jump, rising 5.8 percent for a median of $412,500.
It was followed by San Bernardino County, up 5.4 percent for a median of $353,000; San Diego County up 4.3 percent for the median of $594,500; Los Angeles County up 3.8 percent for a median of $630,000; Orange County up 2.7 percent for a median of $755,000; and Ventura County up 2.6 percent for a median of $600,000.
Washington, D.C. – Today, to support borrowers and mortgage servicers, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) have issued temporary guidance regarding the eligibility of borrowers who are in forbearance, or have recently ended their forbearance, looking to refinance or buy a new home.
Borrowers are eligible to refinance or buy a new home if they are current on their mortgage (i.e. in forbearance but continued to make their mortgage payments or reinstated their mortgage). Borrowers are eligible to refinance or buy a new home three months after their forbearance ends and they have made three consecutive payments under their repayment plan, or payment deferral option or loan modification.
“Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” said Director Mark Calabria. “Today’s action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible.”
FHFA is also extending the Enterprises previously announced ability to purchase single-family mortgages in forbearance. The Enterprises are now able to buy forborne loans, with note dates on or before June 30, 2020, as long as they are delivered to the Enterprises by August 31, 2020 and have only one mortgage payment has been missed. The previous policy was set to expire on May 31, 2020.
Fannie Mae and Freddie Mac also extended their moratorium on foreclosures and evictions until at least June 30, 2020. The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The current moratorium was set to expire on May 17th.
Click here to see if your mortgage is owned by Fannie Mae:
Our MLS is going to provide a Coming Soon feature, which will fluster the agents who say that the Coming Soons build anticipation (like a movie trailer) and test pricing, but who then use the concept to circumvent the MLS and instead advertise directly to the consumer in hopes of double-ending the commission.
The Coming Soon status launches in San Diego Paragon Tuesday, May 19th. From that day forward, when entering listings for sale in San Diego Paragon, you may choose between Active and Coming Soon.
To prepare for this launch, Paragon will undergo scheduled maintenance from 10:00 PM PT Monday, May 18th to 6:00 AM PT on Tuesday, May 19th – a total of eight hours. Paragon will be unavailable during this time. Below is a brief video to help you understand the details of this status.
How does Coming Soon work?
Coming Soon allows listing agents to take up to 21 days to stage the property, take interior photos, prepare it for showings, and so on, without Days on Market accruing.
How is Coming Soon similar to Active?
– Marketing is allowed in both statuses, so long as Coming Soon listings are clearly marked as Coming Soon.
– Both Coming Soon and Active listings are fully displayed to other professional users of MLS systems.
– The listing agent offers a commission on both Coming Soon and Active listings.
How is Coming Soon unique?
– Coming Soon listings have limited distribution: they will not go out from the MLS to portals like Zillow, Trulia, and Realtor.com, or to IDX broker and agent websites.
– Showings are not permitted in Coming Soon.
– Because of these limitations, Days on Market do not count in Coming Soon.
The showings in California are within 16% of last year’s number, and 2019 was a good year. We’re also +28.7% above the first week of January – I’ll take it!
The actives and pendings above are the net movements. Total actives are new + previous active listings minus new pendings, withdrawns, cancelleds, and expireds. Total pendings are new + previous pendings minus escrows that closed and failed escrows.
Today’s pendings count only dropped two (226 to 224), and if a few more new pendings from the weekend are reported today, then the graph line will turn positive.
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