August 11, Weekly Analysis

August 11, Weekly Analysis

Two new listings this past week in The Meadows, and they are displayed with yellow highlight on the list.

Only one Meadows home went into Pending: 28042 Glenmeade Way, a 3/3 of 2,159 s.f. which had been listed at $474,999.

No homes Closed Escrow this week in Hidden Meadows.

Our inventory is stable again this week, but again weighted heavily in favor of the large lot properties, and again we have no listings under $425,000 as the lower-priced properties have sold.

The activity on the large lot properties is high, but the accepted offers are sparse. Most of the potential Buyers express the opinion that the large lot properties do not include many bargains, and bargains are what the current crop of buyers is looking for.

The lenders are reporting that nationally the rate of foreclosures has increased every month over the past three months, but that the rate of foreclosures is still less than the same period last year. Nevertheless, the shadow inventory of foreclosures is very high. The lenders are at least releasing their foreclosures at a sufficiently slow pace as to keep the prices stable.

There are too many unknowns in the overall economy to feel good about the real estate market, which historically returns after the economy picks up. Gas prices, drought in the center of the nation, and the teetering European economy (which represents 25% of our exports) all mitigate against a rapid economic return, and ultimately against a rapid real estate recovery.

We in Hidden Meadows had a great sales Summer, at least below $500,000, and now activity in the above $500,000 market shows the potential for life as well. The market below $500,000 has seen multiple offers appear in some sectors of North County, as investors have been very active in that market, and cash sales are not uncommon.

The Executive and Luxury market has seen a few expensive properties sell, but nothing approaching the activity of the lower-priced properties. The owners of Executive and Luxury homes have seen nothing like the traffic seen by the smaller lot properties. In the upper level an Open House seldom brings two or three potential buyers a day, and even offers made are much lower than the asking prices.

But traffic is still good, and offers continue to be made in the Executive and Luxury homes as potential buyers seek bargains.

August 5, Weekly Analysis

August 5, Weekly Analysis

Two new listings this week, and they are color coded with yellow on the list – although one was listed apparently 18 days ago and just showed up on the list.

Some people have asked if my listings were the ones in yellow, so this week I placed my listings color coded in green. Yellow has always denoted the homes appearing on the list for the first time.

One home went into Pending this past week (by our office): 28136 Glenmeade Way, a 3/3 of 3,048 s.f. which had been listed at $359,000 — $419,000.

One home closed escrow: 27253 Mountain Meadow Rd, a 3/3 of 3,100 s.f. (on 39.87 acres!) closed escrow at $1,800,000.

You will note that we still have very few listing that are not on large lots, because almost all of the smaller properties have gone into Pending or have Sold. The competition for those smaller homes on smaller lots has been the hallmark of the Summer months in The Meadows.

While we do not know the population of potential Buyers at any given moment, the Summer sales were spectacular in the $300,000 — $450,000 range. There is every reason to believe that there are still unfulfilled Buyers out there in that category when new homes are listed.

The traffic in the Executive and Luxury homes remains excellent, although sales are not anywhere near the level of the smaller homes on smaller lots. That makes economic sense, but still the larger homes on larger lots are virtually all of the remaining inventory.

While I do not normally cover the Condo properties in my list and my analysis, I do note that one of the Condos SOLD this past week at $102,000, and it appears the Condo prices in the Meadows are on the rise.

I might note that our homes have always been undervalued because most people do not know we are here, so there has historically been less competition for our homes. Recently, our homes have attracted a lot of Buyers because our homes were – and are – under priced.

We pay for the relative seclusion in our home values, and that has been a blessing and a curse, but it is something that our residents have always treasured – right up until the day comes to sell their homes. Nevertheless, the length of time most of our residents have lived here attests to the fact that they would never move unless circumstances force them to.

Our new residents will grow to appreciate the luxury we have enjoyed.

July 21, Weekly Analysis

July 21, Weekly Analysis

The single new listing in the Meadows this past week is highlighted on the list.

The surprising thing about the list is that (basically) all of the lower-priced homes have sold. This is not surprising because, and this is not just true in The Meadows, there are multiple offers on lower-priced homes in North County, if you define lower-priced as below $400,000. There are, at this moment, no homes listed under $425,000 – and THAT is NEWS! Good news!

Three homes went into Pending last week, and with only one new listing the list gets shorter. 27821 Dogwood Glen, a 4/3 of 3,020 s.f had been listed at $440,000; 28136 Glenmeade Way, a 3/3 of 3,048 s.f which had been listed at $369,000 — $459,000; and 27253 Mountain Meadow Road, a 3/4 if 3,100 s.f. (on 39+ acres) had been listed at $1,995,000.

FIVE homes closed escrow this past week: 28120 Glenmeade Way, a 2/3 of 1,932 s.f. SOLD for $278,000; 9728 Indian Creek, a 3/2 of 1,596 s.f sold at $335,900; 10494 Meadow Glen Way East, a 3/3 of 2,469 s.f. sold for $380,000; 28244 Faircrest Way, a 3/4 of 2,819 s.f. sold for $445,000; and 10541 Cerveza Dr., a 4/5 of 6,958 s.f. sold for $720,000.

One interesting fact about the homes that closed this past week is the shortness of the “Market Time.” The homes were on the market for 2 days, 16 days, 9 days, and 87 days respectively.

Pricing is EVERYTHING in this market. There are buyers out there but they are looking for and finding relative bargains. Short Sales and Foreclosures set the prices in every area, including The Meadows, and homes of the regular sales variety must compete with these distress sales.

Unfortunately, we have as many as another 700,000 new national Foreclosures in the pipeline for this year, so it is likely that these housing doldrums will continue for some time.

The GOOD News is that builders are starting to pull permits so they think they see a light at the end of the tunnel, but over the next 18 months there is at best, uncertainty, and a continued soft market.

And, in the smaller and lower priced homes, there is a current rush for well-priced or extremely attractive homes in the under $500,000 range throughout North County, with something seldom seen recently – multiple offers on well-priced homes.

There are buyers in the Executive and Luxury home ranges, but they are waiting for the same reality check to set in that happened several years ago to the lower priced homes. Owners in the Executive and Luxury home market had more assets to try to wait out the market and their homes are only now being priced lower for the actual market as it currently exists.

Places You Don’t Want to Be in Real Estate

There are certain paces you don’t want to be as Buyers, and some for Sellers as well.

As a Buyer, you don’t want to chase the market up in a rising market. I have represented Buyers who insisted that they needed a home but continually offered just enough under the rising market to lose home after home.

Most people get into a market where they both have a home for sale and a home they want to buy. The WORST position for them is to get into a position where they either own no homes – having sold and closed theirs without having a place to put their family and furniture – OR they own TWO HOMES, having closed their buy without having a bite on their home. Both of these positions are untenable unless you have major liquid assets.

Then as a Seller, the worst position is to chase the market down. I have some very good friends/clients who really follow the real estate market closely but got caught in their own emotionalism, and did just this. They were always $10,000 too high in their pricing even to elicit an offer, and lowering their selling price just behind the market for more than a year – instead of getting ahead of the market initially as was recommended. They didn’t want to “lose” $20,000 in their initial price, and instead spent more than a year and lost more than $100,000 as they lagged the market downward.

When I see buyers lose house after house because they lag a market, I just smile because it teaches them a lesson they can (eventually) apply to the next offer – but being too high for a seller is a vastly different position. They usually don’t get offers from which they can learn for the next transaction – they get no or few offers, and so the feed-back loop is not efficient.

In this market, timing is everything and that is why I recommend getting an outside Appraisal and pricing the home UNDER the market. Buyers are looking for bargains, and being a bargain is binary – you either are or you are not – and Buyers have usually been looking for sufficiently long and have sufficient experience to know what a bargain looks like.

Confusing Housing Picture

The report on housing in the North County Times yesterday was instructive, right from the pull-quote: “It’s very hard to make sense of all this. It’s a crazy market” – a quote by a real estate economist G.U. Krueger.

The article has some interesting information: The banks are continuing to decrease foreclosures, and instead increase short-sales. This has several impacts – it does reduce neighborhood blight by keeping homes occupied, and it marginally protects the price decreases from plummeting, but it is a stop-gap action.

Non-distressed home sales (regular sales) must still compete with distressed home sales, and that still does not help the usual Seller – and the usual Seller is still a non-distressed Seller.

Lenders first send out Letters of Default to Sellers who are behind in their mortgages, and those letters have dropped in numbers for the 17th consecutive month in San Diego and Riverside Counties, as lenders reduce their foreclosures. In San Diego North County, the rate of defaults fell just this past month to a rate of 1.7 per 1,000 residences – a 26% reduction from March.. (In Southwest Riverside County their rate was 3.8 notices of default per 1,000 residences.)

In Riverside County, 54% of the homeowners are “under water” while in San Diego County only 34% are.

The good news is that in San Diego County, the median priced home rose to $452,000 (up 9% from February), but without any explanation I suspect that is an anomaly. The Riverside County median price went down.

It is too confusing a picture to make any sense of.

The Housing Market Continues to Be a Drag

I see that Zillow is predicting an 8% reduction in housing prices this year, and that sets well within the 6% to 11% reduction predicted by Morgan-Stanley.

Just when things look bad, they get worse, but we can hope that California sunshine wins out.

The foreclosure rate is slowing, but what we don’t know is whether that slowing is the result of fewer people in financial trouble or lenders holding off to try to stabilize a market in which they are hemorrhaging money in holding foreclosed housing in a lowering market. If the latter is the case, then it just prolongs the misery.

Either way, it isn’t good news, and it makes Buyers hold off making decisions, or offering still less to get next year’s lower prices, today.

There is both statistical and anecdotal  information that there are economic signs of recovery, including a lot of new cars on the road. The housing market is languishing because, among other things, potential Buyers are holding off until they think the housing decline is over (making it a self-fulfilling prophesy), and spending money on new cars while waiting.

Weekend Update

Not any real estate traffic on Sunday — both COLD and Mothers Day.

We had an Open House anyway, on the theory that there are always people needing to buy houses and we can’t predict who, when or where.

Finished my Hidden Meadows CD with the slide show, my bio, the CC&Rs, a Buying Guide for Buying in The Meadows, The History of Hidden Meadows, Frequently Asked Questions, and a list of local vendors and contractors that I use. If there is anything anyone can think of that some Buyer might need, please let me know.