Are local home prices off to the races?
We are attracted to the sensational stories, where houses are selling for more than 10% over recent comps. A solid $650,000 offer wasn’t enough to win the bidding war on this house, even though the last three model-match sales were $576,000, $591,000, and $605,000 in September-November of last year.
But statistically, the average price-per-sf looks much more mundane, and demonstrates how specific home buyers are about values, and how much they are willing to pay.
Here are the monthly cost-per-sf averages, splitting the NSDCC into two parts:
NSDCC North – Cardiff, Carlsbad, and Encinitas:
(The current averages for January, 2013 are tacked onto the end of the 2012 purple trend line)
Average prices look remarkably range-bound until recently (this month), and it will take a few more months to know if the pricing increase will stick. It appears that Y-O-Y changes in sales may level off, or start dropping. In the last two Januarys we’ve had 85 and 89 sales in NSDCC-North, and only 64 have closed this year with four days to go.
NSDCC South – La Jolla, RSF, Del Mar, Solana Beach, and Carmel Valley:
A big surge in November and December, but so far the average pricing of the 56 sales in January are right back in line with the range/trend (the last two Januarys had 64 and 66 sales).
November’s Case-Shiller Index will be released on Tuesday. The local SD Case-Shiller Index has increased nine months in a row, with October’s reflecting a 6% increase year-over-year. It was noted last month that Tuesday’s report should be eye-popping (as much as +10% increase Y-O-Y), and just in time to inflate seller expectations for the spring selling season.
Hopefully it will cause more sellers to list their home for sale. In areas where there is a surge of listings, buyer expectations could soften unless the list prices are reasonable enough that they cause some sales momentum.
Yes, it’s true – your price causes the sale, and how your agent handles it determines if, and how much, it goes up or down from there.
I can spend $1,000,000 on advertising and do open house every day, but if the price isn’t right, it isn’t going to sell.
Good write-up on CR.
http://www.latimes.com/business/realestate/la-fi-calculated-risk-20130127,0,7234366.story
From the great article (with new photo and several personal insights):
“He was one of the first people to stand up and, objectively, just by brutally falling back on the facts, just say that the emperor didn’t have any clothes,” said longtime reader Stan Humphries, Zillow.com’s chief economist. “It was this deep mystery about who this guy actually was. I remember the first time I went and met him, it was like meeting Batman.”
I’ll have to forward that CR article to my husband. When we knew we were being relocated to CA I started to do research and found BubbleInfo, CR and some other sites. My husband thought my data was coming from crazy, over-reacting dummies on the internet!! We bought end of Dec 2010 and in our town of LA that turned out to be close to the bottom. I had tracked the local market for 3 years before we relocated and bought … my “crazy” sources were invaluable.
Would love to shake his hand and express my gratitude for what he has done and the benefit I received.