December 1, Weekly Analysis

 

No new listings this past week, but one would not expect any during Thanksgiving week.

Two homes went into Pending, one at 10549 Meadow Glen Way East, a 4/3 of 4,278 s.f. which was listed at $449,900, and one at29471 Welk Highland Drive, a 4/5 of 5,237 s.f. which had been listed at $879,900.

Three homes Closed Escrow this past week: 9915 Canyon Country Lane, a 2/2 of 1,746 s.f. which SOLD for $385,000 and had been on the market for 41 days; 28321 Kettering Lane, a 4/4 of 3,244 s.f. which SOLD for $400,000 having been on the market for 419 days; and 10444 Meadow Glen Way East, a 3/4 of 3,224 s.f. which SOLD for $490,000 having been on the market for 26 days.

I have already removed one of my listings from the market for the Holidays and will soon remove another – many people simply do not want their home shown from before Thanksgiving to past Christmas. It is difficult to have family visit during the Holiday Season, and have Realtors showing the house.

The real estate market goes relatively cold during that period, and the activity we currently see has been in the pipeline for many weeks or even months.

We are approaching a low point for inventory, but after the first of the year the inventory will begin to increase, and we should have the list on the second page in February or March if history is any lesson. Our largest inventory will be in May or June – and that is also the time of maximum sales activity.

The Fed has already announced that they will hold interest rates next year at artificially low rates, so with increased business activity and growing consumer confidence the housing market should be very good next year with price rises at the 3% or even greater level for homes below $500,000, and at least stable prices above $500,000. Homes above $500,000 will appear to fall, but only because they will not be selling at near their listed price, but they will be selling at prices higher than the sales prices of this year.

There are distress properties above $500,000 that will sell at higher rates than this year, and that will make Executive and Luxury home prices appear to fall, but if you remember, they didn’t sell at all this past year. I expect more expensive homes to do much better this next year, because there is an artificially low Delta between the over-bid regular homes, and the more expensive and seldom-selling Executive and Luxury homes.

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September 22, Weekly Analysis

Three new listing this past week, and they are highlighted on the list.

No Meadows homes went into Pending, and only one home closed escrow: 28021 Grassy Way, a 3/2 of 1,768 s.f. which sold for $330,000 having been on the market 131 days.

There are continuing articles in local newspapers about gains in the “Real Estate Market.”

This is misleading, because there is no “real estate market.” There are MANY real estate markets.

The “real estate market” in Rancho Bernardo, with its many community centers, national reputation and acclaimed Poway Unified School District is vastly different from Hidden Meadows, which came by its name honestly. We have no schools, no neighborhood community centers, we have an address of Escondido that has poor schools even by poor California standards, and a community reputation that is less than sterling. It would help our prices if we had a different address, because the fact that we are not actually in Escondido appears to some people as a distinction, not a difference.

There is a belt across North County from north coastal cities, through Encinitas, Rancho Santa Fe, Crosby Ranch, 4S Ranch, Rancho Bernardo and North Poway that always sells well regardless of the market.

Even within Hidden meadows there are sub-markets that I have mentioned before: Homes in the investor and first-time homebuyer market often get multiple offers and sell quickly. (They may not close quickly because the lenders, particularly lenders of homes in short-sales and foreclosures, are not overly cooperative these days.)

Homes in the Executive market and the Luxury Market in Hidden Meadows have not caught up to the sales rate of the lower priced homes. Homes above $600,000 have always been our “move-up” market – sellers of lower priced homes purchased “up” when their jobs were secure and their business flourished.

More recently, the sales of normally priced homes have been by people underwater, or elderly and moving to retirement homes, or foreclosures and short-sales rather than the usual “move-up” people whose businesses are flourishing. Consequently, until the overall business market improves and confidence returns, the “move-up” market is just marking time.

September 8 Weekly Update

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

No homes went into Pending.

One home Closed Escrow: 10131 Sage Hill Way, a 4/3 of 3,321 s.f. Closed Escrow at $462,500 having been on the market for 32 days.

Partly the lack of activity has to do with the paucity of listings below $400,000, the primary market for investors and first-time home buyers, and part of the activity lack is the imminent closing of the main warm-weather selling season.

We continue to have good activity in all ranges of houses as measured by inquiries, MLS viewings, showings, and flyer activity, but actual offers are scarce in the upper levels of house prices. Houses at $500,000 and up are usually the “move-up” market, and that depends upon solid economic activity in the entrepreneurial and corporate markets. While stocks are high, and profits are up, there is still uncertainty in the jobs market and so executives are wary in buying executive and luxury level housing.

As soon as the political season ends, there will be some certainty in the economic markets – more with one candidate than another – but sufficient certainty to establish a business and housing market for the next year.

The wild cards are the European EURO mess, and the potential for war in the Middle East, either in Syria, or between Israel and Iran. Either will roil both the political arena and the economic arena. The world’s largest container shipping corporation is increasing both tonnage and rates between the US and Asia, while dropping tonnage and rates between the US and Europe – a vote of no-confidence in the European economic situation. Europe is 25% of our export market, so they matter.

All of this impacts the US housing market – less so in Southern California, but it sufficiently increases concern to impact confidence and ALL markets, but particularly high-value markets like real estate, are confidence driven.

We will know the housing market better in the March/April time frame. The Winter months last year were active, but turned hot in March. Absent unexpected Middle East or European problems, we can expect the same relatively quiet but continued active Winter months.

September 1, Weekly Analysis

September 1, Weekly Analysis
Two new listings this past week in The Meadows, and they are displayed with yellow highlight on the list.
No homes went into Pending or Closed Escrow this past week.
This lack of activity was not just Hidden Meadows, but throughout the entire Zip Code of 92026. Partially, this can be attributed to the school year starting and all Buyers with school-age children want their children settled before school, and partially this can be the current lack of inventory in the “Hot” market of starter homes that attract first-time home buyers, and potential rentals that attract investors.
I checked my computer for the list I printed on September 3, 2011 and there were four listings in the $300-$400,000 range and one listing at $299,900!
Right now we only have one listing in the $300,000-$400,000 range, and I suspect it will sell before the listing gets to 20 days or so. It may even attract multiple offers and therefor take a few days longer, but only because of the activity around it. It is priced at a point to attract interest, and I have not even seen it to evaluate the condition of the property.
Local Realtors gathered last week for a Realtors Caravan, always held on Thursday at 9 a.m. – we gather at the Deli and tour a few homes. It must have been six or eight weeks since we had a Caravan, because many homes sold before we could arrange them on Caravan, or the Owner or Realtor (usually “outside Realtors”) didn’t want to bother to have Realtors view their homes. In some cases the homes were under renovation, and then sold before they could be viewed.
In “hot” markets, we have as many as 10-12 Realtors on a weekly Caravan. Many Realtors have dropped out of real estate, either temporarily or permanently, so we now expect perhaps six Realtors and seldom have more than one Caravan a month. Only professional Realtors remain in the market. Hidden Meadows has a core group of EXCELLENT Realtors.
National trends are reporting a slight increase in prices, about a half a percent. What that really means is that this is the bottom of the market. A half a percent is well below the inflation rate, so essentially homes are still losing value, although not price, but losing value at a lower rate.
All markets are based on confidence, and it will take sustained increases in confidence to move the housing market upward. Perhaps after the uncertainty of the national election is removed, we will see market conditions change.

Aug. 25 Update

August 25, Weekly Analysis
Four new listings this past week in The Meadows, and they are displayed with yellow highlight on the list.
One Meadows home went into Pending this past week: 27780 Granite Ridge Road, a 4/3 of 3,020 s.f  had been listed for $431,700 for 85 days.
One home in The Meadows closed escrow this past week: 27821 Dogwood Glen, a 4/3 of 3,020 s.f. SOLD at $450,000 after 56 days on the market.
Once again the sales activity continues in the under $500,000 market, where investors and First Time Home Buyers are active, but showings and offers continue to be steady in the Executive and Luxury category, but sales are relatively rare.
The national market seldom has much impact upon Hidden Meadow activity or sales. We are such a unique market that most outside Realtors only know of Hidden Meadows, and calls for directions are normal. Generally, our homes are bargains in ANY market because we are so unknown as a community – and that is the way our residents like it, until the time comes to sell their homes and then they complain about the number of showings. But our relative isolation is the reason we live here – rural but not remote, and very close to everything.
The uncertainty in the overall business and financial markets may continue into next year, when the political climate will be known and even the Euro roil may calm down in the European markets. Uncertainty in the political and economic arenas are reflected in the housing markets, and confidence levels may rise when the political arena is more settled.
March should bring not just warmth to the Meadows landscape, but a better housing market as well — first as a result of the pent up demand generated during the relatively calm winter months, and then a rise in confidence that the political silly-season is behind us.
While we do not have an actual “winter” by any rational standards, we do lose a lot of house shoppers particularly during Charger games and damp weather – but serious buyers are ALWAYS looking. When your business places you, your spouse, three children and two dogs in a two bedroom suite in Mission Valley, there is a BIG incentive to find permanent housing, whatever the weather!

August 18 Update

August 18, Weekly Analysis
One new listing this past week in The Meadows, and it is displayed with yellow highlight on the list.
Only two Meadows home went into Pending: 10541 Pinion Trail, a 5/5 of 3,920 s.f. which had been listed for $525,000 — $550,000 (for only 9 days!); and 10160 Boulder Knolls, a 5/3 of 3,122 s.f. which had been listed at $539,000 — $569,000 for 76 days.
Two homes Closed Escrow this past week in The Meadows: 28125 Hamden Lane, a 3/3 of 2,070 s.f. closed at $343,000; and 28136 Glenmeade Way, a 3/3 of 3,048 s.f. closed at $345,000.
Almost two weeks of unusual heat has diminished the traffic, because those who live in Southern California do so for a reason: They are sensitive to weather. Closings of those homes that went into Pending weeks or months ago again demonstrate that the strength of the market is in the lower prices – the two that closed this week are almost $100,000 lower than the lowest priced homes currently on the market.
In different times, when homes in all price ranges are selling normally, the current trend might signal a rise in prices, but in the current market it just signals price sensitivity and bargain hunting primarily in the first-time buyer and investor market.
Two of my higher-priced homes have had recent offers, but here again from bargain hunters. Bargain hunting is a legitimate way of seeking homes, but it works best in a market where sellers are under pressure to sell, and while that happens often in the lower priced homes it is not as frequent in the Executive and Luxury homes.
Still, you can’t blame buyers for trying, and both buyers and sellers have changes of motivation from day to day.
We can only hope that this weather will break, and that the “selling season” will extend to make up for the weeks we have lost. I know there are buyers just shopping in the Executive and Luxury category and they have their choices selected, but are waiting for a more appropriately motivated seller. It is not hard to find excellent homes in the inventory, and not every home fits every buyer.
Depending upon the political and economic climate, I would not be surprised if the selling season lasts all during the cold months. There are buyers out there.

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.