Tuesday, December 30th, 2008 at 3:33 PM
Oceanside as Bellweather
Now that their prices have dropped substantially, Oceanside has been on a good run this year. There wasn’t an unusual drop-off in sales during the 4th quarter either, despite the grim economic news.
I calculated the averages from the last thirteen years, and compared to 2008’s numbers – look how steady it is in Oceanside:
Oceanside, CA 92054, 92056, 92057, 92058
| Time Period | 3Q/4Q # of Sales | Diff 3Q to 4Q | 3Q/4Q $ per sf | Diff |
| 13YRAVG | 444 / 378 | -15% | $201 / $200 | 0 |
| 2008 | 487 / 415 | -15% | $204 / $196 | -4% |
Not only are the number of sales above average, the pricing is back in line historically too. Here are other signs that Oceanside’s market is finding equilibrium:
575 Actives / 277 Pendings = 2.08 to 1 ratio (2:1 considered the healthiest market)
46 closings since Dec. 15th = $200/sf (right in line with quarterly average)
25 of 46 closings sold over list price.
No matter how you slice it, Oceanside’s market looks good. How does pricing compare to the peak?
| Year | 4Q $ per sf |
| 2005 | $318/sf |
| 2008 | $200/sf |
The dollars-per-sf average declined 37%, which sounds about right. We know there have been some houses selling for 50% to 60% off peak pricing, and there had to be some at 25% off too.
I think it’s safe to say that if other areas experienced the same, their sales would be cooking too. If all it takes is a 37% decline from the peak to get Oceanside back to frenzy-like statistics, how far off is your area?
| Town or Area | Zip Code | Peak $/sf | 4Q08 | Diff |
| Carlsbad NW | 92008 | $398 | $305 | -23% |
| Carlsbad SE | 92009 | $330 | $280 | -15% |
| Carlsbad NE | 92010 | $333 | $267 | -20% |
| Carlsbad SW | 92011 | $371 | $310 | -16% |
| Del Mar/SB | 14/75 | $777 | $652 | -16% |
| Encinitas | 92024 | $461 | $392 | -15% |
| La Jolla | 92037 | $711 | $737 | +4% |
| Poway | 92064 | $361 | $278 | -23% |
| RSF | 92067 | $620 | $538 | -13% |
| San Mrcs S. | 92078 | $274 | $183 | -33% |
| Vista So | 81&83 | $304 | $180 | -41% |
| Vista N | 92084 | $305 | $165 | -46% |
| West RB | 92127 | $330 | $265 | -20% |
| Carmel Vly | 92130 | $398 | $358 | -10% |
There aren’t any of the prime coastal areas that are approaching -37% yet, and probably why their sales are more sluggish. Yet you can verify with any buyer in Vista or So. San Marcos that the market is active with lookers, and we’ll see if they turn into buyers.
But wouldn’t they perform better than Oceanside? The Big O probably had more subprime loans than all of these other areas combined, but all that did was exacerbate their price decline.
Will the other areas follow?
If you feel that all areas will decline approximately the same, then you have the chart above to guide you as to how much further your area has to go.
If you thought that there should be a premium added for premium areas, then add some cush to the -37% decline. For instance, Carmel Valley is only showing a 10% drop from peak to 4Q08. If you thought that the supply and demand for CV was strong enough that the -37% expectation should really be more like -20% to -25%, then we’re about half way there.
This is a general statistical overview – I think what is happening more and more is that, as prices get lower, buyers are shifting their focus towards finding a property with all the extras, and one that fits all their needs. Statistically, further declines in pricing are likely to be choppy, because I think there are buyers willing to pay today’s prices if they could just find a really good house.
Posted on Tuesday, December 30th, 2008 at 3:33 PM in Forecasts, Statistical analysis | 11 Comments » | 
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I am not an expert on oceanside but aren’t there a lot of older neighborhoods there with ice cream trucks?I think i’d rather live in the desert of az rather than overpay to live there myself.I think a lot of that property near the ocean is way overpriced still.My cousins live in san diego near sdsu and personally I wouldn’t be caught dead there at night.El cajon blvd is a real jewel.Prostitutes roaming around all the time.Neighborhoods went real downhill from when i was a kid.I remember the old campus drive in movie theatre from about 30 years ago.Personally I would rather live in a newer area with an hoa.Homes here in rockin and roseville have come down but still overpriced to me.Just went to the mall and I am still trying to figure out where people are getting money to by 700.00 purses at lois vitton.Must be the same morons who overextended on a house.
arizonadude | December 30th, 2008 at 3:48 pmGood info as usual Jim. I agree that the subprime debacle hit O-Side hard, and that is reflected in the prices. The Alt-A debacle will hit the tonier areas pretty hard as well over the next year or two. I’m sure you’ll be keeping tabs on it for us.
Dr. Detroit | December 30th, 2008 at 3:57 pmGREAT chart, Jim. Thank you.
I find it interesting that Oceanside and Carlsbad 92009 were so similar in $/sqft at the peak. Maybe it’s because O’side has such smaller properties. OC Renter referenced not to long ago (maybe in his blog) that once you reach a certain size house, square footage becomes less significant. I agree with this and maybe it helps explain how close they are.
For places like La Jolla and Del Mar, I think they could drop further than 37% because there was really no method to the pricing and buying madness during the bubble. People figured everywhere is expensive, so these nice areas should be REALLY expensive. Sellers (or their agents) pulled ridiculously large numbers out of their rear ends and the Mob bought into it because real estate always goes up. I would love to live in these areas, but I don’t know if I’ll ever believe they’re worth twice as much as Encinitas. Or maybe that’s always been the case and I didn’t know it.
Jim, I also like your point about paying more attention to features. During the bubble it seemed like people turned a blind eye to little things like power lines, backing up to freeways, tiny lots, sewers in the backyard, etc. Oops!
The Blur | December 30th, 2008 at 5:40 pmSlinkys go up before they go down!
Coconutz! | December 30th, 2008 at 7:27 pmCoconutz!
Great stat, Jim. Could you add Vista and San Marcos to the line-up – I’d be really curious about those.
Simone | December 30th, 2008 at 7:28 pmI 2nd that, adding San Marcos would be great to see. We just closed on a house with upgrades and a pool for $150 ppsf and I’m thinking that there is still a small amount of wiggle room here. Maybe bottoming at $141. But, OCrenter is right, because our property is 3300 sq ft in 92069 and Discovery Hills, with smaller, 2200 sq ft homes are still $200+ ppsf. BUT, SEH is being hammered like 92069. Notice that lately? We thought about it, but outside of homes, there’s nothing accessible over there. And those Mello Roos are sky high. Either way, stats for 92078 and 92069 would be awesome. REO’s are everywhere, but they are selling. Thanks again, Jim. You blog is fabulous and your insight is tremendous.
sd_momma22 | December 30th, 2008 at 8:59 pmI added Vista and S. San Marcos, and they all have had strong downward movement, around -40% each!
Jim the Realtor | December 30th, 2008 at 10:07 pm$200.00 per sq in Oside is right where it should be. Del Mar wants $600.00 +per sq ft. Get me a buyer in 92084 for $200 per sq ft and I’m all giddy! I think Vista is about where Oside is right now.
doughboy | December 30th, 2008 at 10:10 pmThis blog leaves me with the idea that the RE market exists in a vacuum devoid of the effects of the economy, and I start wondering if I should buy then I snap back to the reality of all the people I know who are seriously considering bailing out due to job loss, job insecurity, 401k and stock losses, overindebtedness, lower commissions, etc etc. With the state and city budget fiascos just now coming home to roost, I don’t see any turnaround for a few years at least.
BO | December 31st, 2008 at 7:51 amThanks Jim. Is it possible to add 92069, north SM as well? If too much hassle, no worries. Thanks again for the other additions.
sd_momma22 | December 31st, 2008 at 8:50 amThanks for adding those Vista and south SM numbers. I thought they dropped pretty hard recently, but it’s nice to see stats backing up a gut feeling.
Simone | December 31st, 2008 at 10:27 pm