The median price of an existing single-family home in California in May 2018 eclipsed $600,000 for the first time in more than 10 years as statewide prices continue to approach San Diego County's $640,000 figure, according to the California Association of REALTORS® (C.A.R.).
C.A.R. said the statewide median home price surpassed its previous peak of $594,530, which was recorded more than 10 years ago during the last housing boom. The May statewide median price was $600,860, up 2.8 percent from a revised $584,460 in April 2018 and up 9.2 percent from a revised $550,230 in May 2017. The year-over-year price growth pace was the highest rate of growth since May 2014.
In San Diego County, the median sales price of an existing single-family home was $640,000 in May 2018, a slight increase from the $635,000 sales price in April 2018 and $605,000 sales price in May 2017.
The median number of days it took to sell a California single-family home remained low at 15 days in May 2018, compared with 15 days in April 2018 and 14 days in May 2017. Meanwhile, in San Diego County, the median number of days a home remained unsold on the market was 13 days in May 2018, compared to 11 days in April 2018 and 11 days in May 2017.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 409,270 units in May, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2018 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. May’s sales figure was down 1.8 percent from the revised 416,750 level in April and down 4.6 percent compared with home sales in May 2017 of 428,870. May marked the first year-over-year sales decline in four months and the lowest sales level in more than a year.
“The softening in May home sales was due in part to the spike in interest rates in mid-April, when the 30-year fixed mortgage rate jumped 20 basis points in just one week to reach the highest level since 2014,” said C.A.R. President Steve White. “Homebuyers may have postponed escrow closings to wait out the effects of the rate surge. Additionally, the specter of rate increases earlier in the year may have pulled sales forward into the first quarter, which resulted in the subpar performance in the last couple of months. Looking ahead, higher mortgage rates and elevated home prices will heighten affordability constraints that will likely temper the housing market in the coming months.”
“As we predicted last month, California’s statewide median home price broke the previous pre-recession peak set in May 2007 and hit another high as tight supply conditions continued to pour fuel on the price appreciation fire,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “With inventory starting to show signs of improvement, however, home price appreciation could decelerate in the second half of the year, especially since further rate increases are expected to hamper homebuyers’ affordability and limit how much they are willing to pay for their new home.”
Other key points from C.A.R.’s May 2018 resale housing report included:
-- The bottom end of the market continued to bear the brunt of the housing shortage as the availability of homes priced under $200,000 declined by 28.7 percent on an annual basis, and those priced between $200,000 and $299,999 dropped 13.1 percent. On the other hand, inventory of properties priced $1 million and above increased by more than 18 percent. In general, supply constraints continue to limit sales in market segments priced below $500,000, but higher-priced properties continue to show modest to strong growth in sales in the recent month.
-- The number of statewide active listings improved for the second consecutive month, increasing 8.3 percent from the previous year. The year-over-year increase was the largest since January 2015, when active listings jumped 11.0 percent. Perhaps more homeowners are listing their homes for sale in an effort to cash out on recent home price surges. The increase in active listings was also partly due to the sales decline, which led to a boost in inventory.
-- As sales declined from a year ago, the unsold inventory index, which is a ratio of inventory over sales, increased on a year-over-year basis as well. The statewide unsold inventory index edged up to 3.0 months in May from 2.9 months in May 2017. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate.
-- Mortgage rates have been on the rise since breaking the 4.0 percent barrier in January. The 30-year, fixed-mortgage interest rates averaged 4.59 percent in May, up from 4.47 percent in April and from 4.01 percent in May 2017, according to Freddie Mac. The five-year, adjustable mortgage interest rate also perked higher in May to an average of 3.79 percent from 3.66 percent in April and from 3.12 percent in May 2017.
In other recent real estate and economic news according to news reports:
-- According to CoreLogic, an Orange County-based real estate information service, the median price of a home in San Diego County rose by 7.6 percent in May, compared with the same month a year earlier. The median price of a San Diego County home was $570,000 in May 2018, up from $529,750 in May 2017. A total of 4,004 homes were sold in May in the county, down 3.6 percent from 4,155 during the same month the previous year. The trend in Southern California, says the real estate tracker company, is declining sales as prices reach new records. “With inventory tight and affordability worsening, the number of Southern California homes sold has fallen on a year-over-year basis during three of the last five months,” said Andrew LePage, research analyst with CoreLogic. “Total sales during the first five months of this year fell about 2 percent from the same period last year, reflecting limited inventory particularly in more affordable price ranges.”
-- A recent report by the S&P CoreLogic Case-Shiller Indices said San Diego County home prices in March increased 7.7 percent from a year ago, outpacing most of the country. Nationally, home prices had increased 6.5 percent over 12 months. Seattle had the biggest increase of 13 percent in the 20-city index. Prices were up across California. San Francisco prices went up 11.3 percent in the same time period and Los Angeles prices increased 8.1 percent. For April, the report said that San Diego home prices were 7.8 percent higher over the past year.
-- San Diego County’s unemployment rate is the lowest since January 2000. It was 2.9 percent in May, unchanged from a revised 2.9 percent in April 2018, and below the year-ago estimate of 3.7 percent, the California Employment Development Department (EDD) recently reported. This compares with an unadjusted unemployment rate of 3.7 percent for California and 3.6 percent for the nation during the same period.
-- Americans’ household income is the highest ever. An average American home has never seen better income as the economy continues to break records. The median household income reached $61,483 in April, according to an estimate by Sentier Research based on monthly Census Bureau survey data. It’s the highest estimate by Sentier since it started providing monthly data in 2000, and also higher than any of the yearly Census Bureau estimates that reach back to 1967. American household incomes were decimated following the 2008 recession and continued to sink until 2011. Only then did wages start to recover. In recent months, however, the numbers have started to break new grounds. The economy has broken several records over the past months, such as the most job openings in one month, 6.55 million in March. That means there were almost as many job openings as the number of people unemployed. Unemployment fell to 3.9 percent in April. The only time it has ever dropped so low since the 1969 recession was in April 2000, and only for one month. Black and Hispanic unemployment rates have also fallen to the lowest levels in recorded history, and among women, the unemployment rate has decreased to the lowest since the 1950s.
-- Less than 10 percent of homeowners are underwater on their mortgages. More than a decade after the housing market collapsed, the recovery has passed another milestone. The share of homeowners who owe more than the value of their home is 9.1 percent, falling below 10 percent for the first time since the housing market fell, according to Zillow’s 2017 Q4 Negative Equity Report. The typical U.S. home lost more than a quarter of its value when the market crashed, sending millions of homeowners into negative equity, when their homes’ values were lower than the balances on their mortgages. Now, though, national home values are higher than ever.
-- Household wealth topped $100 trillion for first time in the first quarter, according to the Federal Research. Thanks to rising house prices, the net worth of households and nonprofits rose to $100.77 trillion from $99.74 trillion, offsetting the impact of a decline in the stock market. Household debt rose at an annual rate of 3.3 percent staying in the range it’s been for the last few years. Business debt grew by 4.4 percent for the second straight quarter. Corporate cash holdings rose to $2.66 trillion from $2.59 trillion.The gains in the housing market, at a time of an improving jobs market, have put households in a better financial position than they have been for some time. Their net worth to disposable income at 682.6 percent is near the highest level in history, while debt service payments as a percentage of household income are way below bubble-era levels.
-- Employment and payrolls will continue to grow in California over the next three years, according to the UCLA Anderson Forecast. The forecast calls for employment growth of 1.7 percent, 1.8 percent and 0.8 percent, respectively, in 2018, 2019 and 2020, with payrolls growing at about the same rate. Homebuilding is estimated to accelerate to 140,000 units per year by the end of 2020.
-- The San Diego Association of Governments (SANDAG) has revised its number to 116,000 for the number of new housing units to be built in San Diego County over the next decade. The revision was due to the state’s Regional Housing Needs Assessment, which regional planning agencies such as SANDAG use to plan transportation and other infrastructure investments. The California Dept. of Housing and Community Development estimate that 171,000 units need to be built locally from 2021 to 2029.
"The median number of days a home remained unsold on the market was 13 days in May 2018"
Every successful REALTOR® shares one common attribute: A commitment to continuing education.
Today, we’re facing disruption from people who say technology will make REALTORS® extinct. There are discounters who say that experience and knowledge are unnecessary.
Our response should not be to argue, be belligerent or fight back, nor to be deceptive or manipulative. Instead, simply resolve to continue to raise your game. Be the most qualified and smartest agent you can be, so you can correctly advise and expertly guide your clients. That will happen only with a commitment and dedication to continuing education.
Too many agents only see continuing education as a necessary evil. Many take the bare minimum of courses to keep their license current. They sit through classes while chomping at the bit to get back to work.
However, continuing education can have a multiplier effect on your career. It can result in greater financial literacy, productivity, and income. It will lead your mind to new ways of thinking. It will enable you to provide incredible value to your clients. Specialty knowledge can help boost your salary and client base. Better educated agents bring heightened professionalism, marketability, ethics and proficiency to the industry.
What might have worked yesterday might not work today. What was relevant in the past might be useless today. That’s because the market is continually changing and evolving. There is so much to keep up with that it can make your head spin.
In today’s fast-paced world, there are new technologies to learn and expertise to be gained so you can stand out from the crush of competition. Agents who embrace technology and integrate it into their daily work will stand a better chance to expand their client base and work with clients from all generations.
In addition to technology, there are new rules and regulations, as well as new forms. I’ve been teaching between 12 and 15 classes annually since 2010. As market conditions and laws change, it is imperative that we remain informed to best position our clients.
If you don’t know the latest, then you cannot serve and protect your clients in the best way. One new sentence can mean a major change. If you make an error due to ignorance, you could find yourself facing a lawsuit and dashing your clients’ dreams. Many feel that the real estate transaction is one of the most painful processes one can endure. Nobody wants to put their clients through pain, especially when it can be so easily avoided through continuing education.
Real estate agents operate in one of the most competitive industries in the U.S. There are few barriers to entry, relatively low startup costs, so thousands of people jump on board every month. What will separate you from the newcomers? It will be your experience, and commitment to continuing education.
The choice is yours. You control your own destiny in our industry. Being the best that you can be by continuing to learn every day is the best choice. We’re never finished learning. As Warren Buffet has said, “Whatever makes you smarter, makes you richer.”
I encourage you to take advantage of the opportunity to learn and attend upcoming classes offered by NSDCAR. It could be a new topic or a refresher on something you think you’re an expert at (you might be surprised what you don’t know). NSDCAR provides members with outstanding resources and tools to enhance your professional skills and better serve your clients. We want every homebuyer or seller to be confident that they are working with a professional who has exceptional real estate knowledge and proficiency.
Nikki Coppa has previously taught recent classes to NSDCAR members. She has served as a C.A.R. Director as well as a National Association of REALTORS® (NAR) Director. She is a past chair of the C.A.R. Standard Forms Advisory Committee.
NSDCAR REALTOR® member Kim Murphy of Fallbrook has served on the NSDCAR board of directors (2008 to 2012) and has served as an NSDCAR California Association of REALTORS® (C.A.R.) director since 2011. She currently serves on C.A.R.’s Strategic Planning and Finance Committee. This committee evaluates tools, programs and financing for C.A.R. It’s not an understatement to say this particular C.A.R. committee is crucial to the future of the real estate profession. This committee looks into the future to consider what might happen to our industry. Kim is in her first year of a three-year term on this committee. After 20 years of working in the apparel industry, she began her real estate career in November 1997 with husband Chris Murphy. They opened Murphy and Murphy Southern California Realty in June 2012. Kim has concerns about the future of real estate and she recently shared her thoughts.
By Kim Murphy
-- Beware of the Disruptors:
The focus of the Strategic Planning and Finance Committee is to help REALTORS® retain their position in the marketplace in the face of all the Disruptors and other economic or industry challenges. Consider that only 31 percent of C.A.R. members closed 10 or more transactions in 2017, and one quarter of C.A.R. members did not sell a single unit. Disruptors are entities or philosophies that threaten the role of REALTORS® as the key partner to our clients. Disruptors have the potential of fundamentally altering our industry. For example, technology mavericks are telling consumers today, “You don’t need a REALTOR®, because you can do this easier and cheaper without them.”
-- Why Disruptors are Dangerous:
Today’s Disruptors are backed by Wall Street capital. We are at a point where competitiveness means rewriting long-standing protocols in a way that the real estate business has not faced before. Well-funded, Wall Street investors are seeing dollar signs, that’s why it’s a dangerous time for our industry. Their promise of an on-demand consumer experience could upend the existing MLS system, revise how homes are bought and sold and displace the traditional roles of brokers and agents.
-- What does the future hold?
If anything, serving on this C.A.R. committee has taught me one thing: our destiny is up to us, the future is in our own hands. We have the opportunity to rethink our business, and leverage our experience. Yes, it may be time to reject old bureaucracies and outdated systems. It’s a great committee because we’re discussing how to engage our membership and provide the budget and the tools they need to take on those Disruptors. If we make the right moves, we can still remain as the “Champions of Home.”
-- Benefits of C.A.R. participation:
On one hand, real estate is local. But on the other hand, real estate is as big as you make it because our clients come and go from different locations in California and between states. Our state association does an outstanding job at watching the national trends and how they can impact the California market. California is a trendsetter.
-- Change is nothing new:
For 20 years, my husband and I worked in the surf apparel industry. At one time, I was Regional Sales Manager for Ocean Pacific Apparel Corp., a company that pioneered the surf clothing brand. I went on to become the Vice President of Sales for Gotcha and eventually with my husband started our own business. But then, our investor sued us for our own company. The legal activity was debilitating. We decided to make a change. Because we were salespeople at heart, we felt that we could be successful in real estate, but it hasn’t been easy.
-- How to survive in real estate:
I’ve seen new agents believe the lie that all it takes is getting your license and the cash faucet will automatically turn on. Nothing could be farther from the truth. With dedication and perseverance and faith in God, we have survived the economy’s ups and downs when the inventory and buyers and sellers were nowhere to be found. When a challenge hits you, your outcome will be determined by your next step. Is it focused on the challenge or focused on where you're headed?
-- Key to success in real estate:
Real estate takes hard work. Our focus has been on serving clients. If you only go after money, you’ll never have enough. But, if your priority is serving your client, then you’ll make more money than you need. We don’t use lockboxes. We personally meet buyer’s agents at the property. My husband and son are terrific “hunters,” they meet with new clients on the front-end. As the broker, I oversee the transactions and contracts. We’re also very involved in supporting charities in our community. We believe in giving back.
-- Advice for NSDCAR members:
I borrowed this inspiration from Gino Blefari because it is a truth to me: Don’t be afraid of change and don’t join the easy crowd where the expectations are low or where they don't care. Keep learning and growing. Go to where the expectations are high, where you will be challenged to study, ready, change, develop and learn the next skill. Because it's the challenge that creates the mental muscle, the vocal muscle, the actual physical muscle to become better, stronger, wiser and unique!
By Chris Voss
Former FBI hostage negotiator
In its simplest terms, effective negotiating occurs when you’re using good communications techniques. And, good communications follows effective information gathering. So, to be a better negotiator and communicator, decide with every conversation to make people feel so comfortable talking to you that they tell you things they normally wouldn’t tell other people. People will do amazing things for you if they like you and trust you.
However, sometimes with negotiations, the information that you’re gathering is nothing short of conflict. Sometimes in negotiations, you find yourself fending off an attack. Have you ever been in a difficult conversation where the other person appears intent on pulling you into an argument or trading personal attacks? Of course, we all have.
When we are under attack, our natural tendency is to attack back and defend ourselves. When people criticize you, you want to criticize back. When people insult you, you want to insult them back. This is especially true when the attack appears out of nowhere, or it’s irrational or personal. Attacks typically evoke emotion, and emotion can constrict our cognitive ability. So, as a result, our “fight” or “flight” instinct kicks in.
If we choose to fight or defend ourselves, and if we respond in an argumentative, sarcastic or hostile tone, then the relationship is damaged. So, the next time you’re faced with an attack, try not to react. Instead, let me recommend that you respond with either “I” messages or “No” questions. “I” messages and “No” questions are outstanding fire-fighting techniques when you are under attack. Let me explain.
By using “I" messages in an non-provocative or unprovoked way, we are expressing how we feel when the other person does or says certain things. “I” messages identify a problem or issue without assigning blame. It is a face-saving technique that makes it easier to confront behavior that is counterproductive without being accusatory. For instance, you might say, "We have been talking for several hours, and when you insult me, I feel frustrated because it makes it difficult for me to focus on what you are saying.” Persistent, uncooperative behavior can jeopardize the ability to accomplish anything.
In similar manner, “No” questions also can be effective when personally attacked, especially when confronted by a “yeller.” A “yeller” by definition is yelling because they want to be heard and, for whatever reason, they believe they are not being heard. So, when confronted by the “yeller”, simply ask them, “Do you want me NOT to hear what you are saying?” Of course, the answer will be, no. Then, follow-up by saying, “When you yell at me like that, I feel,” and then continue with an “I” message. Another effective “No” questions would be: “Would it be ridiculous for me to ask…?” or, “Do you not want us to resolve this?” When you use this technique, you are showing empathy and it can get you a positive response.
Also, related to good communications techniques for effective negotiations, there are two common habits that can render your negotiations efforts useless. Avoid these and you will increase your chances of negotiations success. Here are the two bad communication habits:
#1. You speak first.
Why is this wrong? Because people are dying to tell you what’s on their mind and it makes them feel extremely good to do so. Also, because letting others go first is more effective. Once heard out, then they are enormously open to be persuaded. Also, because the secret to gaining an upper hand in negotiations is to give the other side the illusion of control. Get them talking. Tell them they’re in charge. Ask lots of “what” and “how” questions. You’ll be stunned at what they’ll reveal to you.
#2. You answer questions when asked.
Why is this wrong? Because most people ask the wrong question and their context is inaccurate. Also, since you want to give the illusion of control, instead, reply by saying, “What makes you ask?” or, “It seems like you’ve got a good reason for asking” or, “Is there a reason I shouldn’t know? (then, shut-up and listen).
The goal is to end the conversation on a positive note because the last impression is the lasting impression. Make your parting shot a positive one with such lines as, “I’m dedicated to your success,” “I want you to succeed,” “In 10 years, I want us to look back on an enormously successful relationship.” Let your final comment echo in their mind. Make it a good one and you will prosper.
2018 C.A.R. Reports from Sacramento are in!
This May, NSDCAR sent your C.A.R. Directors to Sacramento to represent you in the C.A.R. decision making processes for 2018. The following reports will inform you of the pressing issues discussed in Sacramento this year. With topics ranging from the Housing Affordability Fund to Managed Retreat and everything in between, you will definitely get informed on the topics affecting how you do business in 2018 and beyond.This year we have provided them in an easy to use PDF document. Click Here to View in downloadable PDF format
Below please find links to the proposed amendments to the Bylaws of the North San Diego County Association of REALTORS® as recommended by the Board of Directors to be placed before the membership for a vote to take place at the same time and on the same ballot as the Annual Election in June 2018. Click the link below to review. Notice of Proposed Bylaw Amendments - 2018