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Jim Klinge
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701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011

Posted by on Nov 15, 2012 in Bidding Wars, Frenzy, Inventory, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 0 comments | Print Print

CA Home Prices Rise 19% in Oct

I was quoted yesterday by an AP reporter, who was doing a story on the last month’s sales that included a very sexy headline, “California Home Prices Rise 19% in October”:

Jim Klinge, a broker in north San Diego County, said one of his customers bid on 14 properties before finding a $400,000 home in Vista last month.  “You can’t say there’s no inventory, it’s just that it’s getting bought up right away,” he said.

We discussed a few other points:

1.  I said that there has been a shortage of active listings, not overall inventory. 

The number of MLS listings in San Diego County this year is only about 9% fewer than last year – here are the YTD counts of SD listings through November 14th:

2009 – 64,300

2010 – 67,000

2011 – 62,800

2012 – 56,900

In spite of the fewer choices, year-over-year sales have jumped 12%:

San Diego County Sales, Jan 1 – Oct 31:

Year Jan-Oct Sales Avg $/sf

The combination of 9% fewer listings and 12% more sales has been enough to dramatically increase the competition for the good buys, and expect that to continue – or get more intense – for as long as rates stay in the 3%-4% range.

In the springtime we should see 5-10 offers on every decently-priced listing.

2.  I said that there has been a late-season surge this year.

NSDCC detached-home sales kept accelerating August, rather than tapering off, and the momentum has been continuing through the fourth quarter – there have been 95 closings this month, which is 34% higher than the same period last November, and that’s not counting the late-reporters:

At this rate we should get off to a quick start in 2013.

3.  I said that people are buying a mortgage, more than they are buying a house.

The payments are so low that people are compromising on quality of home and/or price to get in now.  This will likely lead to noticeable price appreciation; probably 5% to 10% over the next 12 months in select neighborhoods.

4.  I said next year will be extremely active, and be in a full-frenzy state.

The election is out of the way, rates continue to hit all-time lows, the media says that the economy is improving, flippers are making a killing everywhere, and the buzz is back throughout the populace.

I’ll go into more detail in the coming days and weeks!