[SD Realtor]

I think the valuations you guys are making are not taking into account geographical locations. I believe that as prices continue to deteriorate, when they finally do bottom out there will still be variations due to desireability. I think certain areas will go below the 10x multiplier but others may still higher, in some cases irrationally higher. I believe one of the earlier posts to this thread estimated 492k for a home in La Jolla. I am sorry but in places like Birdrock and other parts of La Jolla I just don’t see that. Forgive me if I misquoted that earlier post.

Don’t get me wrong, as I am hoping for it cuz my wife would love to move to Birdrock. However I don’t see that happening due to the desireability factor.

[SD Realtor]

I am biased because I am a Realtor and I would use a Realtor….You also can get a better rebate on the commission (assuming you can get the Realtor to give it to you), right now the Zip Realty commission is nothing when you compare it to what you really can get.

Also many people think they get a break when they go out and use the listing agents realtor to represent thier side. This is most generally not the case. Also the most compliants I receive from people is when they bought a home using the listing agent as thier broker. They thought they got a better deal when in reality the common theme I got was that they felt they were not represented as well as they had been in the past when they had a true buyers agent.

Of course many people do not know they can represent themselves. They can deal straight with the sellers agent AND they can not have an agent represent them. They CAN instruct the sellers agent to tell the sellers client that they are self represented so that the buyers agent commission does not have to be paid out.

I know alot of you guys trivialize the duties of a Realtor and that is okay, I understand that.

Anyways that is my two cents, yes I am biased, I will say that right up front, but my buyers are all very pleased with my service AND they enjoyed the rebate I gave them. In most all transactions you do on your own, or with an internet Realtor, things will go fine and you will be okay.

[SD Realtor]

Be glad to give a bit more insight to the stats…Here is what I wrote:

“Now, 7 solds out of 45 properties that came off the market. Less then 1 in 6 3/2.5 condos in 92130 have sold. Again pretty horrible. That means that 5 out of 6 3/2.5 condos that have come off the market in 92130 since 6/1/06 were either expired, cancelled, or withdrawn.”

So what this means is that 5 out of 6 properties coming off of the market WERE NOT DUE TO BEING SOLD.

Simply stated this is PATHETIC and is indicative of a VERY POOR MARKET. This is not a story, this is a hard fact.

PS I am getting more and more convinced that days on market, DOM are becoming another false stat due to people relisting, cancelling, withdrawing and coming back on. So again, the best way I feel to get a sense of the market is as follows:

1 – months inventory
2 – number of sales compared to the same month last year
3 – actives/pendings ratio
4 – overall inventory level
5 – true solds compared to expireds, cancelleds, withdrawns

So basically I would not even use DOM.

[SD Realtor]

1) Both. I rent and I own 1 detached home and 2 condos.
2) Tried to sell the home in fall of 05 but didn’t get the price I wanted.
3) Inconclusive. In my opinion the peak varies by neighborhood. In Talmadge where my home is the peak was spring of 04.
4) My own analysis.
5) No… want to get closer to the beach.
6) No
7) I will buy when I think we are closer to the bottom. I need to see inventory level out, and the number of sales start to increase or at least stop decreasing.

[SD Realtor]

Hi ybc, I have 3 rentals all local here in SD so I do not use a prop manager. If I had out of town properties I DEFINITELY would recommend a manager. I believe the cut is anywhere from 6-10% rent. There may or may not be an up front expense as well. However a good property manager is golden. What type of places are best for rentals? I guess it depends on what you are looking for. It depends on your level of experience and your goals.

[SD Realtor]

brooke that is a good point. I do not quite agree with your characterization that the recent slowdown is relatively mild. I can point to a few zip codes that have already depreciated to 2004 pricing levels if you like. These are not stories they are facts.

At any rate all one with access to the MLS needs to do is simply pull up Lee Sterlings listings and compare his sales to expireds/cancelleds/withdrawns for 2005 verses 2006. In fact if this is done for ANY Realtor it will be evident that most all of us have many more expireds, cancelled, and withdrawns this year then in the past 10 years.

[SD Realtor]

ps tsk tsk tsk!! heheheheh

[SD Realtor]

rankandfile funny you mentioned reading up more on Mr. Sterlings work… I didn’t want to post it but I looked up Mr Sterlings sales, expireds, cancelled for 2005 verses 2006. I wish I could have given Rich that information prior to the show. They perfectly illustrate the slowdown.

[SD Realtor]

Wow this thread kind of bugs me as well. If people come to this country legally, pay thier taxes and adhere to our laws then I welcome them with open arms. I do feel that the stress on our economy due to illegal immigration does more damage then the benefits.

[SD Realtor]

Hi David –

I am not sure where to start. First off as you know everyone and EVERYTHING on this board is speculative. With that said, my friend Powayseller who is one of the more bearish posters, always backs her speculation up with really good arguments. Again though, all of our postings are simply speculations so don’t get to bummed out by them okay?

I am a Realtor and I would say that if you are happy where you live, and you like the schools, and you are not in an arm loan then I think you will do just fine. Some of use like Escondido and some of us don’t but don’t sweat it if people badmouth it compared to Del Mar or La Jolla.

My personal opinion, and it is VERY SPECULATIVE, is that the market will depreciate over the next 2 years at least. That depreciation rate will vary on a few things, first and foremost being a recession that can be as light as a simple slowdown or decelleration of the economy or a heavier one due to loss of lost of jobs. I think it will be middle of the road, many others think it will be heavier. Anyways I believe the current pricing has already depreciate by at least 5-10% in Escondido and will continue. I personally think you can get a better deal if you wait a year or two.

With that said, buying now, if it makes you happy is okay. I think that in 5 years you “could” see that 10-15% appreciation you are seeking. However, what makes me uncomfortable is that you “could” just as well be underwater at that time.

Yes San Diego is the best place on Earth (IMO) yet it is the 6th least affordable place to buy a home. Also note you are buying a home at a time where we have more inventory then we have had in years. This point is not speculative, it is fact. You are also buying at a time when prices are depreciating, market times are lengthening, and cancelled and expirations are increasing. This is not speculative either. Finally NODs and Foreclosures are also increasing. This is not speculative.

So with that said, I think again, you would be better served financially to buy when these indicators start to level out.

If you have not past your contingency period you can exit without loss of deposit.

However, if you are gonna be there several years, you will be okay in the long run. Hang in there and if you need any advice, please don’t be afraid to post.

[SD Realtor]

I didn’t get to see it as well. I am still wondering if the guy that Rich was debating against was the same Lee Sterling who owns the Carlsbad HUS Franchise.

Here is a link to Lee’s picture.

http://www3.helpusell.com/RealtyWest/listings/ListingAgents.aspx

If it is that Lee Sterling then he is a formidable opponent who is armed with a career of legal experience (and he is tough to debate agains) and who is quite savy (and he is a very nice guy) so Rich had his hands full.

I think perhaps what would help Rich next time, if there is a next time would be for him to come armed with some stats that are straight from the MLS. It is one thing to say buyer psychology is different but it is another to say here Lee, tell me why only 1 out of 18 condos in 92130 is pending. Again, I didn’t watch it but it is ALL TO EASY to pull up MLS stats right now that indicate a much harsher reality then is currently being portratyed by pundits.

[SD Realtor]

I guess I look at it like this…

If I could buy a rental right now that almost breaks even… and by most all accounts rents dont go down…then why not park my cash (that 20% down) in a CD for a year or two, and then buy that same condo, that in all likelihood will depreciate, and I will do much better then breaking even?

Also sdsundevil I have already seen depreciation in many zip codes that exceeds 10% of thier highs just 2 years ago. In other zip codes for attached housing I have seen even more substantial numbers. If you want check out 1 or 2 bedroom condos in Mission Valley, UTC or San Carlos. So I think that your correction of 20% over 5 years does not correlate with the data I have seen. The simple statement by sdrealtor that he is seeing reasonable pricing now that is approaching the break even point in and of itself supports a substantial depreciation that has ALREADY occurred in the attached housing market for certain zip codes.

[SD Realtor]

Couple of points… PS and others who don’t have cable. These shows are very entertaining. I think that they do a disservice by not displaying the outcome and I also believe they are not portraying the amount of time and effort it takes to successfully rehab a home. Again though they are very entertaining.

I think inhibiting free markets is not in the best interest of our country. I think that if people are smart enough to take advantage of market conditions, INDEPENDENT of what that market is, then more power to them. Lots of money was made in speculation and now lots is being lost. Good for the winners and tough luck for the losers. Why do you guys want to restrict others who did well. Personally I am jealous and envious. I wish I would have taken the risks to buy a few homes in 2001 and spin them but I didn’t. So if banana’s shot up to 5 bucks a pound would we limit people who speculated on them? Would we say that nobody can buy more then 6 bananas a week or prove you have a large monkey at home to justify that consumption? That no you cannot buy 200 bananas now just to sell them at 6 bucks a pound next week. We need to make sure everyone can buy bananas. (I know this is a ridiculous analogy)

Don’t we have an entire stock market and futures system that is based on speculation?

I am sorry but I don’t buy into the morality issue because I don’t see it? Perhaps many people who were priced out of the market are VERY HAPPY that they didn’t buy now. Perhaps they could have relocated to a cheaper area as well. Perhaps they simply could have saved more money and continued to rent.

I think that limiting opportunity based on a “moral” issue does not work in a free market economy in the long run. Intelligence, and patience, and not buying something you simply cannot afford are what will ultimately work out for you.

[SD Realtor]

Hi dalisk – I will try to address your questions…BTW this is SD Realtor not sdrealtor.

First off – You can verify the source of the buyers agents coming by through calling them directly and asking them. Most of them should have left cards. Simply call and ask. Unfortunately many of them may not remember so you may want to do that as soon as they come by. Altenately you can have a sign in sheet so that Realtors actually sign in when they show your home and leave thier contact information. That way you can call them if they do not leave a card. Also you can have a column that asks how they heard about your home. This will help you identify the sources of contacts. Finally if your home is on lockbox, your realtor can send you every agent that has entered your home (via lockbox) as the lockbox records when an agent uses it. Again, once you have that information you can do the legwork to check out what advertising means has been most effective.

In this slow market my personal advice to you is to try anything. Nothing is “crazy” in a slow market. Personally I have found that the MLS is best as it also will be farmed out to all internet MLS providers such as realtor.com and the others. If you are employing a full service realtor make sure they are having brokers tours for your home. IMO open houses provide more buyers leads for agents then buyers for your house. However I encourage my clients to hold them. All it takes is one buyer to hook. Again though, I don’t find them particularly useful but in this market TRY ANYTHING.

If I were you this is what I would ask my agent to send…

1 – A listing of all active and pending condos that are comparable to yours. Cover a decent sized radius, perhaps even your zip code as a who.

2 – Grab all of the solds, expireds and cancelleds as well that have come off the market since June 1.

3 – Take a look at the ratio or pendings to solds.

4 – Take a look at the ratio of what sold verses what fell off the market.

Here is an example. Lets take 3 bedroom 2.5 bath condos in Carmel Valley. Currently there are 52 Actives and 3 Pendings. The price ranges for the actives are (loosely stated 489k for the cheapest listing low end and 695k for the most expensive on the high end) Also the 3 pendings are at 499k, 509k and 529k respectively)…

Now looking at more information…Since 6/1/06, 45 properties have come off the market in the entire zip code. 7 of them were solds, 15 were expireds, 16 were cancelleds, and 7 were withdrawn.

Okay lets analyze the data. 3 pendings, 52 actives… NOT GOOD. Less then 1 out of 18 3/2.5 condos for sale actually make to escrow presently. Of those that made it to escrow nothing is listed over 529k.

Now, 7 solds out of 45 properties that came off the market. Less then 1 in 6 3/2.5 condos in 92130 have sold. Again pretty horrible. That means that 5 out of 6 3/2.5 condos that have come off the market in 92130 since 6/1/06 were either expired, cancelled, or withdrawn.

************

Besides illustrating how bad the market really is, (at least for 3/2.5 condos in 92130) this is ALL data your Realtor can provide for you in order to help you price your home.

To be quite honest with you, this is well beyond days on market, and trying to find basic correlations. I am an engineer and a Realtor and I crunch numbers and search for correlations more then most Realtors in this business. However I firmly believe that we are entering a spot where you cannot find accurate linear correlations because of market psychology. Unless you can clearly demonstrate exceptional VALUE in your pricing, then you are going to rely on Lady Luck. I am not saying you won’t sell your condo by taking small nibbles downward, AKA chasing the market. However I am advising my clients to really think about exceptionally aggressive pricing. Not beating your neighbors by 2-3% but beating them by 5-10% or more.

With that said THERE IS NO PRICE THAT GAURANTEES A SALE. I wish there was. You may find that slashing it still may not do the trick. Again, the real estate market is a slave to momentum.

Now you may find that you cannot tolerate the sort of slashing that I am referring to. That it may be more prudent to simply hold on to your home and perhaps rent it out. Also there are seasonal components in all RE trends so we will see more sales activity in the spring. We will also see more inventory. I think this spring will be perhaps one of the most important springs of all for SD Real Estate. I am bearish, probably middle of the road bearish compared to some of the others here.

Also for a quick months of inventory calculation simply do the following. Take the total number of solds for the past 6 months. Divide by 6. That gives you a monthly average. Then take the total actives on the market today. Divide that by the monthly average. Make sure you use YOUR PROPERTY TYPE in YOUR REGION.

Example – Say in your zip, your housing type, there were 36 homes sold in the past 6 months, that is 36/6 or 6/month. Then there are currently 54 actives. So that means there are 54/6 = 9 months of inventory. Out there.

I will say however that in this declining market this calculation is simplistic and does not represent the shift in psychology from just 6 months ago.

I do not believe that chasing the market is effective. I believe you should gather all you can about the resale pricing in your area, the conversion pricing, and the new development pricing. Beat them all or be able to effectively prove why your home is the best deal. If you are paying a full service brokerage 2.5-3% to list your home make sure they are doing all your open houses, sending our direct mailers, running newspaper ads, doing brokers tours, and everything short of spinning a sign on your corner. Make sure your Realtor is constantly updating you with your competition. When a comp in your area changes prices, goes into escrow, or drops off the market you should be informed.

Be proactive.

[SD Realtor]

burger that is hilarious!!

[Author]

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