The San Diego Home Blog

Awhile back, Steve posted a rant (which I agree with, by the way) on the invariable problems associated with agents acting as both a mortgage broker and a Buyer representative in transactions, particularly stemming from the obvious conflict of interest. While our experience has been that these situations generally result in nightmare transactions, I feel compelled to give credit where credit is due (in what, to the delight of many, may be my shortest post on record).

This week we closed an escrow that had all the warning signs and potential for disaster. An agent brought an offer on one of our listings in which she was both representing the Buyer and handling the loan. The offer specified a 30-day escrow and 100% financing plus a substantial Seller credit for the Buyer’s closing costs (the Buyer had no cash). The agent was affiliated with a “Who Are They?” company. While they had no courier service, documents were easily shared via email and through our web-based transaction system. She answered her phone personally EVERY time I called, got me documents within 24-hours of my request EACH time and met ALL contractual timeframes. Negotiations were constructive, swift and fair, we had complete file a week and a half prior to scheduled closing (nearly unheard of), and escrow closed three days early. To this agent (you know who you are), kudos! There is an exception to every rule.

This week from MSNBC - Believe it or not, the real estate market is slowing. NO! Say it aint so! San Diego County got the honors in the primary photo, with the caption pointing out that for the first time in six years, year-over-year prices fell in June, while the article reminded us that inventory and market times have climbed significantly.

Sometimes it’s just no fun being right. We (the real estate agents who pay attention to silly things like market trends and interest rate fluctuations, and who listen to what the buyers and sellers are saying) have known this was coming for months or, dare I say, years. No one has wanted to hear it and few have chosen to believe it, but we have been, are, and will continue to be in a correcting market. Everyone presumably understands the concept of cycles, so why should it come as a huge surprise that prices are retreating after six or more years of insane appreciation?

As one who lives and breathes this stuff (often to the detriment of my family and their basic needs, such as regular meals and clean clothing), I didn’t need the media to tell me last year that our market was heading for retrenching. That was apparent to me just by looking at the low down, riskier loans that the majority of buyers were opting for to allow them to afford their home purchase, by considering the potential impact of rising interest rates or even the threat, by observing both buyer and seller mentality during the process. Similarly, I haven’t needed the media to tell me that our local real estate market is now losing steam. Just by looking at the reasons that the sellers in our transactions are selling, the reasons the buyers are buying (or not), and the nature of the contracts (so many seller concessions, as the article points out, that are not generally being disclosed), agents began feeling this declining market months before the media made headlines out of it. And for the record (and perhaps the gazillionth time), our market is not terrible, but simply changing and different than we have been accustomed to since the late nineties.

So, stats time! Here are the links to updated market data for San Diego County and the I-15 Corridor communities.  I’ll pay a back-to-school tribute in a week or so with updated year-to-date graphs. Oh boy - Something to look forward to!

SAN DIEGO, SCRIPPS RANCH, RANCHO BERNARDO(92128), MIRA MESA, RANCHO PENASQUITOS, POWAY and (drum roll) introducing 4S RANCH(92127).

Here I am again………..the “citizen businessman” that intends to live in his house until he can no longer.  Not enough “fire” on this website….so here I will try again.

I have been reading and listening to the “eternal struggle” between “new airporters” and “old airporters”.   All we need is another “study”.  The Union said we have spent more on studies than I care to hear ($19MM so far and counting).

 I want to say that as a small business owner and frequent flyer, I really love my little airport.  I can get anywhere in the world that I want from there.  Who are they kidding?  During the last 17 years going in and out of it countless “frequent flyer miles” and working with my distributors from every corner of the world coming here to work with us…….. absolutely NO COMPLAINTS from me or for that matter any “businessman” that I know.  Who the devil are these survey people talking to anyway.  When they do call my business, they have “loaded” questions slanting toward the answer the developers want. 

 I think it is a heck of a selling feature to a “professional” traveler within 30 miles of Lindberg to have a “user friendly” airport.  Bigger isn’t better.  Ask Denver.  They are on their third failure……..and their airport of the future ate my bags once.

If we are to have a reasonable discussion on the airport (and I am a Scripps Ranch resident), we need to eliminate or at least give a secondary position to discussion from: (1) Point Loma residents that want to get rid of a noise which they purchased with their homes, (2) people who only fly for leisure once or twice a year and will end up buying the cheapest tickets available anyway even if they are through Cleveland, and most of all (4) those that stand to “profit” greatly from the redevelopment of the old airport and development of the new one.   The question is what BEST benefits San Diego and its residents without the “hockeystick” forcasting done to rationalize redevelopment.

The airport discussion is always veiled in “the good of future San Diego” but there always seems to be some other more personal agendas.  We need a serious and honest debate on the future of airport limitations. We cannot allow those with “personal agendas” or “short term profit motivations” to enter the discussion. They need to divulge their true affiliations (developer, Point Loma resident, airport builder, hotel chain planner, etc.)  prior to offering their “expert” opinions on “what is best for San Diego.  Financial advisors making any public statements on a stock or investment must disclose their ”personal agendas”  now, why not “airport experts” creating the “sound bites”.

Personally, as a frequent flyer with enough miles in my lifetime to circumvent the globe several dozen times, I have never enjoyed a more convenient airport than Lindberg anywhere in the world.  I get home from places in the U.S., Europe or Asia and within 45-50 minutes, I am home with my bags in Scripps, 25 miles away. 

Close your eyes for a second and think about your last experience at LAX or New York or Atlanta or Miami or Chicago where that was your destination.  Now imagine those airports as what you get when you get home to San Diego.  I hate my experiences at those airports.  The walking distances or distances on moving walkways are terrible.  How about Chicago.  To get out of the airport and to a car you go at least a mile or two.  Baggage service is slow, crowded and rude.  Distances to “convenient” parking are horrible. 

Next ask yourself, would I take a one stop flight if the price was one third or one half less than a direct flight?  I know what your answer is if it is your money.  If your travel is for business, ask yourself the same question but frame it in the context of you owning the company and pocketing the difference in price.  The future of airlines is Southwest hopping not direct flights. Who makes money and who does not?

The Union talked about how few “direct” flights we have in San Diego, but do we really need them?  We can fly or dare I say, drive to LAX for as congested and rude an airport as any of us want.  Next time you plan a “long” flight (say an international), why not do what so many people from San Diego do.  Drive up to LAX at your leisure the evening before or after dinner and stay in any one of the great hotels that “give you” free parking for a week for staying one night in their rooms.  You get up the next morning at your leisure, step onto a shuttle and voila…………all the big airport you need or want with direct flights anywhere in the world.  The parking pays for the one night stay and there is NO rush or hassle.  There is even a guy to help you with your bags. Your car is in a hotel parking lot with cameras.

If and when I sell my house, I hope the prospective purchaser is a business person that flies a lot and comes from a city with a HUGE airport.  Lindberg is an asset.

Perhaps we will outgrow Lindberg by 2020.  It is a guess.  No one really knows the future NEED for business travel.  We will always be able to get out of Lindberg in one stop to any location.  If someone 15 years ago told you that you would be doing some (most?) of your shopping for Christmas on a computer you would have told them that they are crazy.  Business 14 or 15 years from now when energy is NOT likely to be “cheaper” than it is today will probably not involve more travel, but less. 

I love Lindberg.  Take your personal agenda and call it what it is.   

It’s finally beginning to happen… Sellers are now realizing that they are in a buyer’s market.  Shock!  Real Estate professionals have known this for a long time.  This realization from sellers is starting to affect sales in San Diego.  That effect is that homes are now getting sold.  There is no question that a home/condo sold today at what the sellers believe is “giving the property away” will be a great decision with hindsight provided in 8 or 9 months from now.  This isn’t rocket science.  We’ve seen this all before ~ only the names and faces have changed.  For 7 years in the early 90’s, I heard the same thing over and over again.

If you need to sell your property and you do not have a reasonable price, you will lose tens of thousands of dollars.

We are really fortunate to be working with people today that have a clear understanding of this and they will definitely be the winners in the long term.  Our decision should be the same as any other Real Estate professional; Only work with people who comprehend and understand the market conditions.  If they don’t understand this, they are going to fail, and it’s better that we aren’t involved in failure.  Life is too short.

John Lockwood’s blog post this morning challenged my recent statements regarding my crazy preferences for “doing (my) own blogging,… serving clients directly, and similar ideas” (his words, not mine). What a coincidence, John. I, too, was planning on getting back to “market update” mode today, but I know a shot across the bow when I see it. As is so often the case in my world, I just can’t keep quiet on this one.

John, let me begin by saying that it is and will continue to be an honor being your Visible Friend, and I have no immediate plans to remove you from my RSS feed. Having said that, please understand that while I do not agree with your business model, I do not mean to suggest it is bad, just bad for me. When a buyer or seller walks into the John Lockwood Real Estate Emporium expecting a short wait for the “next available agent”, no harm/no foul. They came with the intent to buy what you are selling. However, if I come in looking for beef jerky and leave with Cheese Doodles (no offense to Cheese Doodles), I will still have that craving. So, I suppose there is a “market” for both products, but unfortunately the storefront is not always clearly marked. And that is where I primarily take issue.

As for your chosen role as interloper, John, I completely respect that you have found a model that is both lucrative and rewarding for you. The thing that keeps haunting me, I suppose, is that your model seems to ignore that this is a business of relationships. Sure, we all strive for and appreciate making the mortgage payment, but to subordinate the personal nature of our industry to our desire to make a boat-load of money can not possibly be in the best interests of the people we represent.

By the way, this Sunday while you are feeding your Walmart babies and endorsing your 25% referral checks, I am going to be attending a going-away party for a friend who is moving to Indiana (and who is, not coincidentally, a past-client). She is one of the most decent and intelligent people I have ever met, she makes me laugh, and I will miss her. So, since you seem to be a Stephen Colbert fan, that is THE WORD. 

Still friends?

Why does this make me sad? On craigslist this morning, there are three jobs ads posted for “bloggers wanted”. In one ad, a “new San Diego Real Estate Blog” is looking for a “talented writer with a knack for marketing who has a serious interest in real estate and preferably has some knowledge of the local real estate market”. Among the job duties listed, they want someone to “get out and market this blog by commenting on other bloggers’ blogs” and to gain links. Talk about ghost writing.

I see a parallel between this and the super-sized agent phenomenon that was the subject of some spirited discussion recently at the RCG. More agents have begun adopting the team business model wherein you have your front man, or woman, and a cast of thousands working in support who actually perform the tasks of showing, negotiating, coordinating escrow, etc… A brokerage within a brokerage, if you will. I am not even on the fence on this issue. Steve and I have shunned the Walmart approach to real estate for years. If you hire me, you should get me. As a consumer, I would find it unacceptable to hire Agent X but have my MLS printout read “call Agent Y with all questions and offers” (an all too common occurrence in our market). Sure, this approach may allow Agent X to service more transactions, but it will not allow that agent to serve more people (remember, the guys that hired you?). But, I suppose it is these same super-sized agents that are far too busy or important to blog, and fearing they may miss the blogging bandwagon but lacking the knowledge to get started, the desire to learn, or simply the desire, find it acceptable to delegate responsibility. I refuse to assign responsibility for my clients to another, as I don’t believe that is in my clients’ best interests, and I certainly am not ready to have others do my online talking. We blog for many reasons. Most will likely agree that what started as a don’t-miss-the-boat endeavor, a quasi-commercial venture cloaked in non-commercial sheep’s clothing has evolved into something entirely different. Those of us that spend our time blogging have found an outlet for our opinions (group therapy, if you will), and believe that the forum allows us to not only interact with our industry peers, but expand our knowledge by benefiting from their varying ideas and perspectives while sharing information and insight with past, present and future clients. It’s rewarding to think that someone might actually be reading this, but if a blog falls in the forest and no one is there to hear it… It really doesn’t matter. I’m having fun. And no one is putting words in my mouth.

It’s rush hour on the information highway, no doubt about it. This coming from a girl who took high school chemistry with a slide rule (shortly after the wheel had been invented), and who was forbidden from using a calculator in her college math and engineering classes because it was considered cheating. Anyway, who could afford those first “pocket” HP’s, much less carry them? I remember my college friend, Sherman, as the first in my circle to embrace the programmable handheld, which was roughly the size of a small aircraft and about as easy to operate. Of course, Sherman also had the first PC in our group, a flashy Commodore, which took up the spot where the sectional sofa should have been and, I have always suspected, was powered by a pair of gerbils on an exercise wheel. Fortran 101? Ah, that was a fabulous waste of 3 semester hours.

So, we have the world at our finger tips. But, when is too much of a good thing just too much? As a home buyer or seller, do you Google, Yahoo, Zillow? Do you do your research using Realtor.com, SignOnSanDiego, Craig’s List, personal websites, blogs, podcasts? At some point, and I am seeing this more often, the extent of information available can become both empowering and paralizing.

When shopping for a home, there is always the temptation to distrust your Realtor. What if they aren’t showing me everything or, worse yet, what if they miss the new listing that was my dream home? We have all read the claims that the vast majority of buyers start their search on the internet, which I am certain are correct. I have also read the studies that say the internet has resulted in buyers looking at far fewer homes before making their purchase, which I now find suspect. When the internet stops being regarded as a research and education tool for home shopping and becomes a substitute for a trusted agent is when the process quickly stalls. We have clients, for instance, who have chosen the auto-notification route for home shopping (emails generated each morning showing all new listing meeting their criteria), and who prefer this approach because of the control it gives them over the process. After many long months (well over 40 homes visited to date), they are unfortunately no closer to making a decision. Now, it seems uncertainty prevails. Too much information has resulted in wasted time (seeing homes that don’t truly meet ther needs, but “just to make sure”), confusion (”Did we see that one?”), and the apples and oranges dilemma (in their enthusiasm to broadly compare, the “what’s most important to us” matrix has become blurred). Time for a defrag. I encourage clients to use technology and its vast resourses to gain knowledge, but without trusting an agent to help filter the information, you could be spinning your wheels.