Pete Saxon Realty Newsletter – August 2017

July 31, 2017

Here’s why resale inventory is so low

Trulia has an excellent article explaining the low number of homes for sale across the U.S. Two factors on their  list and probably the main reasons San Diego’s inventory is so low are new home construction and investor ownership.

July 28, 2017

San Diego home building picking up

San Diego Union-Tribune article discusses San Diego economist Alan Gin’s report on jump in residential building permits. “June’s jump was the largest monthly increase since March 2005, but permits are still 17 percent behind last year’s numbers.” This is good news but several years away from having an effect on housing availability.

Sellers see highest profit in 10 years

CNBC’s Diana Olick reports that across the U.S,, “The average tenure of a homeowner who sold in the second quarter of this year came in at just over eight years,” which helped increase their equity and profit. I remember when the working theory in San Diego was that homes turned over every 5 to 7 years. The article states that people are selling and moving now because they are uncertain if they will be able to find a replacement property since inventory is so low.

July 26,2017

San Diego median price now $543,500

Phillip Molnar of the San Diego Union-Tribune reports on CoreLogic’s statistics, “San Diego County’s median home price hit another record in June with an imbalance of supply and demand continuing to push costs up.” Mr. Molnar’s article had a very interesting quote from economist Chris Thornberg, “prices will continue to increase in San Diego because affluent buyers, such as tech workers or researchers, are willing to pay top dollar for scarce housing. ‘Home prices are not set on the basis of average income in a community,’ he said. ‘Home prices are set on the basis of the average buyer. When you have a lack of housing — how most of coastal California does, like San Diego — the people who want to move there are willing to pay.”’

July 24, 2017

U.S. sales off 1.8%

Forbes reports that existing home sales in June slowed by 1.8% when compared to May but were up .7% over a year ago. I just love how the media picks the negative statistic to make their headline.

July 22, 2017

Pending Sale in Encinitas

Home For Sale Encinitas Ranch
Home For Sale Encinitas Ranch

Encinitas Ranch three bedroom, two and one-half bath with 2,114 sq.ft.  on premiere lot. Ocean and golf course views. Offered in a range of $990,000.00 – $1,170,000.00.

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July 21, 2017

San Diego housing crisis analyzed

Dan McSwain of the San Diego Union-Tribune analyzes the root causes and their effects on the San Diego regions housing availability and affordability. San Diego has an inventory shortage which is dramatically driving up prices. The cause? “Glaeser and Wharton economist Joseph Gyourko found that zoning and land use controls were the dominant forces driving up housing costs.” Government is the cause.

July 15, 2017

Prop. 13 reform?

San Diego Union-Tribune article discusses, ” real estate leaders are proposing to amend Proposition 13 to give homeowners a tax break when they sell and thus generate more supply and reduce pressure on prices.” The premise of the story is that home owners aren’t selling and “moving up” because of the increased property tax bill they would incur in a more expensive home. I don’t agree. People aren’t selling and moving up because of their sense of insecurity caused by the political activities in Sacramento and Washington. Also, there is no wage growth in San Diego County for first time buyers that creates a “move up” market.

July 9, 2017

Falling inventory across U.S.

“The number of starter homes on the market dropped by 15.6%, while the share of starter homes dropped from 23% to 22.1%,” according to a story on Trulia’s Trends Blog. Without starter homes for first time buyers then there is no “move up” market which traditionally drives healthy real estate markets.

Pete Saxon Realty Newsletter – July 2017

June 30, 2017

Ownership hits 50 year low

“The downward trend of home ownership began with the housing bubble burst and subsequent recession starting in late 2007, which resulted in as many as 10 million families losing their homes to foreclosure nationwide, according to the National Center for Policy Analysis. Not only were homeowners unable to pay off existing mortgages, but younger people entering the workforce for the first time were unable to qualify for mortgages, as lenders had to restrict lending practices dramatically,” according to CNBC.

June 29, 2017

County prices outpace U.S. and CA

“Low mortgage rates and lack of homes for sale throughout the nation are continuing to push prices up, wrote David Blitzer, managing chairman of the Index Committee at S&P Dow Jones Indices, in the monthly report.” The San Diego Union-Tribune reports that San Diego County home prices increased 6.6% while prices increased 5.5% nationwide.

June 28, 2017

U.S. pending sales off for third month

Lack of inventory in the affordable price ranges across the country is still having a negative impact on pending home sales according to the National Association of REALTORS.  “Pending home sales in the South declined 1.2 percent to an index of 123.4 in May and are now 1.4 percent below last May. The index in the West subsided 1.3 percent in May to 98.6, and is now 4.5 percent below a year ago.  ”

California pending sales off for fifth month

” California pending home sales fell for the fifth consecutive month, suggesting the state’s housing market may underperform over the next few months, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported. Pending sales in San Diego, San Bernardino, and Los Angeles counties declined from last May, but those counties had drops of less than 5 percent.” It’s all about inventory. How many For Sale signs have you noticed in your neighborhood?

Mortgage application drop 6%

Diana Olick of CNBC reports that, “Mortgage rates have been sitting at a six-month low for the past month, barely moving, but mortgage demand is still shrinking. Total application volume fell 6.2 percent last week, compared to the previous week. The Mortgage Bankers Association’s seasonally adjusted application index is now down 17 percent compared to the same week one year ago.” It’s not so much that buyers aren’t ready to buy, there’s just no inventory.”

June 21, 2017

County median price hits $530,000

“The San Diego County median home price hit $530,000 in May, breaking the nominal record set last month and increasing 8.2 percent in a year, real estate tracker CoreLogic reported,”  reports the San Diego Union-Tribune.

June 14, 2017

1% down payment mortgage

So, here we go again. The San Diego Union-Tribune reports on a new mortgage offering by Guild Mortgage that allows for a 1% down payment. These very highly leveraged loans can be a problem when real estate values slip just a little bit creating “underwater” loans.

San Diego Real Estate Newsletter – June 2017

May 31, 2017

U.S. pending home sales off 1.3%

The National Association of REALTORS Pending Home Sales Index, “a forward-looking indicator based on contract signings, decreased 1.3 percent to 109.8 in April from a downwardly revised 111.3 in March. After last month’s decline, the index is now 3.3 percent below a year ago, which is the first year-over-year decline since last December and the largest since June 2014 (7.1 percent).” Once again a lack of inventory, not motivated buyers, is slowing the pace of home sales.

U.S. mortgage apps drop – nothing to buy

CNBC article states, “If consumers can’t find a home to buy, then they don’t need a mortgage. That’s what’s likely driving the weakness in mortgage applications, which fell 3.4 percent last week from the previous week.” Applications for refinance loans also dropped 6% for the week.

S.D. home prices outpace U.S. and CA

“The San Diego County median home price reached $525,000 in April, setting a new nominal peak. When adjusted for inflation, the price is still far from the roughly $644,500 peak reached in 2005,” reports Phillip Molnar in the San Diego Union-Tribune.

May 24, 2017

County median price hits $525,000

“The San Diego County median home price hit $525,000 in April, passing the region’s previous peak reached in 2005, real estate tracker CoreLogic reported Tuesday,” according to the San Diego Union-Tribune. It’s the same combination of factors driving up prices, high demand and very low inventory. “In April, there were 4,763 active home listings in San Diego County, said the Greater San Diego Association of Realtors. That is down from 5,754 listings the same time last year and the 6,386 in 2015.”

Cheaper to buy than rent across U.S.

CNBC’s Diana Olick writes that, “Home prices continue to rise at a fast clip, faster than incomes and faster than new employment, but it is still cheaper to own a home than to rent. So why are home sales falling? Because there are crazy few affordable homes for sale.” This is true even in San Diego where the price range of “affordable housing” is much higher than in many other real estate markets. Rents are very high here too.

May 12, 2017

San Diego 4th worst for home buyers

San Diego Union-Tribune reports on Zillow’s finding that the San Diego region is the 4th worst in the nation for first time home buyers. “The worst place for first-time buyers was San Francisco, followed by San Jose and Los Angeles.”

San Diego Real Estate Newsletter – May 2017

April 30, 2017

New Listing – Carlsbad

Home For Sale - Carlsbad, CA
Home For Sale – Carlsbad, CA

IMMACULATE, Turn Key Carlsbad home. Five bedrooms, four and one half bath with 3,725 sq.ft. Home includes custom kitchen, upgraded cabinetry, canned lighting, large great room with ample sunlight and gas fireplace.

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Video

County median price $515,000

The San Diego Union-Tribune states, ” San Diego County median home price reached $515,000 in March, its highest point in a decade and a 7.7 percent increase in a year,” as reported by CoreLogic. The highest median price reported in San Diego County was $517,500 in 2005 before the real estate collapse.

April 26, 2017

Buyer frustration drops demand in U.S.

CNBC’s Diana Olick reports that, “It may be the strongest seller’s market ever, but buyer frustration is now taking its toll. Some would-be shoppers are even choosing to sit the spring market out. Demand from homebuyers fell 14 percent in March from February…”

Best U.S. housing investments for 2017

Forbes compiled a list of their top 20 areas in the U.S. to invest in residential real estate. San Diego comes in at number 14.

California pending sales slip

“Even with a strong performance in March closed escrow sales, a shortage of available homes and robust price growth that’s eating away at affordability stifled pending home sales for the third straight month, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.),” reported. In San Diego County homes priced under $700,000.00 sell almost immediately if they are priced reasonably and in fair to good condition. Homes above $700,000.00 move a bit more slowly.

April 21, 2017

U.S. existing home sales up 4.4%

National Association of REALTORS article states, ” Existing-home sales took off in March to their highest pace in over 10 years, and severe supply shortages resulted in the typical home coming off the market significantly faster than in February and a year ago, according to the National Association of Realtors®. Only the West saw a decline in sales activity in March. ”

Mortgage rates lower but “so what?”

“You can say (low mortgage rates) are a boon for buyers, but there’s a problem with that — there’s nothing to buy,” says economist Matthew Gardner in a San Diego Union-Tribune article. This is a great time to be a home seller because there’s just not much competition from other homes for sale.

San Diego Real Estate Newsletter – April 2017

April 1, 2017

Poway’s Potato Chip Rock breaks!

“Jutting from the side of Mt Woodson, 2,000 feet above Lake Poway, Potato Chip Rock is a world famous hiking destination. Tens of thousands of photos on the web prove its popularity. But ultimately that popularity was its downfall… literally. Friday afternoon a seven-foot section, the tip of the chip, snapped off and fell to the lake below making quite a splash,” reports powaynow.com.

March 29, 2017

County home price appreciation 5.7%

This San Diego Union-Tribune article discusses the S&P CoreLogic Case-Shiller Indices for January which indicates that, “Of the 20 major regions followed by the indices, San Diego ranked No.14 in January — above Los Angeles, Phoenix, Cleveland and other markets.”

U.S. pending homes sales up 5.5%

Diana Olick of CNBC reports that, “A monthly index of signed sales contracts to buy existing homes rose 5.5 percent for the month and is 2.6 percent higher compared with February 2016, according to the National Association of Realtors. This is the second-fastest pace in more than a decade.”

March 28, 2017

U.S. home prices reach 31-month high

“The S&P/Case Shiller 20-city composite index, which tracks the nation’s largest cities, gained 5.7 percent year-over-year in January, up from 5.5 percent the previous month,” according to CNBC.

March 22, 2017

U.S. home sales slip 3.7%

REUTERS reports that, “U.S. home resales fell more than expected in February amid a persistent shortage of houses on the market that is pushing up prices and sidelining potential buyers.”

County home prices up 8.1%

“The San Diego County median home price dropped 1 percent in February to $492,000,” according to San Diego Union-Tribune. Home prices in San Diego increased 8.1% over the preceding year.

March 16, 2017

Mortgage rates up

“The average 30-year mortgage rate climbed to 4.30% from 4.21% last week, mortgage buyer Freddie Mac said Thursday. That is up from 3.73%,” according to USAToday. I believe this will be a trend over the next few years as the Federal Reserve releases its grip on artificially depressed interest rates.

March 15, 2017

San Diego 7th happiest in U.S.

Patch.com reports, “Two cities in San Diego County were recently ranked among the top happiest places to live in the United States by WalletHub.”

March 14, 2017

San Diego on “worst” list

“San Diego is the second worst market for renters in the country. That’s the word from Forbes’ 2017 ranking of 46 metropolitan areas, where only Miami is worse,” according to Forbes and reported in the San Diego Union-Tribune. . Now, if you were writing an article for a real estate investors magazine the headline would be, “San Diego BEST for owning income properties.”

March 9, 2017

Mortgage rates rise

“The 30-year fixed-rate mortgage averaged 4.21%, up 11 basis points during the week. The 15-year fixed-rate mortgage averaged 3.42%, up from 3.32%.,”  according to MarketWatch. This is going to be a common theme for the next few years as the economy continues to improve and function on its own without the support of artificially low interest rates.

March 6, 2017

Where millennials want to live

” A pair of studies released this week suggests that the majority of millennials want to live in the suburbs, have already started buying outside urban areas, and base their home buying decisions mainly on affordability,” reports Phillip Molnar of the San Diego Union-Tribune.

San Diego Real Estate Newsletter – March 2017

February 27, 2017

Listing Sold – Escondido

Home For Sale Escondido
Home For Sale Escondido

Beautiful three bedroom, three bath, 2,598 sq.ft. executive home on 1.75 acres. Attached guest quarters includes bath and kitchenette. Offered for $889,000 by Pete Saxon Realty.

February 22, 2017

U.S. resales at 10 year high

Business Insider reports that, “Sales of existing condos, coops, townhomes, and single-family houses increased by 3.3% at a seasonally adjusted annual rate of 5.69 million, the highest since February 2007. Economists had estimated that sales rose 1.1% at a rate of 5.55 million, according to Bloomberg.”

February 20, 2017

Percentage of income for housing slightly higher

The San Diego Reader article by Don Bauder reports that, “Despite the staggering rise in San Diego home prices (the median is more than $500,000), the percentage of your income going to your mortgage is only a little bit higher than it was in the 1985–2000 period.” Interestingly, renters pay an average of 42% of their income for housing.

February 17, 2017

Are higher rates slowing housing?

The Wall Street Journal story suggests that. “Higher interest rates already are taking a toll on the U.S. housing market.” That may be partially true but as the article goes on to report fewer people moved setting a record low. People are most likely to purchase homes when they are feeling confident about their circumstances and not solely on current interest rates. We sold a lot of homes in the 1980’s when interest rates were well above 10%.

February 11, 2017

San Diego County prices by zip code

The San Diego Union-Tribune published two slide shows reporting the San Diego County Zip codes where prices went down in 2016 and zip codes where prices have increased since 2003. An interesting zip code is Coronado 92118 which ranked as #6 in both surveys. Home prices have gone up since 2003 in Coronado by 64.9% but in 2016 they actually fell by 3.92%.

Closed Sale – Poway

Pending Sale - Poway Pending Sale – Poway

Summerfield Estates four bedroom, two bath with 1,750 sq.ft on quiet cul-de-sac. Offered for $650,000.00.