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.

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.

Bad News

In what can only be said to be bad news for the overall economy, homes entering the foreclosure system rose 18% in California and 12% overall in June over June of last year. This is the second straight month of increasing foreclosures being initiated in California, and indicate an impatience on the part of lenders to tolerate people not paying their mortgages.
(Right here in The Meadows, I know of homes where no house payment has been made for several years but the banks have not yet proceeded against the owners. Every indication is that the banks are stepping up the process.)
According to an Associated Press report, there are more than 3 million households who are behind on their payments (Mortgage Bankers Association), and 13 million US homes that owe more than the current value of their homes.
Overall, it takes 378 days from the time a homeowner gets notification of bankruptcy proceedings untol the home is actually taken over by the bank. Banks historically hold onto the home for some time so as not to flood the market.
At the end of June the banks had 629,000 homes on the market, and not sold. (RealtyTrac)
Many of the homes will go into Short Sale, rather than be taken over by the bank. Nationally, it takes 318 days for a Short Sale home to be sold.

Last year, the lenders seized about one million homes, according to RealtyTrac and the Associated Press, and the prediction is that another 700,000 homes will go into bankruptcy this year.
These are scary numbers, particularly the information that lenders are starting to proceed against those who have not paid their mortgage.
More Short Sales and Foreclosures spell trouble for home prices. We have had solid sales over the past few months in the under $500,000 price range, but few sales above $500,000.
The numbers in the Associated Press report spell trouble for future sale prices, and could depress the housing market further, or at the very least extend the poor housing market time to recovery, and keep the overall economic market limping along.
The answer to one of the questions on the California Broker’s Exam that I took more than 30 years ago was, “Housing markets lead recessions, and lag recoveries.”  That has always been the case, and indicate more years of economic struggle.

July 7, Weekly Analysis

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

There were no Meadows homes going into Pending this past week.

There was only one home that Closed Escrow this past week: 10228 Oak Spur Way, a 4/3 of 2,601 s.f. which sold at a closing price of $390,000.

If you do not recall a more sparse report in recent memory, neither do I. We have not had such a slow week in a long time. It is just possible that we have reached an equilibrium and there are few available Buyers. One of the imponderables in real estate is the pool of available Buyers – it is the unknown in every market equation.

The one thing we do know is that when Buyers think the interest rates are falling, they will wait – hoping they fall still further. And, when interest rates are rising, Buyers jump in to get the rates before they rise further.

Recently, interest rates have fallen, and that discourages immediate purchases.

Nevertheless, showings continue at a high rate, calls continue and flyers disappear at a reasonable rate so there is some confidence that this week was just a temporary hiatus. If this week is duplicated for several weeks, then we know there may be trouble but other indicators are still positive.

In a presidential election year there is always uncertainty, and when that happens in the midst of a recession that uncertainty is multiplied. The recent job numbers have been insufficient to even fill the ranks of the new workers who come into the job market every month, much less eat away at the ranks of those who have been unemployed for quite some time.

The bad job growth numbers are partially the result of bad economic policies but some of it is the result of structural changes in the labor market – companies have found that through the employment of technology they can make good profits even with a slimmer labor force. Consequently, we find the stock market growing, while the unemployment numbers remain high. When companies shed their excess labor force, they did it without penalty to bottom line, and there is no incentive for them to change.

We may be looking at a “new norm” of a future unemployment rate of nearer 7% than 4%. Among other things, that equates to a slower recovery of the housing market PRICES, if not sales. The construction industry has been hit hardest by the recession, and contractors will try to start building because that is what they do. If they come back too fast that will again depress prices.

There are still foreclosures held in inventory that the banks will slowly feed into the market.  I look forward to sales continuing, but at these lower prices for at LEAST five more years.