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sdrealtor
ParticipantActually there seems to be a flight to quality going on now. Seller’s are recognizing the value of an experienced strong agent and more of the listings seem to be going that way. As for my listings, some are selling quickly and some are taking longer. I am very picky and strongly encourage my buyer’s to buy homes with the thought they will be selling it one day. I look for what I call great real estate (big yards, privacy, nice floor plans, views, location, no power lines or busy roads etc.) The last home I listed for a former buyer client sold in less than one week about a month ago for a record price. SD is a wonderful place and great homes will always sell and they will sell faster and for more. If the markets declining that is particularly important because the sooner you can get your house in escrow the better.
I am on pace to make more this year. I have only had one listing not sell within 120 days in my career. It happened one year and I got the seller a great all cash offer on a tough to sell property the first week. I found the investor at a networking meeting I was at. I begged the seller to take it and he was very obstinant. After 90 days of trying we mutually agreed to part ways and he went FSBO. One year later, he is is still trying and his asking price is 25K below what he could have had even after paying commissions. He now has about 15 identical units to compete with none of which are selling.
ParticipantI know Bressi ranch fairly well. I don’t beleive a house in the Wisteria Place neighborhood (the cheapest one there) ever sold in the 800’s. The way Bressi Ranch is laid out with different neighborhoods at different price points often sharing the same street name this might be a cause for some confusion. If you are Zillowing, you are getting bad information because it is only looking at sq footage and room counts. That’s what is probably going on but who knows.
Zillow is pretty useless from my experience. My house shows up on Zillow at 775K when the same model across the street without upgrades or a huge yard like mine sold in the high 800’s 1 year ago. The funniest thing is when I make Zillow adjustments adding a bedroom and 250 sq ft because the tax records Zillow uses are wrong my home goes down in value over 50K.
With that said, there are some relatively great deals going on in Bressi Ranch and it has pretty much crippled resales in the Rancho Carrillo neighborhood next. I know they are doing alot of discounting there and throwing alot of upgrades around. Personally I kind of like the feel of Bressi ranch but there is too much air traffic overhead for me.
ParticipantI’ve never been busier! Most of my business now comes from referrals and past clients. Have a handful of listings that are nice properties and fairly priced by seller’s leaving the area or moving up/down. They are well prepared for what’s coming. The one’s leaving the area are going cheaper places and will do fine. The one’s staying will have well marketed properties that sell well in today’s market and I’ll make sure they buy even better. If your staying it doesnt much matter because what you have will rise or fall just like what you are buying. They know better than to try to time the market and are fine riding out whatever comes their way. I have several buyer’s I have been working with over a year that really want to be here but I’ve been encouraging them to wait until the tide shifts. They’ll probably be buying in Late Summer/Fall (when more sellers will have no choice but to get real) so they can beat the prospect of another brutal Winter. They are coming from other desirable places and can afford to live here (i.e. cash or mostly cash buyers). I also have some young highly paid professionals that are renting but really want to move on with their lives. We’ll take our time to find exactly what they want and will only buy if we can negotiate what I consider next years prices. BTW, I am not an elitist and my favorite clients (a public utlity worker and his waitress wife who bought an ocean view home 4 years ago from me for about $275,000 in what has become an up and coming area) are the ones who depended upon me most and who I have had the most profound impact upon. However, I’d have a hard time selling them a home today if the situation presented itself.
With alot of education I know better than most and carry the burden of knowing better. I pretty much have called every move of the market 3 to 6 months in advance over the last four years. I never have and never will knowingly sell someone into a situation that will destroy their life. It allows me to sleep well at nite (as long as the kids arent crying over the monitor).
As far as the mortgage goes, my wife left the work force 3 years ago from a well paying career. She recently went back to work 2 days a week and makes more than half what we need to survive. It also gives her a much needed break from being a full time mom.
Most of the people I work with have been around much longer than me and are well positioned to ride out yet another cycle. As for the newbies…..good riddance to most of them. I’ve met alot that I wouldnt trust to clean my house. I fully expect at least 1/3 of the realtors/mortage brokers etc. to be gone from the business by the end of 2007. The ones that remain will be the ones that understand how to get things done. People will allows want to move to SD and those that live here will need to move as their lives change. SD is more transient than most places in nature and will always be a relatively active real estate market.
ParticipantThe data isnt perfect is a huge understatement! It is inherently flawed to a significant degree.
Saws and straps to hold patients down were “the best tools available” to surgeons in the 18th Century. Try as you might to crunch numbers, the best information on what is going on will always come from an honest, ethical, well-educated Realtor who understands the local market. Beleive it or not there are a few of us out here.
I can speak the truth without fear of bringing the market down because I have no stake in it. My mortgage is affordable and will always be. I don’t care whether prices go up or down because I’m not going anywhere for at least 20 years. I represent my clients best interests to the best of my abilities every time as if I were representing my mother. If I can’t earn a living doing so, I’ll suck it up and go back to the corporate world to make at least 50% more than I make now.
ParticipantHave to disagree on that one Rich as I have my feet on the street as well as my hands on a keyboard unlike you. I’m watching homes that sold in Spring 2004 come back on the market now after 2 years and the same exact house is selling for less in many cases. When I think of homes that I listed and sold in Spring/Summer 2004, I cant think of one that would sell for more today. I know there are always exceptions, but most homes that sold in the peak of the frenzy (Feb 2004 through June 2004) would have a hard time selling for the same price today.
ParticipantI wouldnt say the MLS isnt concerned with giving accurate data. A more accurate statement would be that the MLS is incapable of giving accurate data because it would be extraordinarily difficult to compile accurate summary statistics.
ParticipantGood analogy! If you try to apply pure economic and financial concepts to understand home prices….you never will. This is a good site with one major fundamental flaw. Rich says “In God We Trust. Everyone Else Bring Data”. The data sucks! There is no such thing as good data in home sales because there is no consistency in reporting or data collection. We are also comparing a constantly changing asset. One of the major reasons the median has been rising the last two years is that larger/newer homes are now in the mix of resales. There was very little building between 1985 and 1997. Since 1997 there has been a building boom of newer larger homes. What we are seeing in the stats is different (i.e. more newer and larger)homes selling not increasing prices. make no mistake about. Home prices peaked in April/May of 2004. The data also includes top producing high volume agents refreshing their listings every 45 to 60 days. Average market times if you add the previous failed listings are probably closer to 80 days not the 55 to 60 days you see quoted. These are just a few of the many problems with the data.
ParticipantThe “safe and secure comment” was anything but condescending. If you can rent the same home for 20 years and have your children grow up on the same street with same neighbors you’ve accomplished the same thing. It’s just a little harder to do when you dont own the house.
Emotions and pride prevent people from making good decisions. When buying a good decision is not to over pay or get yourself in over your head. When selling in a declining market a good decision is to take your lumps now and get out before it gets worse. Most will hold on as long as they can whne they shouldnt. A good percentage will find a way to maintain the outward appearance of their diginity and will survive the bumpy ride. Of course, some will fail also.
Have you never fallen in love with a stock and not sold when you knew you should have?
ParticipantSenior Moment,
My 3 month supply stats are for the entire MLS which encompasses SD County. As for Downtown, ITS A MESS! Inventory is now over 600. Unlike tract builders who can build in phases (10 homes at a time), high rise builders have the whole enchillada to release at essentially the same time. All bets are off downtown particularly with all the speculation there which is extraordinarily higher than anywhere else in SD County. The one thing I will say about downtown is that I was very pleasantly suprised when I spent a night down there two weeks ago. Hadn’t been there for more than a few hours (ballgame with my 6 year old or Stones Concert with the wife) in many years. In the early/mid 90’s before kids I wanted to live at the beach. If I was a young professional today, there is nowhere I would rather live than downtown. It has gotten very hip!ParticipantPoway Seller,
I just went back to 2000 to check what was selling for 300 to 330 in a good area like Encinitas/South Carlsbad/RB/Scripps Ranch etc. Around March that year you could get a 3BR/2BA 1500 sq ft single story home built in the 70’s. That is what we refer to as entry level detached housing in SD. Those same homes are selling for roughly double today which doesnt make sense to me. In mid 2003, they were selling for 450 to 500 which does make sense to me. A young couple moving up from a condo with a little equity and good jobs (lets say combined income of $125 to $150)would be able to put 10% down (I think thats doable for most people like that) and could get a 30 yr fixed rate mortgage of about 2500/month. Add 600 for taxes and insurance and their paying $3100 PITI which after tax in their bracket is like $2000 in rent. They would have a nice home in a nice area to live in for the next 5 to 10 years. As for $450K being high end in 2000, I’d disagree. It’s what I would equate to Upper Middle class. High end homes today start around $1.2M and were around $600K in 2000.ParticipantSpeaker,
Your comments are more than a bit smarmy and you seem a bit uniformed as to how to interpret real estate stats so here’s a primer. A decrease in inventory by 9 doesn’t mean 9 homes have sold since Halloween, it means there are 9 less homes for sale now than before. Hundreds of homes have sold since Halloween. The homes on the market now are not the same that were on in Fall in most cases. With 521 active listings and 168 pending listings, we have a 3 MONTH supply. By definition, a buyer’s market is a 6 month supply. In the MLS there are 10,660 active single family home listings and 3769 pending listings as we speak.. Also about 3 months. These are real live numbers! Are we in a soft market? absolutely! But with 3 months inventory a dramatic “hard and fast” crash just doesnt seem likely to me.As for prices equating to rents, that ignores alot of the benefits of home ownership. I can paint my house any color I want, I can plant what I want in my yard, my children feel safe and secure in their home and it is a large part of their identity and the secure feeling they hold in their hearts. When you rent you own nothing. When you own, you get to experience the pride of ownership. None of this justifies paying double to triple what you could rent something for, but it certainly justifies paying considerably more than rent. There’s also the tremendous tax deduction I get each year which makes my $3000 PITI (mortgage payment, taxes and insurance) feel like $1800 in rent. I could go on and on but I think you get the point.
As for why it goes up faster and down slower…the answer is EMOTIONS! Emotional buyer’s chasing their dream of homeownership will raise the bid quickly because “it’s just a few more bucks each month”. Emotional seller’s will resist taking less because “I love my home”, “my house is worth as much as the one across the street that sold last Fall” and “It’s my chance for a big payoff and every $10,000 less I take comes out of my payday in 30 days!”
Emotions working in opposite directions make prices rise much faster
ParticipantIn 1999, I was still working in High Tech sales/marketing (and getting very tired of life on airplanes). Working in RE has allowed me to watch my young children grow albeit at much lower earnings. Mine was a lifestyle choice and while I am consistently in the 10% of Realtors production wise, I could make more money working in my old career.
In 1999 my new house cost around $450K and was cheap in spite of an 8.5% fixed rate mortgage (I’m a conservative 30 yr guy).
In late 2003, it was about $650K and with interest rates in the mid to low 6’s it was affordable too. Just about anyone that had a good job and lived here more than a year or two had $100K to 200K to put down 20% and buy a house like mine.
In Feb 2004, my house went to $825K and stopped making sense from my perspective. Since then its gone up to about $925K.
If prices went up about 5% a year from late 2003 it would be in the mid 700’s which would make sense to me. Someone whose been here for several years would be able to move up to buy my home (5Br/3Ba 2800 sq ft in very nice master planned community with great schools which is likely their 2nd or 3rd home like it was for me) with 20 to 30% down. With a loan between 500 and 600K the payment would be around 3000 to 3500 which isnt too much for a household income of 150K to 200K. Homes like mine rent for around that very easily.
I know this back of the envelope type logic…but it makes sense to me intuitively.
To answer your other questions. The real inventory spike happened between July and October last year. I’d venture to guess North county Coastal isnt all that different from other areas with the possible exception of Downtown. As for what I attribute the price decreases to….the insanity has ended and we are headed back to a more normalized level which i beleive we should be at (mid 2003 pricing plus 10 to 15%). As for credit tightening, I dont see many 100% buyers anymore. Sales volume is down but the quality/qualifications of those that are buying is substantially higher on average than b4.
ParticipantNever said it’s different this time. Around the end of 2003 prices still made sense to me re: mortgage payments and incomes for most of the people I knew. At the beginning of 2004, everything seemed to jump $100K to 150K almost overnite. It didnt make sense then (I said so) and it doesnt make sense now.
As for buyer’s being ARMed, while there are quite a few in that situation there are alot more that rolled equity in move ups from what I saw personally. Here’s what’s going on in my area:
I track inventory every Monday in my submarkets when I get back from lunch and have data going back 2 years. Not sure what’s going on anywhere else but in the North County Coastal Area of San Diego where I work detached inventory was 530 homes on Halloween and now stands at 521 homes. Pendings homes sales are down from 173 to 168. Attached Inventory has risen from 294 to 312 and pending attahced sales have risen from 68 to 73. Dettached prices feel like they are around 5% lower versus Fall (10% lower for attached) but we haven’t seen any dramatic Crash here yet. Still lots of homes being bought and sold every day. One thing we are definitely seeing less of are the zero down toxic loan buyers. Nothing controversial here…just reporting the facts.
Does that look like hard and fast you? I think its coming down but disagree on the hard and fast. I think its gonna be more like slow and painful.
ParticipantRich,
Let me begin by saying I have firmly been bearish on RE prices since late 2003. While there is no hard data this is what I have see anecdotally.Demographic Change
Lots of high income people moving to the area who work from home and/or renting office suites. This wont show up in any booming new business or local hiring. Older long time retirees with most of their assets in their homes cashing out and moving to cheaper locales. Wealthier retirees with substantial assets replacing them. Net effect is retiree population stays flat while the composition changes.Changes to SD
Rich, you really need to get out more. I just spent a nite at the Westin Horton Plaza to get away from the kiddies for a night and was astounded at how the city has changed. The very cosmopolitan city I found was a far cry from the ghost town I caroused during pub crawls in the mid-90’s before getting hitched. Drive around Carlsbad/Encinitas where I moved in 1997 and It is unrecognizable today. Good Restaurants back then were Taco Shops and a good dinner required a drive south to Del Mar or Downtown. Not any more! I grew up back east and SD might have well been on Mars when i told my friends I was moving out here in 1992. Now every one in the USA know what SD is about!Not that this justifies the price spikes we’ve seen but they certainly are a major factor in rising prices and shouldnt be discounted. As you know, RE is sold on the margin and while every house on my street couldnt sell for close to a $1M, one or two a year can. For the record, I think prices will return to 2003 levels and then settle there for a few years.
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