Thanksgiving Week in Review

Only one new listing in the Meadows this past week, and no homes went into Pending or Closed Escrow.

 

The Zip Code was busy with 20 new listings, four Pendings and 14 Closed Escrow. As usual it was the low-cost homes that investors were selecting. The most expensive home sold in the Zip was $559,000, and everything else was below $395,000.

 

The inventory in The Meadows has dropped to 49 homes, as fewer homes get re-listed  That does not mean that more homes would not be sold with an offer, so if you tell your local Realtor what it is you want they can find it among either the active homes, or a withdrawn or expired listing.

 

Whatever you pay for a home today will be passed on the way up as the market recovers next year, or at the latest the year after. The problem with all markets is that they overreact on the way up and on the way down.

 

This market has gone too far down. It will not stay there.

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Analysis

I am continually amazed that the press reports the housing market without ever putting anything into perspective. Right now they are reporting that sales are up nationally, by 127% over the same month last year, but that prices continue to fall.

 

Ahhh, yes and no. Yes, sales are solid but the distribution of those sales is terribly skewed and so reporting median sales prices is less than meaningless – it is misleading.

 

Suppose an area, like a city or a state has a normal distribution of homes ranging from apartments, small condos, cheap homes, middle class homes, upper middle class homes, and estates.

 

In a normal month suppose 30 cheap homes sell, 50 middle and upper-middle class homes sell, and 5 estate homes sell. The “Median sales price” falls somewhere in the middle class homes, perhaps even at the bottom of the upper-middle class homes.

 

Now suppose that we have a market where, as it happens today, 40 cheap homes sell and 25 of them are bank owned and in distressed sales; two middle class homes sell; and no luxury or estates sale.

 

Guess what? The “median sales price” will be very low, because none of the homes that would normally make up a normal distribution are not selling. When the only sales being reported are distressed sales, the “median sales price” will be a distressed price!

 

Casual observers who hear the numbers and do not understand the situation, or are the result of our failed educational system and simply do not have the intellectual capacity to understand even if it is analyzed, cause a lack of confidence and a continuing lower market.

November 26 MLS Update

No results at all in The Meadows over the past 24 hours, although the Zip Code was busy.

 

In the Zip there were 11 new listings, 11 price changes, three Pendings and 11 closings That is a busy day and continues the “solid” market that exists below $400,000. Indeed all of the 11 closings, closed below $340,000.

MLS Update 25 November

Two new listings in the Meadows, one on Spruce Woodlands, 2,912 s.f. built in 2004 for $485,000; and a one on Mountain Meadow Rd., 2,912 s.f.  for $760,000 – to $820,000.

 

That was about it in The Meadows, but there was activity in the 92026 Zip Code. There were nine new listings (plus the two in the Meadows);  11 price changes, four Pending and six closed escrow.

Price Reduction on a Beautiful Home

Tomorrow I am reducing my Valley Center listing to $829,000, and there is a little give in that price even though it includes $10,000 in moving/closing costs. The Virtual Tour in on the opening page of my website www.allenhemphill.com

 

 

While I know that most readers use this Blog for Hidden Meadows, this is a spectacular home – single-story, 3,557 square feet on 2.29 relatively flat acres with spectacular views and is an absolutely pristine property.

 

Everything is done exquisitely with taste, and no expense was spared because the owners intended to live there forever – until they were made a business offer they could not refuse.

 

The home looks down on Pauma Valley, and up at Palomar Mountain.

 

I’ll tell you how good it is – my wife, Jean, says she could easily live there.

 

She has not said that about five homes in the 31 years we have been in real estate.

Potentially Useful Information

Most people do not know that a California homeowner may take Prop. 13 tax with them more than once — although there are few of us under the original Prop. 13 tax rate.

 

If you have a doctors written directive to move closer to a hospital, or from a two0story home to a one-story home, and you have already taken your Prop. 13 status with you once, you may apply to get it a second time.

 

Fewer and fewer people are able to take that advantage, but if a senior needs it, call the County Assessor’s Office.

 

I was a debater FOR Prop. 13 back in the 70s, and I never knew of this provision until I called the Assessor’s office for a client a decade ago and the phone was answered by a person who processes these claims.

The Week in Review

The number of listed homes continues to decrease as Sellers become discouraged and withdraw their homes from the market. In the Meadows, we are down to 52 from a high this last summer of 80,.

 

The total activity in all categories (Listings, Pending and Sales) has slowed as the Holidays approach, and that will be followed by cold weather, which is not normally a good season for selling.

 

But, from my experience, this market would have already turned around without the perfect storm of a frenetic general economy and an approaching holiday/cold season.

 

Hopefully, the hiatus in foreclosures by Freddie and Fannie until January 20 will permit the investors to diminish the current inventory of foreclosed, investment-level homes (below $350,000).

 

While it is unlikely that the economy will recover in the Spring because the problems are systemic, the housing market can stabilize if the general economy has even a hint of breaking light as early as April.