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  • 12265 Scripps Poway Parkway, Suite 115
  • Poway, CA 92064
  • P: 858.530.2374
  • F: 858.876.1701
  • E: info (at)
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San Diego home prices are on a little rampage

blister in the sun

From the San Diego U-T yesterday, home prices have hit a five-year high in San Diego. Brokers in the multiple offer trenches are "enjoying" the insanity first-hand. Perhaps better than the article itself, was this reader comment:

Things are getting a bit frothy, but this isn't a bubble yet. There are a few things that I look at when I say that. In the areas where I look, you can buy a house and the mortgage payment is basically the same as rent. Of course there is still a down payment, property taxes and maintenance, but if a mortgage payment and rent are the same, prices are reasonable. Also, it seems that people are actually putting money down and buying within their means. No matter how you do the math, if someone can afford to buy something and chooses to pay that price, then that is the fair price. This is different from the bubble when people couldn't actually afford to buy at the prices they were paying. If (when) mortgage rates rise prices might drop since a house is more about affording the payment than the actual price. However, when that happens we are supposed to be down to 6.5% unemployment so demand should increase. Hopefully prices don't shoot up too quickly, and the Case-Schiller index is a better tool than this one that follows the mean, but for now we are just fine.


photo by: marfis75

Scripps Ranch Listing Inventory (What inventory?)

Or, as we like to say these days, comps-schmomps. That's what happens when demand exceeds supply.

This morning in Scripps Ranch? A whopping 33 detached homes are on the market; if you take away Stonebridge listings, you are left with 20. And if you are looking for an condo, the going gets tougher with a total of 8 active listings. This is good for sellers. For buyers, it's kind of a bummer.

(Source: Clarus Market Metrics, Single Family Detached Homes in 92131 Zip Code through Feb. 1, 2013)





Happy New Year (and, by the way, the Senate voted to extend the Mortgage Debt Relief Act)


Happy New Year to our three readers! 

The bad news is that my oldest daughter had to ring in the new year in the Senate Press Gallery awaiting a vote on the fiscal cliff mess. The good news is that H.R. 8, which was passed by the Senate in the wee hours of 2003, includes the following:

Sec.202.Extension of exclusion from gross income of discharge of qualified principal residence indebtedness

If you are in the throes of a short sale on your principal residenence, this comes as welcome news. Now, let's hope the House likes the idea. 

H/T to broker J. Philip Faranda for the link.

Now, go out there and kick some 2013 hiney!


My Christmas near the Fiscal Cliff


Well, it would appear that we avoided that whole “end of civilization” thingy. Phew. As one friend put it, if the Mayans were so smart, there would still be Mayans. I am relieved, nonetheless. I still have some unfinished year-end business – like posting something here before our three readers conclude that I have been abducted by evil-doers and write my off as a goner.

In the old days, back when our blog was just a baby and was fed on a more regularly basis, I relied heavily on the tax deductions I spawned for my best material, somehow finding ways to weave their wacky goings-on into real estate related musings. Alas, Daughters #1 and #2 are tax deductions no more, and I need GPS to locate them at any given moment. Over time, it has become increasingly hard to stitch amusing anecdotes together from a smattering of Instagram posts and Foursquare check-ins.

So it was that I was looking forward to this holiday season when we would finally have a quorum of the shared gene pool — a real warm blooded, nuclear family reunion! We collected #2 from at the airport on an incoming eighteen-hour flight from Madrid (the one in Spain) on the very eve of the end of the world. And having long ago relinquished my Mother of Year trophy, we plopped her on a redeye 48 hours later for some Forced Family Fun in our nation’s capitol. Child abuse? Perhaps. But holidays are times you spend with family, dang it, and ours happens to be currently strewn about like a really bad scatter diagram. She’ll get over it.

Daughter #1 is a Capitol Hill reporter and has been sequestered since August – first because of some silly elections and, more recently, because of some silly fiscal cliff. And since the idea of “A Very Texting Christmas” seemed a little, how do you say, pathetic and depressing, we decided to take Christmas to her.  

And what do a bevy of Bergs do as they dance in the frozen DC tundra at the edge of the fiscal abyss? They look at real estate, of course.

Real estate always occupies a sizable quadrant of my modest cerebral processing center, and for obvious reasons; it’s how I pay the pizza guy. But this time, I was pondering all things real estate while wearing my whimsical, “what if?” consumer hat.  That is because Daughter #1 is a renter, and calculating rents in Washington, DC requires one of those fancy calculators with an exponential function. For instance, if you were to ask what her current monthly rent is, the correct answer would be “$1.489e14.”

And that is when I remembered that interest rates are really, really low right now. As a trained professional, I also know that prices are not getting any lower anytime soon. So, assuming one had the down payment (or, as I like to call it, "my kitchen remodel”), one might be able to enjoy home ownership and a lower monthly payment – maybe something like $1.342e11.

Before I continue, I will briefly digress – like one of those little television flashbacks – and speak to our local market. (I’m doing this just in case one of our three readers lives west of Omaha and is here on purpose, not because he typed “Mayan kitchen remodel” into his search bar.)

The Case-Shiller home price index for October was recently released. In San Diego, they showed an increase in prices of 6.02% year-over-year. This was expected; we have been watching the price creep first hand as our own clients repeatedly experience the fun and frivolity of multiple offers. And by “multiple,” I don’t mean “two.” On the last two offers I wrote (on the first day the homes were on the market), there were ultimately 19 and 39 offers on the properties respectively. This has become our new normal.

Inventory is a real problem for us right now and, while we should see the usual increase in offerings after the holidays, I don’t expect the increase in inventory to be dramatic – at least not dramatic enough to satisfy the latent buyer demand.  In Scripps Ranch this morning (92131 Zip code), inventory is the lowest I remember since February, 2003. If you exclude Stonebridge Estates, there are 19 detached homes and 4 attached homes on the market – this from a total inventory on the ground of approximately 8,000 and 4,000 homes respectively.

Now, here is what I think we will see as we turn the corner into 2013. The supply side of the equation will get slightly better, but the overall supply/demand curve will still be off kilter, so prices will continue to rise, albeit gradually. The other thing I anticipate is longer market times, a by-product of what one of our agents calls “seller greedy eyes.” All of the buzz about rising prices will cause many sellers to be a little too over exuberant in their pricing, which will in turn cause buyers to resist.

Having dispensed with that bit of local flavor and prognostication, back to our regularly scheduled programming. I am a licensed broker in California; not so in Washington, DC.  And like any good do-it-yourselfer, I had a bit of a learning curve while familiarizing myself with real estate on foreign soil. Here are a few of the things that I learned while I was wearing my civilian clothing:

1.     Brokerage and agent sites that have a home search feature without a map search should be immediately nuked, as they are completely worthless to me. Yes, I am talking to you, big brand name brokerage! It's not hard; even little old San Diego Castles maps searches. You see, being 2500 miles away (give or take), I do not know U Street from 17th from North Capitol. A listicle is useless. On the other hand, I can find my daughter’s current home on a map, as I can find the public transit stops, the Capitol where she flashes her press badge every morning, and the Trader Joe’s she likes to frequent.

2.     Zillow’s data sucks just as much in The District as it does in San Diego. I knew that going in, of course, so I purposely avoided Zillow when I set out on my online window shopping expedition. However, as I was initially relying, as so many do, on the old Page One Google search returns, and given that the search results on the broker/agent sites read like the phone book, I eventually found myself on Zillow where I was forced to resort to a tedious forensic process. The process involved finding a home that met my search parameters, scouring the page with my magnifying glass to discover the listing agent and, if I was lucky, a link to his site, and following the link to discover that the home was either under contract or had sold during the Reagan administration. Out of shear frustration and fearful that I might die of old age before I uncovered a real listing, I remembered that…

3.     Washington, DC’s MLS, MRIS, has a consumer-facing website that rocks. And I mean “rocks” as in the information is time certain, correct, complete, and map based. Our own Sandicor does too, by the way, but you won’t find either site in your Page One search results, so you have to know (or remember) to go looking for them.

4.    Our San Diego closing costs are starting to seem downright cheap. Our rule of thumb for buyer closing costs in San Diego is 1% of the purchase price, not including loan fees or points. In DC? A minimum of 2.5%, I am told. As an example, here sellers generally pay for owner’s title insurance (the buyer pays for lender’s title); there, the buyer gets the honors for both. Their recordation tax alone is 1.1%. Yikes-a-rama. Make that two kitchen remodels.

5.    Real estate is local. OK, I didn’t learn that. I already knew that, but I was reminded in a big way. Their seasonal swings are different (if for no other reason than they have seasons), and their market swings are less wild in general, which I think has more than a little to do with all of those government jobs. Plus, this suburban California girl has a lot to learn about urban living. Stuff like co-op versus condo, presence or absence of an elevator or parking space, and (get this) distance to a thing they call “the Metro” all factor into value. I have a new appreciation for Walk Scores. And attached garages.

I don’t know how Kris’s Big East Coast Real Estate Adventure will end (I am still in the tedious “discovery” phase), but there is one thing I do know. Washington, DC is flipping COLD in December! You couldn’t pay me enough to be one of those snipers on the roof of the White House when it is sleeting sideways, even with the unobstructed view of Bo frolicking in the Rose Garden. Which is why I am fairly certain that if there is another crisis at the Capitol during the holidays next year, Daughter #1 will have to settle for “A Very Skyping Christmas.”


Partying like it’s 2003. Multiple offers – Aargh!

“What’s going on inside that house?” passers-by wonder. “Is it Black Friday again? Do they have cheap TV’s or free iPads? Is someone throwing a party, and we weren’t invited? Or maybe all those people are still waiting to vote. No, wait. That was Florida.”

Nah. Nothing to see here. It’s just a new listing.

Lately, those of us who commit random acts of real estate for a living have been partying like it’s 2003.  And by partying, I mean we have been spending our days and evenings and weekends lining up in various driveways waiting our turn to set our lascivious sights on a real, bona fide house for sale.

There aren’t many of those lately – houses for sale. And as we turn the corner on the brave new year of a recovering real estate market, the shortage of inventory will remain our biggest albatross.

Any agent with buyers in tow knows that the first thing one does when one sees a new listing hit the market is call the listing agent.

“How many offers do you have?” the buyer’s agent asks sheepishly, while simultaneously clinching a rabbit’s foot, rubbing Buddha’s belly, tossing a little salt over the shoulder, and praying for, if not redemption, a bit of good fortune. And granite counter tops.

“But we have only been on the market for seven minutes!” the listing agent replies.



OK. So I made that up. Sometimes the answer is “nine” or “fifteen,” but you get the idea. Supply and demand are just a teensy bit out of whack.

This morning in Scripps Ranch, for instance, there are a total of 27 detached and 8 attached homes on the market. Total homes on the ground? About 12,000. The last time I saw numbers like this was in 2003. Back in those days, God help you if the yard sign installer drove within five blocks of your home. The result was a thundering herd of agents and their buyer clients hurling purchase offers at your front door… just in case. People were afraid to roll their trash cans to the street lest they return accidentally under contract.

Multiple offers. Aargh! I have been on both the sending and receiving side too often lately. And believe me when I tell you that “fun” doesn’t begin to describe it, unless you consider watching the hopes and dreams of a dozen first-time buyers being extinguished in casual, reply-to-all fashion to be a real laugh fest.

So what is a would-be buyer to do? There is no magic formula to getting your offer accepted in a multiple situation, of course, but there are some things you should consider in order to have a fighting chance.

1.     Do NOT wait until you find your dream home to sit down with your agent and go through the contract. You won’t have time.  Do a dry run before you start looking. Familiarize yourself with the forms and the process. That way, when the time comes, you will be ready to point and shoot. Speed counts.

2.     Do NOT wait until you find your dream home to begin considering how nice the neighbors are, how great the local school test scores are, and how competitive the prices at the nearest dry cleaner might be. You won’t have time. While you are driving the commute route in the morning, the evening, and on weekends just to “make sure,” while you are canvassing the neighbors about barking dogs and other demographics, and while you are polling your friends and coworkers about the merits of homeownership in light of recent events in Syria, someone else has purchased the darn house.

3.     Do NOT wait until you find your dream home to submit all of your documentation to a lender. New listings – the good ones – last hours, not days or weeks. And no one will look at your offer without a solid pre-approval letter tethered to it.

4.     Comps, schmomps. Of course you need to understand neighborhood values and comparable sale prices. But do not forget that we are in an (albeit gradually) appreciating market. Granted, there are some external unknowns that may impact our real estate market (rising interest rates, fiscal cliffs). But, for the foreseeable future, prices are not going down. More to point, when there are many, many offers on a home, offering below asking price is not a good strategy, because the fact that this home at it’s current price and condition has attracted numerous interested buyers should tell you something about perceived market value. You aren’t going to steal it. Either you want it or you don’t.

5.     A home is worth what it is worth to you. Let me explain. I recently had clients ask me what the “right” price was for a home they were interested in, what it was “worth” – this, a home that already have four offers. A home is ultimately worth what a buyer is willing to pay, and with multiple offers, it will be worth something different to different people. The “right” price in a multiple situation is the price at which you would be happy to consummate the purchase if selected but would be comfortable sleeping nights knowing you gave it your best if your aren’t. In other words, take your best shot. You are not operating from a position of uber-strength here. The whole “let’s leave a little room for negotiating” strategy is not necessarily the best strategy in multiple offer scenarios, as you may never get the chance to don your Donald Trump hat.

6.     Do NOT muddy your offer with stupid stuff. If the seller says that their washer and dryer do not convey, do not write an offer asking for the washer/dryer, the pot rack, the sectional sofa and the family schnauzer. And give them stuff that doesn’t cost you anything – shorter timeframes or a larger deposit. Sometimes, it comes down to the devil being in the details.

7.     Pick a good – no – a GREAT agent. I cannot emphasize enough the importance of having a seasoned, experienced agent on your side. You see, a whole lot of stuff goes on behind the scenes. A great agent is lobbying for you – groveling, even, on your behalf. They are talking to the listing agent (I know; it’s crazy) — about the seller’s expectations, wants and needs, and about the nature of the competing offers before writing the offer so that yours might have the best chance of standing out. They are following up after submittal – to confirm receipt, yes, and to answer questions and generally ensure that, worst case, you get a counter offer. It is their job to try and keep you in the game. And the offer has to be well written. As a listing agent, I am always amazed at the offers I receive that are incomplete or incorrectly filled out. I am amazed at how many offers mysteriously show up in my inbox with no warning – no call or communication from the agent prior to or after submittal. This kind of stuff puts a buyer at a disadvantage, because no listing agent wants to work with a buyer’s agent that appears to be less than competent. They are going to have to live with them for the next 30 to 45 days.

Do all of these things, and you may still end up on the losing end of a multiple offer situation. If you need a loan and three other buyers are sitting on buckets of gifted cash, there simply isn’t much you can do about it. But, do these things, and you will have at least have a decent shot. 

photo by: Libertinus

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Office Location

  • San Diego Castles Realty
  • 12265 Scripps Poway Parkway, Suite 115
  • Poway, CA 92064
  • P: 858.530.2374
  • F: 858.876.1701
  • E: info (at)
  • CA BRE# 01853496

Broker Information

  • Kris Berg, Broker
  • CA BRE #01241572