San Diego has the highest percentage change expected in rents and income! Lowest on population growth and job openings per person?Link to Article
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It’s been widely accepted for years that off-market sales are part of the real estate landscape. After the (fraudulent) short sales went away, realtors needed another sexy lure to attract new clients, and rather than crafting the high demand and bidding wars into an auction-like experience, we went the other way and are using restricted access as our ploy.
None of the industry players want to even talk about it, let alone do anything.
In the meantime, it’s the way the business is trending.
With no public objections and so many off-market deals happening right before our eyes, every agent and brokerage wants to take advantage and create an effective off-market strategy.
It restores control of the inventory to the agents – we decide who gets exposed to the listings, and when. It will also turn the MLS into the website of last resort, used only when a listing agent can’t find their own buyer. The real estate portals will suffer, and full access for consumers won’t be the same.
We might as well go back to the MLS books!
Many agents claim it’s just ‘pre-marketing’, but what happens if a buyer makes an offer before the listing hits the open market? Are you going to turn it down? Or are you going to make a quick deal and move on to the next one?
The phase underway now is the building of realtor clubs.
There’s the PLS, as well as the Top Agent Network, which is operating in 31 markets and should be coming to San Diego soon. They offer club membership to the top 10% of producing agents in each region so they can network and market their listings to each other. I’m also a member of 4-5 groups on Facebook, where the focus is pre-MLS exposure of listings and ‘making deals’, plus there are several realtor meet-ups around town too.
The shift to private, off-market deal-making isn’t just coming soon – it’s here.
I think we should just admit it to ourselves and to the consumers, and then find a way to make the best of it – because it’s not going away.
Does weather affect home sales?
Yes, buyers don’t mind the distraction when the market is uncertain!
But now that the holidays are over, the Chargers are done, more houses are coming to market, and mortgage rates are a half-point lower than they were three months ago, we are (over)due for a surge of activity.
There are two big NFL games on Sunday afternoon, which leaves Saturday wide open – and it has the best weather of the week.
No big games the following weekend, so if the weather holds out, buyers should be fully engaged – and if they aren’t, then that says something too.
It’s hard enough just trying to sell – if you have to schedule around the weather and other conflicts (graduations, for example), it narrows down the chances even more. But if we can anticipate opportunities, let’s take advantage.
A few general observations as the 2019 market continues to liftoff.
- At the Inventory Watch, we are measuring the active listings, which are the unsold listings – so we are measuring what isn’t working, at least not yet. In the past, it was just a matter of time before the rising market came up enough to meet every seller and their price, but now we’re not as confident about when that might happen. It may take a lot longer before pricing rises substantially, and we could plateau for years to come.
- Rising inventory gives buyers more confidence that waiting longer will produce better results. It used to happen like that when banks were selling REOs for whatever the market would bear, but now that those days are over. Will there be sellers who want/need to sell for whatever the market will bear, or will they wait? (which would create a glut of unsold listings)
- Markets will vary. You can see in Bill’s graph above that inventory behaves differently, and it’s really an indicator of how much sellers and listing agents are holding out on price. Our current inventory is +24% year-over-year, which is mellow given our higher price point compared to those in the graph.
Are you coming off vacation and getting back in the swing? Click here to register your guess of how many total listings we will have between Jan 1 and Feb 28 – the closest will receive four tickets to a Padres game!
From the UT with hat tip to WC Varones (JMI = John Moores, ex-Padres owner):
Developers have finally started construction activity this week on a Leucadia bluff-top hotel project that’s been talked about for decades.
Located just west of La Costa Avenue’s intersection with Coast Highway 101 and part of a site that once contained the Cabo Grill, the 4.3-acre property will become home to a $110 million, 130-room hotel. The luxury hotel, which will have ocean views from all but two of its guest rooms, is scheduled to open for business in November 2020.
Fenway Capital purchased the property about 13 months ago and is working jointly with JMI Realty to develop the land, which was once owned by KSL Resorts, Jackel said. Long ago, this property was envisioned as a companion property — kind of a “beach club” — to the La Costa Resort & Spa just east of El Camino Real, he added.
People passing the site initially will notice little more than new fencing, construction trailers and some surveying work. But at the end of January, a hotel project-funded sand replenishment will start on the beach below the bluff. Contractors will be adding 45,000 cubic yards of sand to the beach between late January and the end of February.
A public staircase in the area will remain and a new beach access pathway will be added from La Costa Avenue as part of the hotel development, Jackel said. The new pathway is scheduled to open just before the start of summer in 2020, a construction timeline indicates.Link to Full Article
I went to the grand opening today of these $2,000,000 tract homes and thought because of the rain that I might be the only one there. Wrong! There were hundreds of people – and this isn’t Carmel Valley – not even close:
While some folks can’t make sense of a move up or down, there are others who have specific wants/needs, and are willing to forge ahead – if they can just sell their existing home and pour their equity into the next one.
I’m three for three this year with contingent sales already, and I wouldn’t be surprised if half of my sales in 2019 will involve contingent buyers.
The challenge gets more complex when multiple sales are contingent! They stack up like dominoes, all dependent on sales on either side to be completed successfully – and risk all crashing if a problem pops up that can’t be solved.
Up to now, listing agents and sellers haven’t had to deal with contingent buyers because we’ve had enough non-contingent buyers to go around. Not any more.
The #1 reason sellers and listing agents should consider a contingent offer?
Contingent buyers pay more.
They know they are asking a favor, and in effect, they are purchasing a favor.
Plus, their purchase is contingent upon them selling their house (read: getting the price they want), so everybody gets what they want. Win-win!
Contingent sales can be highly speculative, however, and our existing system doesn’t provide a safety net, so there is a risk that every seller could get left holding the bag.
How can we tighten these up?
- Have buyers obtain full loan approval. At least if the buyers are fully approved by the mortgage underwriter, that concern is satisfied. A pre-qual letter isn’t solid enough to tie up a property.
- Review the lender downstream. If there is a chain of contingent sales domino-ed together, let’s take a good look at everyone’s lender letter – because we’re all in it together.
- Review the agents downstream. Is everyone competent? If my sale is reliant upon an agent downstream finding and solving problems, then it’s not asking too much to know who it is. What else have they sold lately?
- Supply comps and photos of contingent properties. Every agent involved should know – and get to render their opinion – on the price/value of the other homes in line.
- Bridge loans. Bridge loans are out there, and Compass should have a good alternative ready before too long. A fantastic option that solves everything.
There is another viable alternative that every contingent-buyer should consider: Selling your home first. The immediate reaction is usually the same – I don’t want to be left homeless, or I don’t want to have to move twice, which is understandable.
But we do have the seller contingency that allows us to find a suitable buyer for your home while not binding the seller to move until they find suitable housing:
Our ability to master the contingent sale will probably make or break the market this year. Without them, will there be enough buyers with the equity, desire, and ability to keep the party going? It’s doubtful.
Most realtors, let alone buyers and sellers, are unfamiliar with contingent sales. But this is where our creativity will pay off in a challenging market!