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  • San Diego, CA 92131
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National Housing Stats and Lost in Translation

 

Photo credit: By chokola

The National Association of Realtors® (NAR) released their home sales statistics for July. This data is for all property types and reflects homes sales nationally. And According to NAR, the national median existing home price was up 9.4% July over July, while the number of existing home sales was up 2.3%.

As my local news ticker (I call him “Steve”) was reporting NAR’s numbers, real time, as they were reported to him by a perky morning news anchor, I was reminded that national statistics are just that – national. They are relatively meaningless to the couple three blocks away that is trying to sell their house, and they are meaningless to the buyer in my backseat trying to pin a value on the home they just visited.

So, just for giggles, I ran the July numbers for a few San Diego I-15 Corridor Zip codes to see how we stacked up. (Information is from the Sandicor Multiple Listing Service, all property types, July 2012 versus July 2011. Data is deemed reliable but not guaranteed, blah, blah, blah.)

Zip Code Homes Sold Change Median Price Change %Detached Sales 2012 %Detached Sales 2011
92131 (Scripps Ranch) +14% +1.2% 68% 67%
92128 (Rancho Bernardo) +57% +28% 58% 48%
92127 (4S Ranch) +13% +28% 80% 73%
92126 (Mira Mesa) +15% -6% 60% 71%

You can see that the overarching, “Everything is just ducky, thanks,” message from NAR generally holds true in these San Diego communities, with Scripps Ranch most closely tracking NAR’s national numbers. But, the numbers do vary widely.

The increases in numbers of homes sold are no surprise to those of us in the trenches. We’ve had quite the summer rally. What surprised me was the magnitude of the price changes in Rancho Bernardo and 4S Ranch. But this is where you have to consider the dangers of lumping property types.

The one thing that stands out is that we are comparing apples and bananas in 92128 and 92127. A higher mix of single-family sales in these areas, of course, resulted in a higher median sale price. In Scripps Ranch, where the percentage of detached versus attached sales remained relatively unchanged, so also did the median sale price. And in Mira Mesa where attached homes represented a bigger piece of the pie in 2012, the median price dropped.

The point then, assuming you are still awake, is that broad-brush statistics are fun and great, and can give us a feel for what’s going on. But, statistics alone lack soul. In order to know how your market is doing, you can’t rely on NAR, on Case Shiller, or even on my little MLS exercise without human intervention. Housing numbers require interpretation, and only a real human being entrenched in your local real estate market can provide the context.

Which brings me to the Zestimate, Zillow’s now-infamous “estimated market value.”

Last week, Steve and I represented three clients in closed transactions. Next week, we have four more closing. And while a discussion of Zestimates slapped onto the end of a discussion of NAR’s housing data may seem only loosely tangential, this was a good time for me to compare Zestimate accuracies – before they pick up the tax recordings and the Zestimates reset to sale price. And the comparison is relevant because it underscores the dangers in relying on data without soul, without human intervention to provide context. (Yes, real estate agents are, generally speaking, human.)

For our three closings last week, Zillow hasn’t picked up the recordations yet. I should also note that two of these were our listings, and we no longer gift our listings to Zillow. Similarly, in the case of the one buyer side, that listing agent does not syndicate to them. In other words, Zillow does not reflect these homes as for sale or having been listed, but they do provide a Zestimate for each.

Address Zestimate Sale Price Difference Days on Market
10555 Arbor Park Place, 92131 $582,989 $651,000 +12% 5
7696 Andasol Street, 92126 $429,472 $457,000 +6% 4
10528 Stony Ridge Court, 92131 $627,500 $689,000 +10% 3

You can see that the reality of our market was just a little off the opinion of the Zestimate algorithim.

As for the homes closing next week, all our listings, here is what the differences will look like.

Property Zestimate Sale Price Difference Days on Market
#1 $275,884 $300,000 +9% 4
#2 $669,258 $735,000 +9% 3
#3 $908,023 $960,000 +6% 11
#4 $369,421 $352,000 -5% 5

With the exception of one little condo, the Zestimates were all significantly lower than the buyers’ opinions of value, and it is only the latter that counts. You may think that 9% sounds close enough, but $25,000 – or $65,000 – sounds like a lot of money to me. And it is a lot of money to our clients.

Finally, and as a preemptive strike to those who might claim that our selling clients are being somehow being wronged by not having their listing data outsourced to third party syndicators like Zillow, I threw in the bonus market times. And in the case of all seven homes, I should point out that there were multiple offers – on every single one.

NAR is right, at least where our San Diego market is concerned. We do seem to be turning a corner. Our shortage of inventory coupled with continuing favorable interest rates is not an insignificant factor. We’ll have to wait and see how rising interest rates, a Presidential election, a fiscal cliff, or other external factors might affect us moving forward. But if you want the real skinny as it relates to you – your neighborhood and your home – look not to national stats or a mysterious home valuation program. Talk to somebody in your hood. Your mileage may vary.

 

 

Hitting Bottom, Barstow, and Scripps Ranch Market Times

 

According to the Wall Street Journal, the “housing bust is over.” Phew! That’s a relief.

This article ran last week so, technically, the housing bust was over on July 11. I suppose I was just too busy writing multiple counter offers to notice.

Those of us in the trenches have been seeing all of the signs of a recovery. Or maybe what we have been seeing is summer. It could go either way. But the funny thing about tops and bottoms, peaks and valleys, is that you can’t really know you are there when you are there.

Take those brave pioneers who, for whatever reason, decided it was a good idea to head across the California Mojave desert on foot. They, too, probably thought they had hit bottom when they got to Death Valley. And then they stumbled upon Barstow.

Death Valley, Barstow. Whatever. It’s close enough. I actually tend to agree that, while we may be trudging through the tumbleweed for a while yet, we’re pretty much there.

Our most recent listings have all gone with multiple offers. Last week, I entered a listing in our MLS at 6:00 am. At 5:00 that evening, I got a call from an agent. “How may offers do you have?” she asked. My answer: Five.

Which brings us to this installment of Stats Man.

Today Stats Man looks at market times and, since we long ago established that Stats Man is lazy, it will come as no surprise that this information is for the Scripps Ranch, 92131 Zip code. (Disclaimer: Information is from the Sandicor Multiple Listing Service. Information is deemed reliable but not guaranteed. Dry clean only, do not use this data while operating heavy machinery, for external use only, void where prohibited.)

I took a quick look back at detached homes sold in Scripps Ranch over the past thirty days. Note that I eliminated the short sales, because their market time continues to rack up while they are relegated to the purgatory of “contingent” status waiting for lender approval. I also eliminate the couple of homes that were new construction, builder offerings. That being said, here is what the market times looked like:

Average Days on Market: 32

Average Price per Square Foot: $268

That was fun. But what is more fun is to look at what happens when you eliminate the homes that were overpriced. How do I know which homes were overpriced? Those would be the ones that had to go through one or more price reductions before they found a taker. Duh.

Average Days on Market: 13

Average Price per Square Foot: $287

Now, as a preemptive strike for all of you naysayers, the price spectrum in each sample was roughly the same. In other words, you can’t say that more expensive homes generally have longer market times. They don’t. At least, they didn’t over the past 30 days.

In summary, what we have here is two messages. First, I will beat my favorite drum. It you price it tight to true market value — if you price it right — you will sell faster and for more. Period.  

OK. So we knew that. The other message is a reminder that there are buyers out there – a whole bunch of them. And the activity we began to see in early spring is continuing, even escalating, as we head into the dog days of summer.

Are we in Death Valley or Barstow? Beats me, but we’re close enough.

Editor's Note: The opinions expressed in this post about Barstow do not necessarily reflect the opinons of San Diego Castles Realty. It is a fine town. Really, it is. (Not to mention, it is halfway to Vegas.) They have a Bob's Big Boy. I highly recommend the Brawny Beef combo.

 

Give us your listings and no one gets hurt.

I remember an old joke from years ago, although I have probably butchered it over time as the old brain cells have moved well beyond their half-lives. It's a joke about picking your argument.

A man faces his accuser in court, the victim of an attack by a big, black dog. “It couldn’t have been my dog, because I don’t have a dog. Besides, my dog doesn’t bite. And he’s white.”

Just give us the damn listings, already, and no one gets hurt.

As reported by Inman News, that’s the appeal that Zillow sent this week to Multiple Listing Services (MLS’s) across the country.

Back in May, I wrote about the real elephant in the listing syndication room – content. So this appeal by Zillow for free content comes as no surprise. Except for the part about having the huevos to lay their cards out in such a matter-of-fact, cut-to-the-chase manner.

Just give us the listings, already.

Maybe the whole coercion angle wasn’t working quite as well or as swiftly as they had hoped. Just last month, the former friends-of-the-agent I applauded in those more innocent, salad days, were insisting they didn’t have a dog in this fight. “The home buying and selling public demands that your listings be gift wrapped and shipped directly to Zillow. You owe it to your clients. Do it for the People!”

Except it’s not about the People at all. It is about the “agent wallet,” that big pot of gold that catapulted the company into IPO stardom. It’s about shareholders, profitability, and future earnings.

All the fancy algorithms and questionable Zestimates and whimsical blogs about celebrity houses in the world will not keep the agent wallet in the house without the listings. Because, it is the listings that buyers and sellers want to see. And it is the buyers and sellers looking for those listings that the agents are after.

Apparently, the argument du jour is that by simply going to the source — the MLS’s — Zillow’s pesky problems with data integrity can be readily solved. And so they could. My own future earnings could also be greatly enhanced if Nordstrom simply shipped me their entire fall line so that I might set up my own little marketplace on eBay. But, I am smart enough to know that they wouldn’t just send me their stuff for free. Nordstrom would probably want something in return.  It’s crazy, I know.

It’s the content, stupid. And Zillow has a bit of a mess on its hands right now. Some feeds come from brokers; others come from individual agents. Much of the listing data they do have is out of date, incorrect, misattributed or otherwise misrepresented. And, with more agents and brokers opting out of the whole thing, the data set is incomplete.

The real estate agent community is a tough one to corral. There are too many of them and, as any broker will tell you, it’s a revolving door. There is the constant need to recruit, train, rinse and repeat. Where populating a site is concerned, better to just cut out the middle man, that little guy, the agent community that you once ferociously courted in order to gain the necessary traction to publish that prospectus.

In May, I quoted my daughter, the journalist. “It’s stupid to give away your content for free.”

Indeed.

The MLS’s are the department stores of real estate. They run the showrooms that display the wares of all of the individual designers – the agents. It is stupid to give away your content for free; it is even dumber to give it away only to have to repurchase the rights to what was yours to begin with.

And I am certain that, if not the agents, the MLS’s across the country get this.

They do, right?

American Home Buying Day revisited

Steve penned this little gem about five years ago, shortly after Jim Cramer called the bottom of the housing market. 2007, 2012. Tomato, tomahto. Close enough, if you ask me.

The point is that, lately, we have been feeling like American Home Buying Day is finally here. Now all we need are some homes to show the buyers.

nhbd.jpg

The Declaration of Independence 

If we had a dollar for every time… How many times have we said that? At the risk of compromising our street cred, this latest one is for real. Well, actually, it's not the latest, as we have been hearing it for about twelve months running. We hear it when we are holding an open house, at the grocery store, at a school function and even at the gas station. We hear it from the prospective buyers. After asking us, "How long has it been on the market?", "Why are they moving?", and "Is there going to be a price reduction soon?", we inevitably hear the next declaration.

"I think I'll just wait SIX MONTHS."

A thoughtful explanation invariably ensues. "My (dentist, Uncle Phil, barber, therapist, insurance guy, mailman) says that in SIX MONTHS it will be the right time to buy." Of course, these experts have it all over Jim Cramer from CNBC who, as our alert reader "Rido" pointed out, identified next March as the bottom of the market and, therefore, "the time" to buy homes again. The Federal Reserve Board, most economists, and even the National Association of Realtors have yet different opinions, but what do they know? Naturally, the smart money is on Uncle Phil.

Six months, six months, six months… There are so many people waiting to make a home purchase, and all of these people seem to be zeroing in on a single day 182 1/2 days from now. You heard it here first: All hell is going to break loose.

The one thing we most need in this current market is certainty. Thankfully, we seem to have a quorum and a consensus. All seem to agree that the optimum buying time-frame is six months. The only remaining question is, "Six months from when?"  

We the People

Somebody has to take a leadership role. So, we are here to bring sanity to the table. A moving target causes angst, it causes frustration and it results in undue stress and premature graying. Wishy-washy targets benefit no one. We need to establish the exact day on when it will be okay for the ever-growing gridlock of buyers to safely venture from the sidelines.

Therefore, let it be known that, in order to create a more perfect union, the time begins now. Six months from today is May 15, 2008. If the barber, the dentist, Uncle Phil, and other studied pundits in our collective spheres of influence are all correct, do you have any idea what will happen on this date? It will be chaos.

Society Without Government

The latent demand is just too enormous, and anarchy can get ugly. Remember the debut season of Tickle Me Elmo? Imagine, then, a day when throngs of home-seeking buyers take to the streets finally ready to call dibs on their favorite home (you know the one – "model-perfect", "priced to sell" , "bring all offers", "koi pond conveys"). And, then, they will proceed to beat the crap out of each other with their respective Zestimates. In order to avoid this impending doomsday scenario, we need to bring not just certaintly but order to the process.

Hail to the Chief

That's why we propose May 15 as our newest National Holiday, "American Home Buying Day". This way, we can all count on it and plan accordingly. Government agencies can coordinate traffic control and emergency personnel. Costs to the taxpayers can be offset by selling strategic advertising, such as "593 Shady Sunset Happy Place Lane brought to you by Jim's Discount Tire and Mortgage." Real estate agents will have lotteries to determine in which order their clients will get to see each home. "Number three-zero-six: Please report to "Lovingly Maintained 4BR Plus Bonus Room, Owner May Carry." Thinking about it, this is so much better than the arbitrary way we do business now, just showing multiple and random homes, willy-nilly, over the course of months and months. Now, the conversation will be much different. Buyer: "Can we see the home this weekend?" Agent: "No, you'll have to wait until American Home Buying Day. Take a number."

America was made great by increasing efficiency which led to enhanced productivity. Eliminating all but one day a year to buy a home will do the same thing. It's the six-month solution. We will fly our flag proudly, in the colors of Sienna Sand and Arizona White.

What a great country!

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Office Location

  • San Diego Castles Realty
  • 10636 Scripps Summit Court, Suite 153
  • San Diego, CA 92131
  • P: 858.530.2374
  • F: 858.876.1701
  • E: info (at) sandiegocastles.com
  • CA BRE# 01853496

Broker Information

  • Kris Berg, Broker
  • CA BRE #01241572