Strongest seller's market ever!!

lnc

Well-known member
Also looks like a few smart realtors caught on to USCT's selling strategy. :)
http://www.cnbc.com/2017/04/24/spring-housing-strongest-sellers-market-ever.html

Spring housing: 'Strongest seller's market ever'

Even as more homes come on the market for this traditionally popular sales season, they're flying off fast, with bidding wars par for the course. Home prices have now surpassed their last peak, and at the entry level, where demand is highest, sellers are firmly in the driver's seat.

"I've been selling real estate for 25 years and this is the strongest seller's market I have ever seen in my entire real estate career," said David Fogg, a real estate agent with Keller Williams in Burbank, California. "A lot of our sellers are optimistically pricing their homes in today's market, and I have to say in most cases we're getting the home sold anyway."

Fogg listed a three-bedroom, two-bathroom, 1,240-square-foot home in Burbank for $789,000 and had three offers before the first open house Sunday. In the Los Angeles-area market, that is considered an entry-level home. The open house drew more than 100 potential buyers, most of them already weary of the competition.

"It's very tough. Most of the listings are intentionally listed a little low to get a lot of attention, and it's not uncommon to get 12 to 16 offers on one property," said Jilbert Mosessian, who has been renting in the neighborhood but wants to buy. "In three properties recently, we did our best, we went considerably over the listing price, and we were told that there were still five people above us and they were only going to deal with them."
 
lnc said:
Also looks like a few smart realtors caught on to USCT's selling strategy. :)
http://www.cnbc.com/2017/04/24/spring-housing-strongest-sellers-market-ever.html

Spring housing: 'Strongest seller's market ever'

Even as more homes come on the market for this traditionally popular sales season, they're flying off fast, with bidding wars par for the course. Home prices have now surpassed their last peak, and at the entry level, where demand is highest, sellers are firmly in the driver's seat.

"I've been selling real estate for 25 years and this is the strongest seller's market I have ever seen in my entire real estate career," said David Fogg, a real estate agent with Keller Williams in Burbank, California. "A lot of our sellers are optimistically pricing their homes in today's market, and I have to say in most cases we're getting the home sold anyway."

Fogg listed a three-bedroom, two-bathroom, 1,240-square-foot home in Burbank for $789,000 and had three offers before the first open house Sunday. In the Los Angeles-area market, that is considered an entry-level home. The open house drew more than 100 potential buyers, most of them already weary of the competition.

"It's very tough. Most of the listings are intentionally listed a little low to get a lot of attention, and it's not uncommon to get 12 to 16 offers on one property," said Jilbert Mosessian, who has been renting in the neighborhood but wants to buy. "In three properties recently, we did our best, we went considerably over the listing price, and we were told that there were still five people above us and they were only going to deal with them."

I don't quite agree (I'm speaking for the Irvine/OC market though)...2013 was much hotter year with prices increasing at a faster rate because of the lack of new homes and for several months only 1 months worth of inventory on the market.  We saw prices in Irvine increase about 20%+ in 2013.
 
How's the market thus far?  Seems like they still sell quick at the market price.
 
jmoney74 said:
How's the market thus far?  Seems like they still sell quick at the market price.

Definitely a strong seller's market in the sub $800k-$900k world mainly due to a lack of resale inventory and a lot of buyers.  So yes, anything prices around comps that looks decent or better will sell fast.  That being said, buyers seem to be more selective on not bidding too high for even nice properties or properties that have negatives like poor condition or backing up to a busy street.  You are seeing prices grind higher today but in 2013 prices went up quickly.  Part of that could be there is more resale inventory today (about 2 months vs 1 month) and more new home options to pick from than there was in 2013.  I joke with my clients that new homes are today's new shadow inventory. 
 
2010-2013 "Crash Buyers" - those who ventured out in the rough days to buy flips, distressed, and marginal properties (mostly sub $600k homes) are for the most part looking to move up. Families have grown, 401k's have recovered, and that $500k starter home is now worth a great deal more than what they paid for it in 2011. Those owners are now trying to leg up into the $800k-$1m price range and there just isn't the housing stock available to meet demand.

The $800-$1m value property owners are for the most part wanting to move to the $1.2m to $1.5m price - a very big leap of faith IMHO for most home sellers. There's a pretty big mental wall to climb when the sales price has a six figure starting point. Qualifying guidelines for a $1xM home are much different for Agency pricing level homes. Once these owners are settled into the idea first that they can afford a $1.xM home, then inventory may bend back to normal.

My .02c

Soylent Green Is People
Head Chef, Soylent Corporation
 
Soylent Green Is People said:
The $800-$1m value property owners are for the most part wanting to move to the $1.2m to $1.5m price - a very big leap of faith IMHO for most home sellers. There's a pretty big mental wall to climb when the sales price has a six figure starting point. Qualifying guidelines for a $1xM home are much different for Agency pricing level homes. Once these owners are settled into the idea first that they can afford a $1.xM home, then inventory may bend back to normal.

My .02c

Soylent Green Is People
Head Chef, Soylent Corporation

Interestingly enough, most move up buyers (from $800k to $1.xM) I know have left Irvine to get more bang for their back.
 
USCTrojanCPA said:
I don't quite agree (I'm speaking for the Irvine/OC market though)...2013 was much hotter year with prices increasing at a faster rate because of the lack of new homes and for several months only 1 months worth of inventory on the market.  We saw prices in Irvine increase about 20%+ in 2013.
Beginning of 2013 to Summer 2013 was a large leap, at least for resale.

I don't have YF data, but I was tracking prices more then and they did jump quite a bit, which was interesting because this was when the first GP hood went up for sale, Pavilion Park.

I'm not sure if that was more than the last year or so... looking at starter SFRs now compared to back then, it seems like a resale 4/3 SFR that sold high at $750 then, is going for over $825k now. And new starter SFRs are even higher.

I recall when the standard 4/3 SFR TIC plan like Piedmont used to go for ~$750k (Mendocino?) and that had a driveway and sidewalk.  Although my memory is a bit fuzzy and I may be remembering this wrong... I should do a TI search.
 
Yeah, 2013 was a crazy time.  All the new builds, does not matter which neighborhood nor price level,  all have long wait list. 

I thought 2017 wound be more of a neutral market but those entry level home with reasonable MR are still selling like crazy. 

 
meanwhile, it seems that the market for 1.5+M, or anything around  4000 sq ft  or bigger is quite slow. Seems like there's a lot of supply over 2M price that just sits and sits.

I see some ~4000 sq ft resales going about 400-425/sq ft in the Irvine area.



 
OCLuvr said:
Is it an indication of slow down or Chinese govt's action?

I think this is more of an indication of greedy builders building way too many high end/high margin product vs entry level/low margin homes. That is why we have a bifurcated market. High end is slow and low end is hot. It's simply supply and demand. There just aren't that many buyers in the 2-3 MM range.

Look at all the 1.5-2 mill product in OH and great park. Not to mention the new lennar/toll coming to Altair. I would venture to guess much of the demand in the 2-3 mill market has been met and builder will have trouble selling these homes in the next couple years.

That said, homes priced well are still selling. Homes in Turtle rock and northwood pointe priced near comps are selling quickly. People fishing with high asking prices(OH Trevi and La Vita) aren't seeing any action at all.

I don't think you'll see any meaningful price appreciate in the high end for a while - until new home supply dries up.
 
nyc to oc said:
meanwhile, it seems that the market for 1.5+M, or anything around  4000 sq ft  or bigger is quite slow. Seems like there's a lot of supply over 2M price that just sits and sits.

I see some ~4000 sq ft resales going about 400-425/sq ft in the Irvine area.

High end is definitely stalling. Although I think even here if the product is unique, it will still move.  True bargains are an oxymoron given how flush the market is - late cycle economy, full employment , stocks at new highs.  But few ppl are over reaching (unlike 2006) .  this is precisely why this cycle has longer legs and while prices may stall here for a bit , those hoping for a decent sized correction in the desirable homes may be disappointed.  You can always find WTF homes that end up selling 10-15% off initial list , but thats not what I am referring to here. 

The day you see a general consensus building that now is the best opportunity to buy , it will be time to cut and run.  but we are some ways away from that. 
 
OCLuvr said:
Is it an indication of slow down or Chinese govt's action?

Trust me when I say this....the money is still coming over from China (I've seen enough FCB bank transaction detail from their 2017 statements to know it for a fact).  It's just not coming in huge chunks, more like multiple amounts just under $50k each week or so. 
 
fortune11 said:
nyc to oc said:
meanwhile, it seems that the market for 1.5+M, or anything around  4000 sq ft  or bigger is quite slow. Seems like there's a lot of supply over 2M price that just sits and sits.

I see some ~4000 sq ft resales going about 400-425/sq ft in the Irvine area.

High end is definitely stalling. Although I think even here if the product is unique, it will still move.  True bargains are an oxymoron given how flush the market is - late cycle economy, full employment , stocks at new highs.  But few ppl are over reaching (unlike 2006) .  this is precisely why this cycle has longer legs and while prices may stall here for a bit , those hoping for a decent sized correction in the desirable homes may be disappointed.  You can always find WTF homes that end up selling 10-15% off initial list , but thats not what I am referring to here. 

The day you see a general consensus building that now is the best opportunity to buy , it will be time to cut and run.  but we are some ways away from that. 

Bingo, I have friends who are waiting for that 10%+ correction in the market and almost every buyer that I talk to asks me if it's a good time to buy because they think we are at a top.  People are not buying garbage like they were in 2005-2007, many buyers are being patient and picky and not willing to big much over previous comps.  Heck, look at the properties that I sold with multiple offers this year (especially sub-$800k)....none of them went way over recent comps, more like 2-3% over.  Story still remains being one of a lack of resale inventory in the sub $800k market along with a tailwind from the economy and low mortgage rates.  Wait till Irvine is done building new homes, then you'll start seeing price moving up as those new home buyers will have nowhere to go other than looking at the resale market.
 
The option facing many buyers is to purchase an older home that needs work or get a detached townhome that is turnkey in a more desirable neighborhood, Hicks said.

That?s what Faryar and Kelsey Borhani ended up doing. The Los Angeles couple, who had been house hunting since October, had their sights set on buying a house with a yard in Irvine, and in particular, Quail Hill. But prices were too high, and still, the homes were moving fast.

?Something would come on the market, and within three or four days, it would be gone. It was just crazy,? said Faryar Borhani, 29, a management consultant.

Three or four homes the Borhanis were interested in sold before they could get a showing. They attended two open houses, only to discover the homes already were in escrow. When a four-bedroom, 2,400-square-foot attached home came on the market in Quail Hill, the Borhanis decided to act, even though it wasn?t a house and didn?t have a yard.

They ended up getting their offer in faster than the other bidders, paying $990,000 ? $20,000 over the asking price ? and putting up all their savings, plus some money from their parents, so they could make an all-cash offer.

The deal closed April 18, and the Borhanis moved in last Friday.

?You have to be willing to make some compromises,? Faryar said. ?You have to be quick. You can?t wait on it.?
http://www.ocregister.com/2017/04/25/spring-homebuying-surge-pushes-housing-prices-to-record-highs/
 
agree...in today's market we have to make compromises if we want to buy. We have a wish list of things in the  new house, but getting them all or even 3/4 of them in current market with its steep prices is very tough.
 
Goriot said:
http://www.latimes.com/business/la-fi-spring-market-20170425-htmlstory.html

It just feels home activities near LA are much hotter then Irvine at the moment due to a lack of new construction homes and scarcity of available land.

Yup, Irvine has that "shadow" new home inventory which is keeping prices somewhat contained.  When they are done building new homes in Irvine, we got higher in prices....mark my words.  Watch inventory levels, that'll be your tell of where market prices might be heading.
 
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