When there are so few companies doing any exhaustive research about the market – especially at the local level – realtors will take whatever they can get and pass it along to clients. In this case, that message will be positive.
The full presentation here:
http://cdn2.blog-media.zillowstatic.com/3/151001_Stan_D3-89e328.pdf
A 15-bedroom American mansion with a guitar-shaped driveway has gone up for auction – with a starting bid of $0.
Seven Montagel Way will go under the hammer on October 31.
The 27-acre property in Shoal Creek, Alabama comes with a horse riding arena and a fitness centre.
The impressive 16-bathroom property includes a decadent foyer with ceiling murals and crystal chandeliers.
It also boasts a screening room with a 170-inch screen, theatre-style seating for 25 people and an authentic box-office, a commercial-grade elevator, a wine cellar with shelving for 2,000 bottles and a game room.
In 2011 the property was listed for $17.9 million (£11.67million) by owner Larry House – the former CEO of MedPartners, a firm that supplies staff to hospitals and medical centres – but he removed it after it failed to sell.
Last year, the house was put on the market again for $13.9 million (£9million). At the time, Pam Ausley, the listing agent, said the property awas too big for Mr House.
She said: ‘Their kids are grown, and they’re just ready to do something different. He knows it’s not the best time to sell, but he’s just ready.’
Mr House also put the property up for auction in 2003 but bought it back when it sold for just $3.95 million (£2.57million).
CEO and founder of DeCaro Luxury Auctions, Daniel DeCaro, said: ‘Inspired by historic French and Italian castles of Europe, architect Bill Shepard designed 7 Montagel Way to feel like a traditional palace in Versailles.
Read more: LINK
Speaking of newcomers, it won’t just be outsiders who fuel the future demand.
Mortgage rates dipping into the threes make buyers giddy, but today’s low rates are just the sweetener. Demand is being driven by the soaring rents.
Rich people can choose in or out – I heard the story yesterday about the doctor couple who have been renting a house in Santaluz for 13 years. But for those with static incomes, the reality is grim.
More on rents here:
Everyone knows that Pearl Jam’s Eddie Vedder attended San Dieguito High School in the early 1980s – and is a huge Cubs fan!
Have you ever heard the story of how the guys in Pearl Jam got together? It was Jack Irons, the Red Hot Chili Peppers drummer, who helped introduce Eddie to the rest of the guys.
https://en.wikipedia.org/wiki/Eddie_Vedder
Here is Eddie telling the story – those of us who hit the local clubs back then will appreciate the location:
Millennials will undoubtedly “drive the growth of aggregate housing demand’.
But at what price?
We’ve already agreed that the majority of baby boomers will be fine, and age in place. After their demise, the disposition of the house can be debated, but it’s really the same argument. The heirs who are comfortable will keep the family estate to occupy or rent, and the desperate heirs will sell it.
Apparently there are about as many millennials as boomers – roughly 75 million.
Will there be as many millennials who are ready, willing, and able to pay today’s prices – or most-likely higher prices – to soak up the supply of desperate homes being sold?
Below is the latest chart on how they feel. About half (56%) are worried about the cost of housing – at least they are paying attention.
What about the rest?
Either the other 44% plan to be rich and don’t worry about the cost of housing (in which case we should be covered)…..or they have already given up hope.
Click on image to enlarge slightly.
Some disagree with my idea that, while the majority of baby boomers will be fine, there will be a group that is financially restrained and will need to sell their house.
Richard Green is a USC ivory-tower guy, so he obviously knows his stuff. He chimed in on twitter, and cited his report that mentioned:
The massive demographic shift will not result in another housing crisis.
This is because the educational and income levels of the current and future seniors are relatively higher than before, leading them to consume more than previous generations. Also, the size of the Millennial generation will drive the growth of aggregate housing demand, although the growth of per household housing demand may be relatively modest.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2614638
He doesn’t just make this stuff up. He also includes formulas to prove his case:
So there you go – nothing to worry about.
A likely scenario is that any future home sellers will get bailed out by the newcomers. According the SANDAG projections, there will be another million people moving to San Diego County! Yippee!
http://www.sandag.org/uploads/publicationid/publicationid_1490_11298.pdf
This survey is dated 2014, and they should update it every year – or at least until I’m right about having a boomer liquidation sale coming down the pike!
This survey asks several different questions, but notice how 20% to 30% of the responses seemed to divulge some stress or uncertainty about their future:
Uh-oh. It looks like this homeownership thing could be a boomer addiction:
It’s still early in the game for most boomers.
But here’s where the game changers start to come out. Only 58% don’t plan to sell? Fine, they aren’t going to make the market – it’s the other 42% that will determine our real estate future:
Fluff question below – of course we like our home, at least until selling it becomes a better idea:
Almost a quarter of boomers know they are already short on income, and will be hitting the housing ATM. How many others who didn’t expect to use their equity in 2014 will eventually need to cash out for various reasons?
Here’s where the real trouble starts below – 46%???
The best question towards the end of the survey once respondents have loosened up – and lo and behold, 61% of boomers aren’t sleeping that well.
If it only ends up being 20% to 30% of boomers who make a move, that’s still at least 15 million people in America who will be deciding our market!
The biggest concern?
Elderly folks who haven’t moved in a generation (or two), who know their money is running out and happen to see a couple of lower-priced sales nearby. In a effort to bank as much equity as possible, they hit the panic button and grab the first realtor they find who then dumps their house for 95% of value.
It’s a downward spiral that could pick up steam quickly.
The California Association of Realtors published their 2016 Forecast last week, and it’s a whopper – 131 pages (scroll down to bottom of page for full report).
Here are the highlights:
San Diego County prices and sales are positive, which is a healthy sign. The median sales price was up 9.1%, and the number of sales increased 11.5%.
I’m going to take the under for 2016, and guess that we’ll have fewer SD sales next year, mostly because on the remaining graphs below:
We had 24% fewer listings hit the market than last week, but one more pending! With mortgage rates back in the threes, buyers are scrambling to see what they can get before the holidays.
We’ve been busier in the last week than it’s been all year! Kayla did her first open house without me – and came fully prepared with her notes – plus Donna worked eight hours in the field on Saturday!
I gotta get them more involved with the blog!
Click on the link below for the complete NSDCC active-inventory data:
I love her sales strategy here, and we should adapt something similar!
The estate sale is next weekend, October 16, 17, and 18th:
