Shiller calls the real estate market inefficient and irrational in the article below – and I don’t know if we can even call it a market. Entry and exit takes weeks at best and are clumsy. You don’t know who, when, or how much until – and if – luck happens to find you. The entire game is rigged to encourage over-paying, so the conservative buyers have a hard time competing.
Home prices have been climbing. They have risen 27 percent nationally since 2012, even more in places like San Francisco. But why worry? If you accept the efficient markets theory — and believe that real estate is an efficient market — then these prices are based on “new information,” even if you don’t know what that information is.
The problem with this kind of thinking is that the efficient markets theory is at best a half-truth, as a voluminous literature on market anomalies shows. What’s more, even that half-truth is grounded mainly in the stock market, which attracts professional investors who sometimes do make the market behave efficiently.
The housing market is another matter. It is far less rational than even the often irrational stock market, for a couple of important reasons. First, most investors find it difficult to understand how housing supply responds to changes in demand. Only a small minority of people think carefully about such things. Second, it is very hard for the minority of smart-money investors who do understand such matters to bet against bubble-level prices in real estate markets. In housing, the smart money has relatively little voice.
I have two RSF listings that are outside the Covenant.
One seller asked me what the chances are of selling.
I said 20%, to which he said, ‘Yikes’.
But any RSF listing only has a 30% or 40% chance of selling. There were 436 listings, and 127 sales (29%) last year in the 92067.
Here are the detached-home total listings and sold listings from 2014:
Area or City
Zip Code
2014 Listings
2014 Solds
Percentage
Cardiff
92007
130
80
62%
Carlsbad NW
92008
302
214
71%
Carlsbad SE
92009
789
525
67%
Carlsbad NE
92010
201
132
66%
Carlsbad SW
92011
336
209
62%
Del Mar
92014
306
193
63%
Encinitas
92024
646
405
63%
La Jolla
92037
637
321
50%
RSF
92067
436
127
29%
Solana Bch
92075
152
82
54%
Carmel Vly
92130
673
470
70%
All Above
Total
4,608
2,758
60%
Listings in the Ranch are the least likely to sell – by far.
What can a listing agent do to help the cause? State your case on value.
It’s always tough to estimate the value of unique or custom homes – but those in the Ranch have so many variables it will make your head spin because every property is so different.
As listing agent, it’s my job to justify the value.
If the purchase is financed, then an appraisal needs to be completed. Even though the sales price will have been given to the appraiser in advance, it’s still the listing agent’s job to make sure they hit the number.
As long as we gathered comps in the beginning to justify our recommended list price, and we have the need to deliver same to appraiser, we might as well include them in the listing to help buyer agents come to the right conclusion.
My case to support the $2,795,000 list price of 7060 Via Del Charro:
After his wife passed away, the 65-year-old sold his house and began renting a 1,400-square foot apartment eight miles away in Bethesda, Maryland. The trial attorney now uses his downtime to enjoy warm summer evenings on his terrace.
“I pay a pretty steep rent, but it’s worth it,” Abelson said. “I don’t pay property taxes, I don’t pay for maintenance, plumbing or electrical. I don’t have to pay for the grass cutting. It’s just easier than being a homeowner.”
The number of renters who are 65 or older will reach 12.2 million by 2030, more than double the level in 2010, according to research by the Urban Institute in Washington. While the millennial generation born after 1980 has driven demand for apartments in recent years, baby boomers — those born from 1946 to 1964 — will be the next wave, pushing up rents and spurring construction of more multifamily housing.
Real estate developers such as Bozzuto Group, Abelson’s management company, and Alliance Residential Company are building projects where multiple generations can coexist. Should the supply of rental properties fail to keep up, however, younger people will be competing for housing with the burgeoning population of older Americans.
“It’s a combination of their sheer size and that they’re entering the age range where they increasingly downsize,” Jordan Rappaport, a senior economist at the Federal Reserve Bank of Kansas City, who has also studied the subject, said in a telephone interview. As a result, “it will put upward pressure on rents for all types” of multifamily homes, he said.
The company expects to fire about 15% of its semiconductor business’ full-time staff, significantly reduce its temporary workforce, and streamline its engineering organization.
They expect to layoff around 4,500 people company-wide. What does that mean for the local real estate market? Let’s point out the general changes:
1. YOU DON’T HAVE TO MAKE YOUR PAYMENTS.
A result of the financial crisis – banks are equipped to let you ride for months or years without making payments.
2. CUSHION
There will be severance packages, plus stock and stock options to live on.
3. ONLY RECENT PURCHASERS WOULD FEEL THE SQUEEZE.
If a Q-employee bought their home more than 3 years ago, they have plenty of equity, and have probably re-financed at a low rate. Payment amounts are tolerable, especially compared to rents in the same area.
4. MICKELSON EFFECT
Phil Mickelson made a big stink about the state tax he has to pay (probably around 13%) – but you haven’t heard a peep out of him since. Why? My guess is that his wife put her foot down, and told him they aren’t moving anywhere. The same thing would happen here – even if a spouse or both are laid off, they will exhaust all avenues to maintain the same lifestyle and kids’ upbringing. Selling the house would be the absolute last resort.
5. BANK OF MOM AND DAD
The kids have been very successful up to now, and the grandparents will drain a few accounts to help keep the grandkids’ lifestyle in place.
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There would be loads of buyers today of homes priced at 20% under today’s values. If that is the floor, then about 10% off would be a retail-price target. We could have a few different factors contribute to a similar discount (Fed move, Grexit, unknown factors, etc.), but we already endured the most severe downtown in the history of real estate and the premium areas didn’t take much of a hit.
Let’s use Carmel Valley as the target market to follow:
May + June stats
# of Sales
Avg. $/sf
Median SP
Avg. SF
2007
96
$391/sf
$1,003,750
3,117sf
2012
113
$323/sf
$883,000
3,076sf
2015
97
$405/sf
$1,235,000
3,183sf
A mass exodus of elderly or foreign homeowners is much more of a concern – they’re urgency is higher, they have less reasons to stay, and they can probably afford to dump.
Lots of happy talk today about the highest sales pace in eight years, and the highest U. S. median price of all-time. Somehow they left out the credit-is-too-tight mantra this week?
Lawrence Yun, NAR chief economist, said that buoyed by June’s solid gain in closings, this year’s spring buying season has been the strongest since the crisis began.
“Buyers have come back in force, leading to the strongest past two months in sales since early 2007,” Yun said. “This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy.”
But the happiness has it limits – and around San Diego County it’s those detached-homes under $1,000,000 that are really cooking:
Category
Below $1M
Above $1M
Active Listings
3,958
1,625
June Solds
2,161
315
Months’ Worth of Inventory
1.8
5.2
The trickle-up effect hasn’t benefitted the higher-end market as much as you’d expect. Maybe now that lenders have eliminated the anti-buy-and-bail guideline, we might see more move-ups!
A story about realtor.com giving Z a run for their money. Not mentioned is the fickle nature of realtors – known for jumping around to the latest fad. Murdoch should do realtors a favor and buy Zillow:
“In February, Zillow closed its $2.5B acquisition of Trulia, with the intent of consolidating audience market share and driving cost synergies, mainly from sales & marketing,” the analysts wrote.
“And now management is seemingly letting the Trulia brand slowly fade away, we think to the benefit of Realtor.com,” the analysts continued.
“Indeed, we believe Realtor.com may be the new Trulia, a large competitor that will relentlessly pursue audience market share, and will at the very least force Zillow to spend more on marketing than their current guidance for $100 million in post-merger cost synergies would suggest,” the analysts said.
The Barclays analysts also write that the Trulia integration has been “more challenging” for Zillow than originally anticipated.
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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
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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
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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
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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
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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
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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
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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
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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.
