California ranked #29 overall, but hey – we’re #1 for restaurants!
Living Conditions in California (1=Best; 25=Avg.):
I got an update on the group of brokerages who have hired the same law firm to go after the National Association of Realtors. If they intend to disrupt the August 17th changes, they better get on it! But they are going let that go, and instead they will be pursuing the legal alternatives to end the Clear Cooperation Policy.
Regardless how you feel about the CCP, the sellers should have the right to choose in or out. Will getting rid of the CCP create more off-market deals and help eliminate the buyer-agent? Absolutely, but that’s the trend any way.
Compass held its Q2 earnings call on Wednesday, July 31, 2024. During the investor Q&A portion, CEO and Founder Robert Reffkin claimed that NAR’s “clear cooperation” rule is on borrowed time.
Clear cooperation requires that REALTORS® list a property on an MLS affiliated with the National Association of REALTORS® (NAR), within 24 hours of marketing the listing elsewhere. The rule is one of several that has been described as violating antitrust statutes, allegations that have brought the real estate industry under scrutiny over the last year.
In court filings for the case Top Agent Network, Inc. v. NAR, et al (where the plaintiff alleges clear cooperation is a tool of monopoly), NAR appeared “amenable” to revising the rule. Reffkin claimed such a change–and more–are inevitable.
“I think clear cooperation will end,” he said, and called the rule “anti-homeowner.”
“I believe that too much of the way the system works today isn’t for the homeowner. And so what–I’ll give you a couple examples. Days on market is the killer of value. Price drop history is the killer of value. The reason why private exclusives at Compass are so popular is because they do not have days on market when they go up, they do not have price drop history. When you go to a Mercedes-Benz lot or any other luxury goods, you don’t see on every Mercedes-Benz the price drop or the days on market,” said Reffkin.
He continued:
“Clear cooperation, the problem with it is, it’s forcing homeowners into negative insights. It’s saying anyone who has an agent, after one day of public marketing where it was no negative insights on a place like Compass or through your agents, you have to put it in the MLS, and then it goes to the system which the homeowner doesn’t have a choice on.”
https://www.rismedia.com/2024/08/01/compass-earnings-call-q2-2024/
List price is $1,380,000:
The agri-hood at the top of the hill in Leucadia – where new homes surround a 3-acre farm – also has a restaurant too that has locals buzzing:
https://sandiegomagazine.com/food-drink/haven-farm-fox-point-farms/
They have new homes but most are sold out currently. They have 1-br condos available from $945,000:
https://www.sheahomes.com/new-homes/california/san-diego-area/encinitas/fox-point-farms/
Starting next weekend, this is the form you will see at every open house in California. It is a mandatory form, and EVERY visitor must sign it or they won’t be allowed to view the home.
What’s worse is that the association will be sending shoppers around to verify agents are using the form, and properly explaining the options. Fines will be levied upon those who don’t.
Visitors will want to use their real name, just in case they decide to buy the home. But you’d be crazy to give your actual phone number because the agent will call you until you buy or die.
Buyers need to be prepared to take the next step if they like it – do you buy it from the agent on duty? How many other buyers are they already representing? Should I hire my own buyer-agent?
Opinions from the twitterverse on how the coming changes will affect the market:
Living in Flat City can be a disaster for those recent purchasers who buy the wrong house, or get divorced. If you have to resell your home in a year or two after buying it, the down payment will get eaten up and you may not be able to buy another house….unless you leave town.
When the impact from the NAR settlement was coming into focus in April, the NSDCC active listings that offered a 2.5% commission to the buyer-agent was at 57%.
Of the last 105 NSDCC listings, 36% are offering 2.5% or more commission.
The new rule hasn’t gone into effect yet, but more listing agents must be confident that lowering the incentive to buyer-agents is a good idea. In ten days, there won’t be any commission offered on the MLS, and you can tell by the way it is going that any possible ‘seller concessions’ will be minimal. Of the 64% who are offering less than 2.5% in today’s count, NINE of them are offering zero percent already – and the rule isn’t even in effect yet!
I think that the whole idea of seller concessions paying for the buyer-agent commission will be toast within six months. If buyers want their own representation, they will have to pay for it out of their own pocket.
The buyers with limited cash available will be forced out of the market until they can come up with more capital. Or go direct to the listing agent, which is going to become a lucrative option for many.
Now that rates have come down close to 6%, the next ten days should be a real sprint!
After that, there should be a lengthy adjustment period. Random twitter post:
There were 52 new listings in the last week, which keeps the number of actives around the 500 mark (492). But we emptied out the pendings drawer last month. The number of July closings is up to 212 sales and there will probably be a few more tacked on to that number before it’s done! Of the 212, there were 36% of the sales that were all-cash.
To put it in perspective, here are this year’s NSDCC monthly sales:
Jan: 108
Feb: 157
Mar: 149
Apr: 200
May:186
Jun: 153
Jul: 212
(July, 2023: 170)
April’s 200 sales seemed like the high point of the year. By June, the count was down to 153 and it looked like the rest of 2024 was heading due south. What a rebound!
