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Posted by on Jun 18, 2012 in Market Conditions, North County Coastal, Thinking of Buying?, Thinking of Selling? | 22 comments | Print Print

Blistering Hot For Some

For those who are casually observing, it is tough to fully grasp the frenzy-like market activity that has been on-going this year.  It seems to intensify each week, as buyers gravitate to each new listing and quickly examine its worth.

If all you see is a listing go pending during its first week on the market, it probably isn’t that remarkable.  But the action behind some of these makes you think that the demand has a long ways to go before being satisfied.

Here are some examples:

We’ve been stalking the Water’s End complex west of the I-5 freeway in SW Carlsbad for the last couple of years.  ProfHoff finally scored the right house, at the right price for her and her husband Tom, paying $740,000 last month.

They are on the same street as this one:

http://www.sdlookup.com/MLS-120029366-6954_Sweetwater_St_Carlsbad_CA_92011

There have been four sales closed in the $600,000s over the last 12 months, yet this listed on the range $795,000 to $819,000.

In the confidential remarks it says that the seller is “very firm” on price, and they were only offering 1.5% commission to the buyer’s agent – and it still went pending after seven days on market!

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Remember the flipper on Nardo in Solana Beach (who paid $729,000 in November)?  It was marked pending right after we saw it here, listed on the range $995,000 to $1,089,000:

http://www.sdlookup.com/MLS-120026756-558_S_Nardo_Ave_Solana_Beach_CA_92075

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There was a time not long ago that we thought we should be buying newer 3,000+ sf tract houses in Carmel Valley in the $900,000s?  Here’s a 3 br/4 ba, 2,424sf house built in 1986 (but decked out since) that listed for $947,000 that didn’t even make it to the open market – it was submitted right into pending:

http://www.sdlookup.com/MLS-120030011-3996_Ambervale_Terrace_San_Diego_CA_92130

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We saw this 2,135sf Torrey Hills listing here, offered on the range $719,000 to $759,000, and it went pending after 15 days:

http://www.sdlookup.com/MLS-120028094-4336_Corte_De_Sausalito_San_Diego_CA_92130

So then same agent listed the same floor plan, in the same complex, with similar canyon setting with no granite but bigger yard on the range $749,000 to $789,000 – and it went pending after 6 days:

http://www.sdlookup.com/MLS-120029182-10833_Corte_De_Marin_San_Diego_CA_92130

That’s about a 5% increase in a month!

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Del Mar remains hot, with several houses closing around $1,000/sf – but those were mostly teardowns closer to the $1,000,000 mark.  This 2,306 sf house built in 1959 had been on the market for $2,500,000 for 150 days with no price reduction.

It went pending last week too:

http://www.sdlookup.com/MLS-120002818-1237_Cuchara_Del_Mar_CA_92014

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We saw the video tour of my new Encinitas listing here.

It found two offers within the first 48 hours of being on the market, and sold for full price, $629,000 – a nice 6.7% increase over what the sellers paid for it 11 months ago:

http://www.sdlookup.com/MLS-120030573-1848_Avenida_La_Posta_Encinitas_CA_92024

My Carmel Valley listing featured around the world thanks to the AP went pending too.

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Hopefully the sellers (and listing agents) of the properties that aren’t selling will realize how hot the market is – and we see an increase in price reductions now that July is less than two weeks away!

22 Comments

  1. deafening silence….

  2. It usually is quiet when posts like this appear. I think readers are reluctant to believe it will last, and all we know for sure is that it is red hot now.

    I think the low-inventory environment is the cause, and that’s here to stay.

  3. My take is that the majority of readers are also prospective buyers. Pretty clear that we saw the bottom maybe 9 months ago.
    Just my opinion but, I think buyers should see this as a healthy time to buy. $ is cheap and it seems there is a steady incline in terms of value.

  4. I was against buying for the longest time. But the market has changed. (through banker manipulation) People in power have shown that they control home prices free enterprise be damned.

    Renters get screwed in so many ways. It’s a sad situation when those that actually pay their bills every month can’t afford a house. While deadbeat homeowners can live for years at a time without making a single payment and just to throw insult on injury government paints the deadbeats as victims.

  5. Exactly Shadash.

    Life is definitely not fair. Ask the healthy-living guy who develops lung cancer. Best way to go is to accept reality and deal the best you can with it.

    Not saying that I am ok with the deadbeats but, in reality, they are just playing the game. Someday, they’ll need to explain to their kids why it was ok to not fufill their agreements…

  6. I failed to comment when i saw this…

    I think I was the quintessential bubble sitter, but I don’t have much to say about buying. The bubble seemed all kinds of crazy, while today it’s not a clear direction. We could tread water (inflation adjusted) for the next 20-30 years, or we could slip some (again, inflation adjusted). If you believe either of those scenarios, it’s still not a terrible way to go since the cost of renting is nearly the same as buying, and your “rent” is fixed for 30 years and falls off after that. Once you get past the fact that people are crazy here and prices reflect that (including rent), the decision to buy isn’t that hard… making it happen in the present environment is definitely harder than it sounds.

    But if it ever returns to the kind of insanity before, you will never forgive yourself that you didn’t buy. So long as there isn’t a nuclear holocaust (and maybe even despite one), coastal California is a pretty good place to live during the coming zombie apocalypse.

    Chuck

  7. It’s terrible to have money but can’t find a house; while there are many who have a house but no money (not paying the mortgage). Nothing fair about it.

  8. JtR, I live and bought in East County at the end of 2010 and while its not coastal living, even in those areas (300ks), houses that are turn key are not staying on the market for more than a week or two and are selling over list.

    The past 3 months have been smoking.

    REO and distressed homes are sitting idle.

  9. 3996 ambervale 92130 sold for 505k in 2002.

    that is all I am saying.

    As we know since 2001/2002 -everything has been artificial- it never happened- therefore -Let the buyer beware that all of the equity since that time(even the 100k remodel) is just a figment of human mania. As long as they know this going in – then I am fine with it.

    Incomes have actually decreased since 2002.

  10. Money is very cheap, so of course people are taking advantage. If you adjust for mortgage rate and adjust for inflation, homes that seem overpriced suddenly doesn’t seem so bad. Remember, the government has rigged the monetary system, so you got to look at the numbers by factoring in the rigging.

    Just for fun, here’s the calculation on the CV 2400 sqft home on Ambervale.

    In 2003 they bought for 505k. Pretty sure they decked it out afterward, even pushing back the slope in the back (see the retaining wall by the pool). Let’s just go conservative and say $175k in upgrades. So 680k, 20% down, at 6% interest rate. Mortgage cost was 3260 per month.

    Now it is selling for 950k. 20% down, at 4% interest rate, mortgage cost of 3620 per month.

    Adjust for inflation, the 3260 per month adjusts to 4080 per month.

    So even at 950k, the mortgage cost is still cheaper compared to the 2003 + renovation cost.

  11. Coronadoandre, no way that remodel only cost 100k. The pool/spa/coping itself prob ran 60k to 70k. The built in frig is 10k. All new kitchen with granite countertop, along with revamping the entire master bath along with all new baseboards, crown molding, all new flooring was prob about 100k. How much to erect a 6 foot high retaining wall that pushed the slope back? My 175k estimate is actually very conservative, if not a bit low.

  12. “It usually is quiet when posts like this appear.”

    It’s bad news for buyers (I haven’t seen any good news for buyers posted in what feels like forever), but we’re used to it by now. No point complaining because it won’t make any difference. I’d advise against the assumption that things can’t change suddenly, and very rapidly, in either direction, when there are madmen at the helm.

  13. Heating up ? Good ! Time for everyone to get off couch, work hard, stay in shape, stay in business, get paid and buy the house. I

  14. You want good news for buyers? Meaning something indicating lower prices? (assuming you wouldn’t mind these mortgage rates?)

    Work as hard as Tom T and other flippers to grind out the good deals. We just saw the Nardo flipper make around $300,000 gross profit by buying a house off the MLS that was available to everyone for 26 days.

    Or there are plenty of short-sale frauds going on around the county. You can get in at 10% to 20% below market, as long as the lender doesn’t catch on.

  15. “Time for everyone to get off couch, work hard, stay in shape, stay in business, get paid and buy the house.”

    Keep Dreaming (Act) Cowboy.

    United Welfare States of America. Free Money for Eveyone. Step right up. No income, No proof, No Problem.

    Bribes & Payoffs (oops, I meant ‘Campaign Contributions’) gladly accepted.
    Se Habla Espanol.

  16. You can fight it, or you can work with it:

    NEW YORK — Warren Buffett, whose prediction last year of a housing recovery was premature, is raising his bet on a rebound with his $3.85 billion bid for a mortgage business and loan portfolio from bankrupt Residential Capital LLC.

    The offer “certainly indicates that he thinks the worst is behind us,” said Jeff Matthews, author of “Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett.”

    “Yes, he’s been wrong about housing before,” Matthews said. “But if you look at any credit metric, if you look at any of the banks and what’s happening in their loan portfolios, it’s getting better.”

  17. Don’t we always get a bump up at around June-July-August? This madness could have a lot to do with seasonality (plus the low rate and the still favorable price). A cooling down could be in the forecast. Just my opinion.

  18. Zillow values on homes I check regularly have gone up quite a bit (+$30k-$40k) in CV recently.

    Was in Ambervale home in early 2011, highly upgraded (but some misses like laundry in garage), biggest issue is it is overdone for neighborhood (neighboring homes selling for mid $600′s). Can’t wait to see what it sells for. I would have thought value was in mid $800′s. Fact it sold quickly says alot for this market, I think. They tried to sell it mid-late 2011 with no luck.

  19. Fed’s low interest rates fueling interest. Renters’ pent-up frustration and flippers’ greed starting to ignite the market. Summer out-of-towners, who don’t have a clue, will stoke them flames. It’s a good time to be a real estate agent gain.

  20. I remember the tax credit expiration doing this to the lower end markets back in the spring of 2010. It’s probably a similar driving force now in the higher end. Nobody thinks these low rates are going to last so better hurry up and buy before they start going up. There’s plenty of intelligent analysis that figures this might be the low point/bottom for out of pocket monthly expenses. A deflationary recession that isn’t met with money printing is about the only thing that could go wrong for today’s buyers. Who really thinks the fed isn’t going to money print if things go poorly in the economy.

  21. I think we got in at a great time!

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