Weekly Review January 30

Week In Review January 30, 2009

 

Jean and I are on the Garden Island of Kauai, but work goes on – in fact we are here looking for land for a client. It’s just work, work work!

 

(I can feel that I am not getting a lot of sympathy!)

 

The market continues in the 92026 Zip Code with 28 homes coming on the market and 27 homes going into Pending during the past seven days.

 

Two of the new listings were in Hidden Meadows. One of the Pendings were in Hidden Meadows, but three of the new Pendings in the ZIP Code were above $400,000 – one above $600,000. (One of the Pendings was in the Meadows  and it was above $460,000.)

 

I still believe the Spring will show a turnaround above $400,000.

 

There were 13 Closed Escrows in the Zip Code, and one in Hidden Meadows. A  home on Faircrest closed at $491,000.

 

I’ll try to do better next week at keeping you better informed on Hidden Meadows. Of course on a day to day basis I am studying land and homes on Kauai with my Kauai associate Broker, so if you have any interest in Kauai, please let me know.

 

This is our 23rd visit to Kauai so we can concentrate on real estate. We have done everything three times on this island so we can concentrate this time on work.

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Week in Review


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In the past week, there were 31 new listings in the Zip Code 92026, and three of those were in Hidden Meadows. Two were low-cost (one of them vacant), and one nice home on High Vista.

Please. PLEASE someone – buy the listed home on Royal Rim, now down to $584,900! That is a dead steal! There were many good price reductions, 29 in the Zip, but the Royal Rim just jumps off the page.

Three homes in Hidden Meadows went into Pending, two on Oak Ranch and one on Meadow Glen Way East, of the 22 in the Zip Code that went into Pending.

One home closed in Hidden Meadows, and it closed $16,000 more than the listing price. Experience tells me that that happens most often when there are multiple offers on a listed home.

There are many indications that sales are increasing, but prices are still decreasing at a smaller rate.

I anticipate a good Spring, but not a great Spring.

Housing Stimulus


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Let me propose a housing stimulus plan. I believe that the proximate cause of the economic downturn was the housing market bubble, and regardless who was at fault that segment of the economy needs a boost.

The reason it needs a boost has less to do with any accompanying industry (real estate, construction, lending) than it does with basic economic confidence – people’s wealth is largely in their homes, and when that wealth diminishes they delay spending.

IF that analysis is correct, the natural demographic cycle needs to be jump-started. The government should buy terribly distressed homes in, for example but not limited to Detroit where homes go for as low as $10,000, as a supply of low-income homes.

(This plan does not address foreclosed homes, or short-sale homes because those Sellers have no ability to purchase other homes. It is designed to boost sales among those who can, and wish to sell and buy elsewhere but in this market have no hope for a sale to start the process. There are many.)

Those sales should be dependent upon the Sellers purchase of another home anywhere in the United States, with escrows to close simultaneously. At some point, the plan will generate movement in the market and once the market starts it is self0sustaining, hopefully without the market distortions that brought about our housing crash.

I understand the objection will be that it will continue to concentrate the low-income people into low-income neighborhoods in low-income areas, but mine is an economic stimulus plan, not a social engineering plan.

“Nobody gets it if there ain’t any!”

MLS Update for January 20

The past 72 hours have not been as busy as have recent 72 hour periods. One new listing on Meadow Mesa, a 4 BR/2BA, 2,211 square foot home on 2.57 acres for $693,900. That was one of the 10 homes listed in the Zip Code in the past 72 hours.

 

There were 10 price changes in the Zip, but none of which were in the Meadows. There were also 10 homes that went into Pending, but none in the Meadows.

 

And one home closed escrow AND IT WAS IN THE MEADOWS. A 1950 square foot home at 10842 Meadow Glen Way East across the street from me closed for $415,000.

Weekly Analysis

Weekly Analysis

 

This past week there were 34 new listings in Zip Code 92026, and seven of those were in Hidden Meadows – but most of those were re-registration of old listings that had been listed and taken off for the Christmas Holidays.

 

There have been 20 price changes in the zip Code, and at least one deserves comment because I had no idea:

 

A 21, 171 square foot home (who knew?) in the Circle R area of the Zip Code has had a price change from $14,900,000 to a variable price of $13,900,000 to $15,900,000. Now I don’t think anyone on my e-mail list is really in that price range, but I just thought is was interesting. (It has been on the market for 83 days, but to be honest I don’t track that price range very often. I might have, had I known it was there!)

 

Just for information, that home has 30 bedrooms, 9 full baths, 9 half baths….you get the picture.

 

There were 20 homes in the Zip Code that went into Pending, including THREE  on the Meadows in the past week! That is big news, and we do not know the final price until they close, but three in a week is BIG! Homes on Oak Ranch Lane, Oak Spur and Mountain Meadow Road – all of them below $400,000, went into Pending.

 

Ten homes closed escrow in the Zip but none were in The Meadows.

 

Weekly Analysis

This is the first time in a LONG time that the listings fit on a single page but that is a bit misleading. Many homes were taken off the list for the Christmas Holidays and some in the normal range may be so discouraged that they do not come back on the list.

 

That does not mean they are still not for sale.  If you pick a local Realtor who works and lives in Hidden meadows they can sort it out for you. Some of them really know the territory.

 

But the list reduction does not mean that there is not activity. In this 92026 Zip Code just in the past week, 20 homes were listed and 20 homes went into escrow. Sixteen homes closed escrow.

 

Admittedly, of the 20 homes that went into escrow, 18 of them were below $500,000 – so it is still the investor market that is the most active.

 

The 16 homes that actually closed escrow were all below $425,000 and this closed category actually included one home – the 3,000+ s.f. home on Moon View which closed at $400,000. That is a nice house and it was a steal at that price.

 

One of the homes I consider a steal at this time is the home at 28950 Royal Rim, but there are others also – the one at 9779 Crystal Ridge is terrific at $799, 999 comes to mind – it is in Rimrock and 5,600 s.f.  That works out to $143/s.f.)

 

The current interest rate is hovering between 4.5% and 5% and may even go lower to induce interest in the “move-up market.” The building industry is lobbying Washington for bailout money to reduce the interest more toward the 3% level, but that is unlikely.

 

The real estate market is essentially constipated – people cannot buy a new home regardless of their interest if they can’t sell their existing home. In a national market where our impetus is often initiated in Milwaukee just after a high-snow winter, we need the homes to start to sell in Milwaukee!

 

Since the entire home market is in the doldrums, with pockets of absolute horror like La Vegas.  Low interest rates, alone, will not move this market and when the market does move it will take many years to boot-strap the market back to normal.

 

If the government insists on bailouts, it should do a targeting effort to purchase existing but specific homes in low-income neighborhoods belonging to people who can afford to move up.  Their sale would result in the subsequent purchase of homes whose owners intend to move up also.

 

Once the flow starts, it is self-sustaining.