We noted how there aren’t many of the newer one-story houses for sale.
When they do hit the open market, they tend to blow out – three of the last four sales of this 2,100sf plan in Santa Fe Trails in Carlsbad have sold over list price. The previous high sale of this model was $1,100,000 in 2018, so they listed this one on the range $1,125,000 – $1,150,000, figuring they could get a little more:
With our tight inventory and ultra-low mortgage rates, it kinda feels like Tesla stock. One minute you’re in the $800s, and the next thing you know, the same house is in the $900s!
What can buyers do?
Buy location.
Don’t buy crap.
Simple enough, right?
But it’s hard to accomplish both, because the best locations have the oldest homes.
Let’s narrow it down further.
If you can afford a decent location, what else can a buyer do to ensure a smart purchase?
Buy a newer home, and/or buy a one-story home.
Newer: Homes built in the last 15 years typically have modern floor plans with a large open great room and lots of windows that allow for ample natural light. When you go to sell it someday, it will still be a desirable home without a load of upgrading or maintenance costs to you.
One-Story: Boomers aging in place guarantee that the scant supply of one-story homes will stay tight, and those that do leak onto the open market will be hotly contested.
Here’s a good example.
This sold for $850,000 two years ago, and after a complete remodel it goes on the market for $1,149,000…..and they get multiple offers. Those who thought they could still buy a nice house in Old La Costa in the $800,000s are really scratching their heads now! But it had the good location, and the sellers added the new look to clinch a nice boost in value.
If you want to stick with a newer house and/or a single-story house, what are your chances?
Price Range
# Listings
# Built Since 2005
# One-Story
# One-Story Built Since 2005
0 – $1M
28
5
6
0
$1M – $2M
184
45
42
6
$2M – $3M
163
42
54
8
$3M+
266
100
79
24
Buying a newer home or a single-story really looks daunting now, but if you can pull it off, you got it made!
Insisting on a newer home and/or a one-story home will give you maximum assurance that you’ve made a smart buy that will appreciate better than the rest. We can add a few older homes that have been thoroughly remodeled, but they probably still have a floor plan cut up into smaller rooms with low ceilings.
The same buyer who qualified for a $810,000 loan amount just 15 months ago can now borrow $1,000,000 and get the same monthly payment – a whopping 23% increase!
More evidence of the local listing count plunging….and seller price expectations rising!
The top 20 toughest housing markets includes a diverse geographic mix of larger established metros and up-and-comers where housing is still relatively affordable. They are concentrated in three regions of the country — eight metros from the West, six from the Midwest and six from the Northeast. None of the markets are located in the South, which dominates the list of top 20 easiest markets to find a home.
California led the national list of toughest housing markets, with six of the top 20 toughest markets coming from the state. Ohio followed with three markets — Columbus, Cincinnati and Akron — making the top 20 toughest markets list.
The scarcity of homes is reflected in the market prices, and the trend in most of the toughest markets is toward even fewer homes for sale. The average median listing price for the top 20 toughest markets was $480,830 in January, 40 percent higher than the average median price of the top 100 largest markets. In addition, 17 of the top 20 toughest markets began 2020 with double-digit annual declines in available inventory, with a handful of markets seeing more than a 30 percent drop, including San Jose, San Francisco, Seattle, Salt Lake City and San Diego.
I have to hand it to Brett and team in their preparation of this 1975-built home in Solana Beach. The flooring was removed downstairs, and they added a heavy epoxy paint to the exposed-concrete, which gave it a trendy-hip look to go with the colorful formica in the kitchen:
The list price is $1,850,000, and they already have four offers!
Richard was the listing agent in 2014 when Tamara’s clients paid $620,000 for this 1,296sf Encinitas house built in 1974. At the time, it was tenant-occupied and in its previous condition – I dubbed it a ‘light fixer’:
They put in the work, and listed it last week for $879,900 – here’s what happened:
It seems as though legalized marijuana is said to be good for almost everything. Now a new study from the National Association of Realtors (NAR) has added real estate to the list. The impact is clearer when it comes to commercial properties, but agents saw differences in the residential sector as well where medical and/or recreational use of the substance has been legalized.
The NAR study, Marijuana and Real Estate: A Budding Issue (yes, NAR went there) grew out of a survey conducted with over 150,000 of its members, equally divided between those who operate in the commercial area (including building owners and managers) and those who practice residential real estate.
The study looked at states where marijuana has been legalized for medical purposes, for recreation, and for both, examining how it is grown, harvested, stored, sold, and consumed within those states. NAR found more impacts from legalization over time so divided some of the findings according to whether it occurred after or prior to 2016 which accounts for the dual percentages reported.
“As more states legalize marijuana, the real estate market will progressively have to adjust,” said Dr. Jessica Lautz, vice president of demographics and behavioral insights for NAR. “From property owners, to manufacturers, to those who simply want to engage for leisure – it all touches real estate in some form.”
In states were marijuana is legal in some form, between 9 percent and 23 percent of members who responded to the survey said they believe the inventory of available homes is tight for multiple reasons, including all-cash purchases from within the marijuana industry. While most respondents hadn’t seen any changes in property values near dispensaries, between 7 percent and 12 percent said they had seen an increase in values while 8 percent to 27 percent said they had seen values decline.
“Residential practitioners are getting used to the new normal of having marijuana legally used within rental properties, while homeowner associations are tasked with setting new rules to address consumption and growth,” said Lautz.
The majority of respondents reported that homeowner associations have rules that place certain restrictions on smoking and growing marijuana in homes or common areas. Only around 3% answered that specific homeowner associations do allow growing or smoking in home or common areas.
Three-quarters of members had never tried selling a grow house but among residential practitioners who had, 29 percent said they had a difficult time doing so. Twenty-seven percent of those in more recently legalized states reported difficulty compared to 25 percent in states that legalized before 2016.
Because Federal banking laws prohibit use of checks or credit cards to purchase marijuana, it is usually an all-cash business. About one-fifth to a quarter of landlords said they were unwilling to accept cash for rent in any instance, while about 10 percent said they would only refuse cash from an illegal federal activity. Forty-two percent of those in states where only medical marijuana is legal would accept cash rent, as would two-fifth of those where both medical and recreation use is allowed.
Among commercial practitioners, NAR found an increased demand for land, warehouses and store fronts that are intended for marijuana. In states where both uses are legal, more than a third of those polled said they saw an uptick in requests for warehouses or properties used for storage. In those same states, up to one-quarter of members said the demand for storefronts grew, while one-fifth said there was a greater demand for land.
“When the business of marijuana is discussed, some have a tendency to focus on only the buyers and sellers of the product,” said Lautz. “However, these numbers show that marijuana has been a boon to commercial real estate.”
Marijuana as a business has prospered for more than a decade and that growth continues to evolve. In the states where medical and recreational marijuana have been legalized for three years or more, each saw increases in the demands for commercial properties. As in residential uses, the effect on commercial property values near dispensaries was mixed, but about 20 percent reported an increase. There were fewer reports of declines.
Many respondents said leases had been modified to accommodate the marijuana industry, especially where legalization occurred prior to 2016. About half of respondents in medical marijuana states reported no issues leasing a property previously used to grow marijuana as did 35 to 49 percent of those where both uses were legalized. The most common problem among these properties were lingering odors, followed by moisture issues. Both matters were more common in areas where recreational marijuana has been legal for a longer period of time.
It reminds me of this REO we saw on the way to Valley Center. It sold for $950,000 with 5% down in 2005, was foreclosed and sold for $276,500 in 2009 (when this video was taken), and just resold for $775,000 in September. What a country! This video has 27,500+ views too!
Last year I thought I was taking my birthday off, but by the end of the day I had sold three homes!
I don’t expect the same action today, but instead we do have a handful of new listings in the works to kick off the selling season. I think the market is going to erupt over the next few weeks as we reach the perfect intersection of ultra-low rates and more boomers making their last move!
