Homes being sold above asking price?

[waitingtobuy]

Hi,

This forum has been my one-stop place to track SD housing market and I have been greatly influenced by the discussions here and has stayed away from buying ( costant pressure from Wife not withstanding…she needs a home NOW)

Anyway, I have been tracking few homes in Mira Mesa, Rancho PQ, RB, Scripps and near by areas. What I have started seeing is that houses are getting into escrow fast ( or much faster), are selling a little over asking price, bids are being out-bid quite fast.
Even foreclosure homes are selling at asking price or little over it. I am sure folks like SD Realtor or some one who tracks this area would have noticed it.

This puzzles me. With all the talks of downturn, I see this sudden movement and uptick. Is it temporary or here to stay? Are some areas going to be immune to a downturn if it even happens?

[LookoutBelow]

Advice:….Get a new wife….cheaper in the long run

You can either believe the real numbers or live in your wife's fantasy world

This isnt rocket science 

 

[(former)FormerSanDiegan]

“This isnt rocket science ”

True. But if it were, it would be too easy. At least in rocket science, psychology does not play a major role.

[Alex_angel]

What you are seeing is correct. The people that talk about forclosures and prices spiraling down are pointing to south east and south San Diego. Areas like Carlsbad, Carmel Valley, Scripps are still selling homes at or above asking. There still seems to be a slew of people with money who are buying.

Some people see a positive when they hear a 5% drop in price but to me that is a crock. A home that went up from $200k to $800k then dropped to $750k is not a drop at all. It is still priced 400% more than what its worth. Some people look at that $750 and think they’re getting a deal. You look at pigginton members and see that most are realists, but for everyone that agrees with the members here there are people that disagree. For every blog or website that predicts gloom in real estate there is a blog and website that predicts blue skies ahead. Sitting on the sideline and waiting is only going to get most people an ulcer. One month RE will be down 5%, the next month it will be back up etc…

The rule of thumb with common economics is if you can afford it then buy it. If you have to stretch to your last penny then reevaluate where you live and what your needs are.

[lniles]

What do you mean they’re being out-bid fast? I live off of Calle Cristobal (the North-West area of Mira Mesa, probably the most desired part of it) and houses as well as condos have been sitting for sale for MONTHS. Where is all this “fast” bidding taking place? A side note: I have personally experienced one of the sleezy tactics realtors use to drive up prices. They “close” at above-asking-price but they have an agreement with the buyer that they get cash back after the sale. For example, my neighbor wanted $640k for his house, the buyer and his sleezy agent came in and offered $700k with an agreement that the seller will give $60k cash back after the deal. That way, the buyer gets an additional $60k loan from the bank (that he wouldn’t have qualified for if it wasn’t a home loan), the seller gets his asking price, and the comps in the neighborhood go up because it closed on record at $700k. Thus, THIS IS A REALTOR-DRIVEN MARKET AND EVEN THE DATA YOU’RE GETTING FROM THE ASSESSOR’S OFFICE IS FALSELY ELEVATED.

[Alex_angel]

Iniles. What you speak of happens but it is not the standard in home sales. It has beomce the widest spreading rumour of what happens in the market. It is not the realtor that drives the market, it is the BUYER. People want to blame the feds, lenders, realtors etc… but the person to blame is the BUYER. Without a buyer who is dumb enough or willing enough to pay 5x what a home is worth the seller wouldn’t be able to sell it.

The consumer is responsible for the run up because they didn’t hold strong, they ran like sheep and got the biggest sucker loan they could. People need to look in the mirror to find the real culprit of the RE run-up.

[SD Realtor]

Waiting-

The market you have referred to is my home base. I also have been frustrated by the Scripps (Old Scripps) market. However I am not sure I have seen many overbids. Can you refer to the actual addresses for the homes that you have seen overbid? I can research them and give you more information. I am not sure I agree with you for Mira Mesa but give me some examples and I will look them up.

I am in very much the same boat as you and getting a new wife is not an alternative. I just gut it out when she starts beating me up about how everywhere has fallen but the homes we want. Let’s see what happens as the summer gets late. As I have previously posted, for many weeks in the spring, Scripps inventory dipped and stayed near 70 homes. Last I checked it was at 95 which bodes well.

In – Which home were you referring to? I recently moved from the Calle Cristobal area. In fact the Cheryl Ridge listing that I believe is active (it just RELISTED on the MLS) is the home we used to rent. Also the home around the corner from us sold last year and I thought there was something fishy about that sale. Not only did it sell after expiration but the price seemed out of whack to me. My sister in law at Coldwell also sold one a few blocks away on the canyon last year.

SD Realtor

[surveyor]

peanut comment

I am in very much the same boat as you and getting a new wife is not an alternative.

Classic. =nyuck= =nyuck=

[lniles]

That’s true; however, there are buyers out there who I wouldn’t call “dumb” but who were influenced by RE agents and neighborhood comps… To me, RE agents are like the stereotypical used car salesmen who at times are able to make lemons sound like Bentleys (they’re even making this original poster think that houses are “selling fast” and being “out-bid”). Some people can see through this, some people can’t. If the comps are wrong as well, where else do you go to get a fair assessment of the value of a home? Zillow and all others use the assessor’s info and the sales history. I know the false comps didn’t cause the run-up in the market, speculation did. The run-down of the market on the other hand, is definitely being delayed by these false-comp tactics. I don’t know if it’s the “NORM” but 3 out of 3 friends of mine who sold their homes in the past 2 years had this happen. All different agents. All in Mira Mesa. What are the odds of that? IMHO it’s enough to discredit the sales and assessor’s records, which are used for all our “median housing price” graphs and calculations (I.e. things are much worse off than even piggington.com followers believe). I will also be avoiding the use of comps in the future when I buy a house.

[lniles]

Alex_Angel: I’ve moved our discussion to
http://piggington.com/false_comps_fraud#comment-29002 if you wish to comment. I’d like to try and get feedback from other people who have experienced this so-called “not-the-norm” tactic. Already one other poster has experienced this as well. Let’s see if there are more.

[Carlsbadliving]

SD R,

Here’s one for you:

13559 Calderon Rd 92129
Sat for 4 months, with one price reduction, then sold for $60k over original asking price.

What do you know about this one?

[SD Realtor]

Carlsbadliving –

Ahhh Crestmont… We looked at one that went active there recently….

Smells like a rat to me. Here is what I see on the MLS.

Listing went active at 675k as original list price. Close of escrow was 8/15/06. Now if you look at the sold listing on the MLS, Prudential listed the property and One Source was the selling agent (buyers agent). Now ON THE MLS, and sdrealtor or some of the others here with MLS can double check for me, the sales price says 615. (That is pulling up the SOLD listing for this DETACHED home) Note that this is what the listing agent ENTERED on the MLS for this home, 615k. I think this is important to note.

Now I then pulled up the tax roll from realist (again from the MLS). This buyer used Wells Fargo to finance 492k on the first and 123k on the second. So here is our old 100% financing buddy. HOWEVER, as you noted, this tax roll DOES INDEED state a sales price of 698k.

Smells bad to me Carlsbad, very bad. This is just what Inile was referring to. No I cannot explain AT ALL what went on here. I have some ideas but none of them are good. I do want to stress the listing agent entered 615k as the sales price. I do believe something bad happened here.

sdrealtor, bugs or sda any thoughts?

SD Realtor

[forsale_2007]

The rule of thumb with common economics is if you can afford it then buy it. If you have to stretch to your last penny then reevaluate where you live and what your needs are.

 

If you are talking about buying your primary home, I couldn't agree with this more.  Regardless of whether you will lose some money or not, a lot of our purchases are in general not financially sound to begin with. For example, why buy say a a performance car when you can buy a Hyundai.Etc,etc.etc, knowing that almost all cars depreciate exponentially the moment you drive off the lot? Some do it for status (dumbest reason imho). Others do it because they can't stand driving an appliance that handles like a boat. What "price" you put on the intangibles is really a personal choice. So it really depends on if you can afford to purchase without overly stretching, your own tolerance for the intangible naggings, and your ability to live/weather if your home falls below what you paid for. On the other hand, if you're considering a home purchase as an investment, well I  personally wouldn't recommend this right now too.

 

Another thing, a lot of people are hoping for a 50-60% correction. I'm hoping for some sort of correction so that a home makes sense to be an investment again. But for me, I don't look forward to a 50-60% correction if it were to actually were to happen.I would guess that very few people would (1) have the financial means (2) be pysicologically fit to make a purchase at those levels. Humans tend to move in herds. If the sky is falling, most people will continue to think it will continue to fall. If housing is soo bad, and umemployment is so bad, and your neighbors are closing shop or losing their jobs left and right, would you have the stomach to make a big purchase at that time? What makes you think you would be in any different shape than those around you? And if you're planning to buy a home at the bottom, how's that different from trying to predict when the bottom will hit in say the stock market.  Few people will be ready when the bottom comes, most still won't buy.For example, when the stock market crashed after 9/11, I'd be curious how many folks got back into the market when things were near "bottom"…

 

 

[Carlsbadliving]

Which figure would realtors use for comps in the area. The 615k from MLS or the 698K from the assessment roll?

[Bugs]

There are a lot of games being played right now with sales concessions in the form of closing costs and cash back to buyer. The number of true bidding war situations that are occurring right now are few and far between.

Let’s say I’m appraising a property and I have a dozen sales to analyze as potential comparables. If 10 of the 12 show one trend and the 2 “overbids” with 100% financing at the overbid price show a different trend, to which trend do you think I give more weight? If for some reason I am compelled to use a sale that included such concessions I adjust that sale for the financing terms, so it ends up reflecting the prvailing trend anyway.

Let’s think about this logically. Why should there be ANY overbids in this market? Sales volumes are down by 15% compared to the same period last year and inventory is just about as high.

It’s not like there’s any shortage of listings out there; and in most areas (including Carlsbad and Encinitas) that includes foreclosures, short sale, and other “must-sell” listings. There might be a couple holdout pockets of move-up homes in Scripps or Poway where buyers think they need the schools, but in the end they still have to make those decisions against the backdrop of the economic conditions present in the region.

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