Inventory Watch

Wow – the stack of unsold listings keeps rising, and now up to 612!

Comparing to recent years:

2022: There were 15 weeks when the number of actives was between 400-500.

2023: Only three weeks when the standing inventory was just over 400.

2024: There were 28 weeks with more than 400 actives, and the highest was 509.

Of the 65 new listings in the last week, 22 of them were on the market previously this year with the same or different agent. Those refreshed listings don’t add to the count either – they just replace the one that was cancelled.

It shows how tired the inventory is – it’s hard for buyers to keep their eyes open!

This is why sellers should have the option to sell their home off-market. Going on the open market doesn’t look that fruitful to many – especially to the sellers who are attached to an aspirational price.

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Compass vs. Zillow

Zillow is scheduled to start their ban this week, but this lawsuit should pause everything.  Wouldn’t it make sense for the DOJ to step in and voice their opinion right about now to help guide us to the eventual conclusion? Or will they continue to stand by and just let the courts handle it?

Compass Team,

Compass is suing Zillow for abusing its monopoly power to ban homeowners and their agents for marketing homes off Zillow’s website. Zillow’s ban is designed to make it nearly impossible for homeowners to sell their home off Zillow so they can force all listings onto their platform to be monetized.

This isn’t just about platforms or policies – it’s about your clients. When a company restricts where and how a home can be marketed, it takes away choice from the homeowner and limits your ability to deliver the best outcome for them.

No one company should have the power to ban agents, homeowners and their listings simply because they don’t follow that company’s business model. That’s not competition – it’s coercion. Imagine if Amazon banned a seller for offering a product on their own website first. That’s what Zillow is doing in real estate. They have made their position clear: giving sellers and agents the choice to market outside Zillow’s website threatens their bottom line and monopolistic control.

The lawsuit is very clear in its focus. First, Zillow has leveraged its monopoly power to impose the Zillow listings ban on the market which is a clear violation of federal antitrust law. And second, Zillow colluded with Redfin and eXp to jointly pressure Compass to follow rules that serve Zillow – not homeowners or agents – which is also a clear violation of federal antitrust law.

To lead this effort, Compass has hired Ken Dintzer, the Department of Justice lawyer who successfully sued Google for monopolizing online search and stifling competition, to sue Zillow for using its monopoly to stifle competition.

Going forward, your Sales Manager will keep you informed of any updates. In the meantime, it’s business as usual for all of us. Our focus will remain on what matters most: giving you every edge to better serve your clients. My advice to all of you now is double down on your business. As the market slowly comes back into balance, this is a great time to lean into every tool, program, and marketing advantage we offer.

Compass is standing up for your clients, for agents, and for homeowner choice. If your clients ask about this, let them know: Compass is standing up to protect their right to choose how their home is marketed.

Robert

Selling Parents’ Home

Are you preparing to sell a parent’s home?

How should one approach an elderly parent who is reluctant to sell their home? What are the common mistakes people make when trying to sell a parent’s home, and how can they avoid them? Here’s what experts and sellers recommended:

Clear out the junk — but keep emotional attachments in mind: Sellers said that clearing out a home that had been lived in for decades was a lengthy process that people should start sooner rather than later.

Two-thirds of Americans over the age of 55 who are selling their home said they are emotionally attached to it, according to Opendoor, a real-estate company. About 56% of sellers over 55 have lived in their homes for 15 years or more.

“For those selling their parent’s home, keep these emotions in mind,” Bryson Taggart, an expert on real-estate trends.

Be clear about what the parent wants: It’s important to have clarity on what the parent’s goals are and how to achieve them. “It needs to be an ongoing discussion. The earlier you can have it, the better,” Venegas said. “The last thing you want is a parent breaking a hip, or [needing] to go into assisted living, and then everything just becomes emotionally heightened because everything feels rushed.”

It’s also ideal if both parents and adult children are aligned on matters such as whether to sell and how much to sell the home for before starting the process. Jeanne Frederick, a Las Vegas–based global luxury property specialist at Coldwell Banker, told MarketWatch that agents worry about older people being manipulated. “We have to do a lot more listening and ask really good questions,” she said, because “the elderly can be taken advantage of so quickly.” Frederick is also trained as a “Seniors Real Estate Specialist,” a designation created by the NAR.

“Sometimes it’s their own family, [and] sometimes it’s friends — so it is important for me to be a layer of protection,” she added.

Fix any problems you’ve identified: Elderly parents may have neglected to fix a leaky roof or a faulty pipe, and those factors could severely impact the value of the home, so take care of such repairs before listing the house for sale, Venegas said.

Ryan Sparks is trying to sell his parents’ home in Jupiter, Fla. He said that, even though his dad had been a general contractor when he was alive, the house still needed little fixes before it was ready to hit the market — “things I didn’t even realize were potential issues” until seeing the inspection report, he said.

Change the air filters, make sure the lightbulbs are working, and ensure the property and landscaping are well-maintained. “It’s more about putting together a fresh, clean home,” Frederick said.

But also “avoid any major renovations, other than maybe a refresh of the paint,” Venegas added. “You can’t anticipate something a buyer is going to want. The most important thing is making the house [the] best as it can [be] in its current state.”

Have realistic expectations about the sale price: Pricing an aging parent’s home fairly is also very important, according to experts.

“The misconception that a lot of older clients have is that they’ll price high and leave room for negotiation,” Venegas said. But that actually works against clients, because buyers will think the seller is not realistic, so the house sits on the market for longer than intended, she said.

What’s more, Opendoor’s Taggart added, “if you don’t price a home correctly when it first lists, price cuts will often become steeper as the home remains on the market.”

https://www.marketwatch.com/story/everyones-pretty-stressed-and-sad-tips-for-selling-your-aging-parents-home-from-people-whove-been-there-01c10551

Jim’s tips:

If a parent still lives there, know where they are going to move. If possible, have them go ahead and move on a comfortable timeline prior to selling. Tell them to not worry about their heirlooms and artifacts – you will bring them later.

Clearing out the ‘stuff’. Start early and expect that it will take 2x or 3x longer than expected because whoever goes through the stuff will have several moments of reflection along the way.

Get a Professional Home Inspection report. Review and consider fixing things in advance. What are the most important things to improve? Buyers really dislike shag carpet (makes the whole house look older), original HVAC, original windows, leased solar, and a leaky roof.

Pick a Path for Improvements. A minor tune-up will still cost $25,000 to $50,000, and the full package will be $100,000+ for new windows, doors, paint, flooring, kitchen & baths, HVAC, and roof tune-up. Either path should recoup all the money invested, and the biggest reason for at least doing something is to help minimize the buyer demands later.

Staging is a must. It’s rare that the improvement package will be enough to hide the age and functional obsolescence of the family homestead. Staging will help to bring the home into this era.

Sell what you got. Typically, the older homes are in good locations and have decent schools.

These are tough sales. Today’s buyers prefer newer turnkey homes, and you can’t blame them – they are all exceedingly expensive. Be realistic of the challenge ahead, and hire the best realtor you can find.

More on May Sales

Bill is showing a 9.4% decrease in SD May sales, year-over-year.

But around the north coastal area, sales have been holding up. The NSDCC sales in May were +7% YoY, and for the first five months, it’s +6%! We can live with those!

The number of off-market sales (which are a part of the total sales count in green) continues to be muted. They might increase a bit if we ever have another frenzy, but with these market conditions, buyers are too cautious.

P.S. Is your life full of Ups and Downs? Now you can live right on the corner:

https://www.compass.com/listing/2046-ups-circle-oceanside-ca-92054/1866926146381690585/

Flat For Awhile

JB is predicting that the local appreciation will be positive for the next few years, though not by much. Zillow thinks the same thing, and if it bounces around in a tight range for the next 3-5 years, it probably won’t surprise many.

It means there won’t be much, if any, benefit in waiting – for buyers or sellers. Rates aren’t going down significantly, and America minted 379,000 new millionaires last year, or more than a thousand each day – combine that with the generational wealth transfer and the buyers’ ability to purchase should be there.

Could there be a boomer liquidation event? It’s probably the biggest threat to pricing, and it could pick up speed in areas where several boomers are aging in place. But how can you time that?

Buy when you find the right house, and sell when you have good comps and low competition!

Carmel Valley going down? I’ll have to see it, to believe it!

Sly Stone, RIP

I know that Brian Wilson died but Sly had a bigger influence on my musical upbringing. Not only was his greatest hits cassette was the first one I ever bought, but later I met Rich Romanello who was their first manager and one of my favorite clients of all time. He promoted Sly and The Family Stone when they first got started in San Francisco and made them into a world-wide juggernaut that was the basis of R&B music for decades to come.

Lowball Season Now

Usually, the lowball season is limited to the 4th quarter each year. With the excess inventory today, some buyers will be attempting to get a deal now.

Buyers – Where do you start? Getting a deal on a fixer can be counterproductive because of the time and money needed to get it back in shape – and you end up with a retail investment that dominated your life. But if it’s in a superior location, it might be worth it.

The market is healthy enough that the creampuffs are going to get good or great offers from the less-informed. If you like the home and don’t mind paying retail, then battle it out and maybe you will get lucky and be able to shave a couple of bucks off the list price.

But if you want to lowball, the best chance of getting a deal is on the aged listings – those that have been on the market for more than 30 days.

  • The best sign of a motivated seller is one that has already lowered their price. They are aware that their pricing isn’t working, and might be more receptive/motivated to listen to your lower offer.
  • Pick on vacant houses, especially those with a hefty mortgage.
  • Offer a quick close, and other sweeteners to offset your low price.

It’s likely that you will have to make several offers before landing one, but if you have the time, go ahead. The hope of holding out for a superior property will likely out-weigh your willingness to risk it all on one that might seem discounted today.

Sellers – Are you kicking yourself for not selling when rates were 3%? Why? Pricing is BETTER today than it was in 1Q22, the peak of the covid frenzy.

But let’s say a buyer is willing to cash you out in three weeks, but only if you knock 10% off your list price. If your home has been on the market for more than 30 days, we already know that the price is at least 5% too high, so the 10% discount is only slightly under market – and it could be retail by the end of the year.

Nobody is asking you to go back to 2021 pricing (and that pricing sounded fantastic in 2021, just four short years ago). At worst, the buyer is asking you to go back to 2023 pricing when there was a little dip.

You really ought to consider it.

Oh, ok you want to hold out for the extra couple of percentage points? You will need lower rates and/or less competition, and neither of those are likely this year or next. Yes, Trump will replace Powell in May, 2026 and rates might go down to 6% or less. But the likelihood of 1-2 of your neighbors taking a lowball offer is high, and their reset of the comps will thwart any future benefit of slightly lower rates.

Somebody in your neighborhood is going to take a lower offer. It might as well be you. Sell for less now, or sell for less later – your choice.

It’s just money!

Frenzy Monitor

NSDCC Actives and Pendings

The local markets are sinking further into a stallout that will probably last for the rest of the year.

Actives are up 27%, and pendings down 16%, year-over-year. Yikes!

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