June 30, Weekly Analysis

No new listings this past week.

Three Hidden Meadows homes went into Pending this past week; 28120 Glenmeade Way, a 2/3 of 1,932 s.f. which had been listed for $269,000; 28125 Hamden Lane, a 3/3 of 2,070 s.f. which had been listed for $343,000; and, 27746 Willow Trail, a 3/3 of 3,065 which had been listed for a variable price of $429,000 to $459,000.

Four homes closed escrow this past week: 28142 Par View, a 3/3 of 2,169 s.f. sold for $405,000; 28218 Glenmeade Way, a 3/3 of 2,387 s.f sold at $465,000; 10575 Laurel Path, a 5/5 of 3,920 s.f. sold for $505,000; and (drum-roll, please) 27245 Lotus Pond, a 5/7 of 6,000 s.f. which sold for $2,150,000 s.f.

This last sale demonstrates why there is so much current activity on my Alps Way property, and certainly sets the marker for executive and luxury homes.

Technology has changed the real estate landscape forever, by-passing Realtors as the gate-keepers to information. Buyers who want to find which homes are for sale, at what price can get that and a lot more.

In one of my previous lives, I was Core Adjunct Professor of Computer Science, so even though I am old I am very technological and have a new iPad and an iPhone 4S. Just last night I downloaded a new (free) app called HomeSnap by Sawbuck, which allows a potential Buyer to take a snapshot of a home with a Realtor’s sign in front and the computer gives the photo-taker the information on that listing. I have not yet tried the app, so I do not know how good it is, but more available real estate information is never a bad idea.

Realtors are hardly being replaced, but some of their functions are being replaced. Buyers do not buy homes on the Internet, but they DO reject certain properties based on the Buyer’s known likes and dislikes, and then present the Realtors with a greatly diminished list for viewing.

In Hidden Meadows, Buyers are usually younger and more technological than Sellers, but then they need to be. This next week a Buyer is coming into San Diego for only one day with a list only five County homes they wish to see, and fortunately two of those are my listings. The Buyers have done their shopping on-line, and most Buyers do these days.

It is a new, technological real estate world.

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June 23 Update

June 23, Weekly Analysis

The two new Meadows listings are highlighted on the list.

Three homes went into Pending this past week: 28651 Mountain Meadow Rd., a 3/3 of 3,471 s.f. had been listed at $399,000; 10131 Sage Hill Way, a 4/3 of 3,321 s.f. had been listed at $469,900; and, 28250 Sparkling Oaks Trail, a 3/3 of 2,709 s.f. which had been listed at $469,000 — $499,000.

The large number of homes that went into Pending over the past several months – which has indeed been a very large number – are now starting to close in large numbers.

Six homes closed escrow this past week: 10642 Meadow Glen Way East, a 2/2 of 1,932 s.f sold at $301,000; 10506 Moon View Way, a 3/2 of 1,275 s.f. sold for $315,000; 10255 Spruce Woodlands Way, a 4/3 of 2,357 s.f. sold for $405,000; 10932 Treeside Lane, a 3/3 of 2,951 s.f. sold for $406,000; 10344 High Mountain, a 3/3 od 2,923s.f. sold for $452,000; and 10575 Laurel Path, a 5/5 of 3,920 s.f. sold for $505,000.

While it might appear that prices of homes are rising, that is not the case – it is simply that a few higher priced homes (a very few) are selling, and the addition of those to the mix raises the average and the mean without disturbing the relatively low prices of the individual homes.

What is obviously happening is that homes below $500,000 are still briskly moving, and that is an improvement over the recent history where homes below $400,000 were briskly moving.

There are Buyers above $500,000 and they are actively looking. They do not feel any great motivation to make offers because they do not feel any competition for homes they covet, and in the meanwhile they can continue to shop the market of new listings in their price range without fear of losing their current favorite.

Those looking in the upper ranges are starting to get nervous that the end of the malaise is in sight and that interest rates will not last at these numbers forever. Buyers in this range are sophisticated Buyers – not either first-time buyers or investors – and are trying to time the market. That can be chancy, because these homes are not easily replaceable because they are unique.

June 11 Weekly Update

Two new listings this past week, and they are highlighted on the obverse.

We had to break our lengthy streak of homes going into Pending, and this was the week: No homes were listed as going into Pending.

And only one home was listed as having completed the sale process: 28720 Sandhurst Way, a 4/3 of 3,220 s.f. which sold at $549,000.

This lag in the sales is an opportunity to offer caveats about reading the information on the other side of the page. (This refers to a weekly listing I have of available Hidden Meadows homes, a list you can get on by sending me an e-mail to allen@allenhemphill.com)

I have included the information that most Buyers inquire about, however some of the information is of questionable value. For example, the age of the house – that is simply the year it was first constructed, and most of the homes in The Meadows have had some remodeling and some have had extensive remodeling. There is nothing in the information to tell you which homes are in original condition, or completely remodeled.

I have always believed that listing the square footage is desirable, but somewhat misleading. A house that is 3,000 feet long and one foot wide is a 3,000 s.f. home that is unlivable, so obviously there are homes that live “smaller” than their listed footage, and those whose layout lives “larger.’

Layout counts.

While not every home that is .25 acres or less is in the Covenant, that is a good Rule of Thumb, and while every home that is on an acre or more is not necessarily out of the Covenant, that again is a good Rule of Thumb  There are exceptions to those “rules” but when guessing if a home is in the Covenant, those are good guidelines. Experienced local Realtors are the best guide. It’s like sewers – a FEW homes out of the Covenant are actually on sewer, but the Rule of Thumb is homes out of the Covenant are on septic tanks.

Mkt Time (Market Time) is an absolutely useless measure. A competent Realtor can manipulate this number with ease, and most do.

Finally, $/sf is an almost worthless measure. It does not take into account, acreage, or views, or golf course locations, or the difference in the quality of construction (tile vs. granite, swimming pools/spa, dual pane windows, etc.) $/sf is really a useful item only for tract homes, not for custom homes, and 85% of The Meadows are custom homes..

May 11 Analysis

May 11, Weekly Analysis

Rather than make a long list of new listings, I have color coded the new listings with an electronic highlighter.  New home listings are the primary interest of returning potential Buyers, and in this manner they can concentrate on the quadrant of homes they are particularly interested in viewing.

If I could I would color code the Pending and Closed Escrow as well – that visual would be interesting to see – but those disappear from the list the second they go into Pending, so…

Three homes went into Pending this past week – another good week for sales. 28024 Grassy Way, a 3/2 of 1,872 s.f. was listed at $349,900; 28103 Par View Court, a 3/3 of 2,795 s.f. was listed at $479,000; and 10541 Cerveza Drive, a 4/5 of 6,958 s.f. had been listed at $795,000.

Three homes Closed Escrow: 9629 Misty Meadow Lane, a 5/3 of 2,944 s.f. SOLD at $540,750; 28304 Crooked Oak Lane, a 4/4 of 3,529 s.f. SOLD at $549,500; and 9629 Misty Meadow Lane, a 4/5 of 5,344 s.f. closed at $875,000. Just seeing three homes close in one week above $500,000 is absolutely amazing!

I realize that no one is happy with the prices at which homes are sold compared to the “Good Old Days,” but those days are gone, and we have the new normal. At least the “new normal” is that well-priced homes are selling, and that is much better than just last year or the year before.

I can tell you that flyers for my listings are disappearing at a rapid rate, and showings are excellent. Buyers are cautious, but Buyers exist in numbers that we have not seen for years and we are just at the start of the Selling Season.

Withheld Foreclosures by Lenders cautious about flooding the market signal no higher prices for several years, and no one knows the size of the available Buyers pool so future predictions are chancy, but we can be thankful for what we currently have – and we still live in Hidden Meadows1

April 7 Update

April 7, Weekly Analysis

Three new listings his past week: 10139 Sage Hill Way, a 4/3 of 2,996 s.f. was listed at $399,900; 28042 Glenmeade Way, a 3/3 of 2,159 s.f. was listed at a variable price of $495,000 — $535,000; and a home at 29078 Welk Highland Drive (Rimrock) was listed at $660,000.

Three homes went into Pending this past week: 10634 Meadow Glen Way East, a 3/3 of 3,250 s.f. went into Pending having been listed at $469,000; 10344 High Mountain Drive, a 3/3 of 2,923 s.f. went into Pending, having been listed at $470,000; and a home at 9629 Misty Meadow Lane (Rimrock), a 4/5 of 5,344 s.f.  went into Pending, having been listed at $930,000.

Three homes Closed Escrow this past week: 9808 Dogwood Lane, a 3/2 of 1,888 s.f  Closed Escrow at $330,000; 9926 Sage Hill Way, a 3/3 of 2,660 s.f. Closed Escrow at $410,000 s.f.; and 28707 Rolling Rock Road, a 5/3 of 2,800 s.f Closed Escrow at $435,000.

The market continues to be red hot below $500,000, and there is at least the beginning of movement above $500,000, but it is fairly spotty. Three homes that went into Pending this past week did not quite match our long string of four Pending homes a week, but three is well above average in ANY market.

Within a week, I will list two homes with a combined value over $3,000,000, so I am hoping that the “luxury” market improves over the Summer. My personal Meadows listed properties will reach $4,000,000 by July and that will be just THREE homes, so if anyone knows someone looking in the luxury market….

The banks recognize the market is changing, and they have been sitting on a large inventory of foreclosed homes that we expect to see on the market this year, to take advantage of the increased sales and decreased inventory. What no one knows is how large the pool of available Buyers is, their motivation, and whether the increased foreclosure dump onto the inventory will overwhelm the available Buyer pool. The “shadow inventory” of bank-owned but unlisted properties could impact market prices, unless the banks are sensitive to their impact on market inventory, and therefore prices.

Best Local Housing Analysis

This interesting excerpt written by Rich Toscano  from voiceofsamdiego.com addresses the current San Diego County housing situation as usually noted in the press, using the Case-Shiller index:

“The Case-Shiller numbers I usually report on are not seasonally adjusted: they make no attempt to compensate for the fact that prices tend to be stronger in spring and summer than in fall and winter.  This is good in that it shows us the actual degree of price changes taking place (or an estimate thereof, anyway), which is obviously interesting.  The problem is that it’s harder to ascertain the underlying trend: if prices are going up in the spring, for instance (as now), is it simply due to the typical underlying seasonal pressures, or would prices still be rising absent those pressures? “

http://www.voiceofsandiego.org/toscano/article_7a509570-a2b9-11e0-acad-001cc4c03286.html

I commend Rick’s analysis of Case-Shiller, which is the best technical index available. He actually understands numbers.

Those of us “in the industry” understand our own market, in my case Hidden Meadows, and any small slice of a market may, at any given time, be running with or against the tide but we are still influenced by the larger market. It is a fact that any individual agent may be on a hot streak, or a cold one and to that agent the “market” he or she sees is very different.

But for general technical knowledge of the San Diego market, you can’t beat Rick Toscano at voiceofsandiego.com

June 12 Analysis

June 12 Weekly Analysis

The loss of home equity with a continued slide of home values will further diminish the ability of the rest of the economy to recover, and simultaneously the ability of the rest of the economy to recover diminishes the ability of the home values to stop sliding.

Admittedly, the ability to take second trust deeds both fueled a strong consumer economy and at the same time placed homes underwater as prices started to slide.

Apparently, borrowing against equity was overdone – but there is no economic yellow light to indicate when so much is too much.

The continued home value slide places still more homes underwater – even homes that had reasonable value remaining just a few months ago. Now, there is no room left to take a loan against many houses to keep a small business alive, and more and more vacancies appear in local shopping centers. That translates directly to more homes going on the auction block because as businesses fold, the business owner is unable to repay the trust deed he or she used to secure the loan to open the business.

The amount of surplus one has in their home determines to a huge degree the feeling a family has about their financial worth – and that is reflected in the confidence they have in the economy. Almost everyone sees their home equity diminishing along with their confidence in the economy, and that feeds upon itself.

Obviously, an outside force needs to be instituted and quickly, because housing markets, like all markets, tend to overcorrect. In the Great Depression, FDR tried pump-priming without success, but a World War was sufficient to do the job, at a very high price.

Both exuberance and fear are contagious. Entropy has set into the system, and a shock of considerable magnitude will be necessary. Working around the edges will not do the job.