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!