Hasvold gives perspective on 'crazy' real estate market

"I've been selling real estate in Fallbrook for 40 years now and I've never seen a market like this," declared Chris Hasvold, owner of Coldwell Banker Village Properties. "I thought I'd seen everything, but this year is so different and crazy."

He went on to explain why the current situation is great for sellers, but difficult for buyers, as well as other real estate insights. The reason home prices have skyrocketed is low interest rates, shrinking inventory of homes on the market, and high building costs.

The result is not only high prices, but also buyers resorting to a bidding war for a desirable home.

"If you want to sell, it's a really good time," he noted. "But if you're a buyer, it's a very challenging time."

This is nothing like the Great Recession," the broker noted. "Back then, we had 600 homes listed in the area. Two years ago in Fallbrook, there were 330 homes, and last year less than 300. This year – on May 11 – there were only 52!"

"With only 10% of the inventory, that's the reason for the bidding wars," he explained.

Finding something affordable is another issue for buyers. He said there are Fallbrook homes listed everywhere from the $400,000 range to more than $9 million – and the average price is just below $1.2 million.

Bonsall had only 10 homes listed on May 11 with a $1.7 million average asking price.

These price increases won't continue, the Fallbrook resident said.

"You can't have 25% appreciation indefinitely," Hasvold said. "Something has to change. Personal income is not increasing at the same pace, so we would run out of buyers."

"I'd say it's also a Perfect Storm," he said. That doesn't mean a terrible market or disaster. One solution, Hasvold said, would be if prices flatten out.

"I personally think prices will level off," he added.

The current housing market is different from the Great Recession in 2007-2009 when home prices drastically dropped, and mortgages were being abandoned.

"It's different now because the average homeowner has more equity, so a seller won't really get into trouble," Hasvold explained. "It's been a long time since I've even seen a foreclosure or short sale. Lenders were making bad loans then, so I don't see a tsunami of foreclosures."

The broker said he has noticed more land being sold, some by people who can't find a home now but figure they can buy a lot to build on later. The problem, Hasvold said, is that there is high inflation in building costs.

That condition has also made it difficult for people looking to "flip" homes for a profit. He said that's because sellers don't need to discount their price, resulting in fewer "flips" occurring than a couple years ago.

For people looking for a Realtor, Hasvold's major point in recommending his Coldwell Banker office is experience. He's been selling real estate here for 40 years.

"We have the stability – the track record – with 7,000 successfully closed transactions, including 6,500 in Fallbrook and Bonsall – that's $3 billion in sales."

"No one is close to that," he noted. "What that means is more local real estate knowledge than anyone."

That's important, he said, because buyers and sellers from all over the state are tired of the congested cities and are realizing now there's a new world called Fallbrook. "They see the ability to grow their own vegetables or fruit trees and the attraction of open space," he explained.

"These agents from other areas don't know what they don't know," Hasvold claimed.

Local agents know about private roads, easements, septic systems and where property lines fall, he said.

"Just because there's a hedge or fence doesn't mean that's where the property line falls. You have to know before the sale, so there are no surprises later," he said. "Buyers or sellers can get in trouble without proper representation. There could be unseen conditions that result in a drastic expense. You don't want to be 'that one.'"

"What also sets us apart is our expertise in the contracts. I was part of the California Association of Realtors committee that wrote the contracts we use," he said. "I understand the issues and that helps protect our clients. We make sure our clients are well represented in the marketplace."

It's important to use a Realtor who has an understanding of the local market and can get the maximum price for a seller, Hasvold said, and can also help get the buyer an offer accepted when there may be several on the table.

It's become common for buyers to become discouraged, Hasvold noted. Some have presented offers on 10-20 homes without having one accepted.

With the current market situation, Hasvold expressed cautions for both buyers and sellers.

"The 'location, location, location' answer about what sells applies to determine what a property is worth," he said, "but that price can't be outrageous. There's a fine line about something being overpriced, because if the property remains on the market for a couple weeks, buyers will question if something is wrong with the property. You have to be strategic in your pricing."

For buyers, Hasvold said "price, price, price" is the key. However, he warned frustrated buyers not to make an unhealthy offer. For example, he recommends not making a "no contingency" offer.

"That's just better for both the buyer and seller, for all disclosures and inspections to be transparent. It's not good to have surprises," Hasvold said.

"I urge buyers not to get wrapped up in the urgency to make a deal," he added. "You don't want to have the attitude of 'I'll do whatever it takes' – then to have issues in escrow or afterwards."

Hasvold is owner-broker of Coldwell Banker Village Properties, one of only a few independently owned CB offices in the county. He has 30 Realtors in the office, with a combined 500 to 600 years of local experience.

The business is known for its Community Support Program, started in the 1980s, which gives a portion of its profits to nonprofits in the community. The company has given close to $600,000 in that time to local groups. Individual agents have also given generously, Hasvold said.

The office is located in River Village Plaza in Bonsall. For more information, call 760-728-8000 or visit cbvillageproperties.com.