September 29, Weekly Analysis

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

Three homes went into Pending this past week: 10028 Sage Hill Way, a 4/3 of 2,194 s.f which had been listed for $341,900 (my sale); 28651 Mountain Meadow Road, a 3/3 of 3,471 s.f. which had been listed from $399,000 — $426,000; and 9533 Sage Hill Way, a 3/3 of 3,255 s.f. which had been listed for $582,000.

One home Closed Escrow (Sold) this past week: 10611 Cerveza Dr. a 4/4 of 2,997 s.f. which sold for $509,000.

The Hidden Meadows market continues to be hot in the price ranges under $600,000 and cold above that price. The good news is that nationally, there are some positive signs and with the exception of those markets that seldom have major price reductions (such as homes with ocean views) and those positive signs are most positive in areas most hard hit. That is a good sign only because all markets cannot stand one area getting too far outside of whatever is its normal position. So long as our weather remains warm, we can hope for continued good results, and given that even our bad weather is not all that bad, perhaps the good sales will continue over the “winter” months.

I make that sunny hope on the multiple offers currently being made on well-priced homes under $450,000. I spoke with of my investors last week and his three latest purchases are remodeled and in escrow, and he is in the market for several more homes. Those investors who “flip” homes in the low market are going to be in play so long as prices remain low. In general, these investors pay cash, so low interest rates are immaterial for them but are important to their Buyers.

These low interest rates are taking money from retired people’s savings – savings that they had depended upon for retirement. It’s called “income redistribution,” and it is purely artificially being forced upon the public by the Federal Reserve manipulating the market. Whether it is a good thing or a bad thing depends upon if you are a retired person living on CD’s or a young buyer looking for a first home.

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 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!

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.

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.

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.