Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!
Carlsbad
(760) 434-5000
Carmel Valley
(858) 560-7700
jim@jimklinge.com
It seems that everyone is looking for $400/sf around Carmel Valley now. At this pace, it may only take a few more months!
Carmel Valley Annual Stats
| Year | Median SP | Avg $/sf | Avg DOM |
| 2010 | |||
| 2011 | |||
| 2012 | |||
| 2013 |
The Carmel Valley YTD sales are 32% higher than last year at this time, and the pendings look strong too. There are 89 detached homes in escrow, with list prices averaging $381/sf and a median list price of $1,025,000. They average only 20 days on market.
More bubble talk in this article from the latimes.com – an excerpt:
More investors are buying homes to quickly sell again at a profit.
“Everybody I know is trying to do flips right now. It’s like the day trading of the 1990s,” Nordine said. “We went straight from Armageddon to speculation; there was nothing in between this time.”
Still, Nordine is advising clients to buy now if they can, citing low interest rates and low risk of another foreclosure crisis.
“That is how the American economy works now,” he said. “It seems as if we just go from one bubble to the next.”
There is a distinct difference between the home price run-up of the last decade and the current upswing. During the previous boom, listings abounded and sales soared. Now, rising prices are driven by a shortage of supply. And although underwriting standards may be relaxing, they remain tight when compared to the days when lenders issued enough subprime loans to crash the U.S. economy.
Christopher Thornberg, founding partner at Beacon Economics, said today’s market remains rational, despite a rise in prices.
“It’s not a bubble by any stretch of the imagination,” he said of the recent price gains. “If you can’t borrow, you can’t speculate — that is the primary thing that will prevent this from happening.”
http://articles.latimes.com/2013/apr/12/business/la-fi-housing-bubble-20130413
One year ago the same model across the street sold for $989,000:
This is an extreme case, but it is early – we might see more like this in the months to come.
You can buy this same model two doors down today for 20% less, and a detached version of this model closed in October for 10% less. Will the newly buffed-out sink add that much value?
Just a few stories from the street – many are not selling too:
1. An agent told me of an Irvine short-sale that he “comp’d” at $550,000, but listed for $525,000. They wanted to make the price attractive to sell it right away, and only did one open house. He had 37 offers, with two over $600,000:
http://www.redfin.com/CA/Irvine/89-Passage-92603/home/5895173
2. This Oceanside REO got the typical Wells Fargo carpet-and-paint treatment before hitting the market for $359,900 last Tuesday. They received 25 offers, and took $397,500 cash from an owner-occupant buyer. (10.4% over list):
http://www.redfin.com/CA/Oceanside/2092-Tiffany-Dr-92056/home/3393861
3. The previous sellers paid $670,500 in September, 2010, and these sellers paid $795,000 in June. They put it back on the market for $869,000 in November with nothing changed – they even used the same photos from the previous listing! Yet, it only took 24 days to go pending:
http://www.redfin.com/CA/Carlsbad/3242-Sitio-Avellana-92009/home/22496850
4. These sellers paid $829,000 for this in 2010. The model-match sales since then have been $680,000, $720,000, $740,000, and $762,500. They listed for $875,000 to $925,876, and only had one exterior photo, yet went pending after two days:
http://www.redfin.com/CA/San-Diego/13273-Courtland-Ter-92130/home/4458979
Photo from previous listing showing the view/pool, which doesn’t look that spectacular:
5. This hit the MLS on the Friday after Thanksgiving, and had four offers within 24 hours:
http://www.redfin.com/CA/Carlsbad/3474-Circulo-Adorno-92009/home/3871106
It’s a hot market – for a few lucky folks!
Hat tip to Kingside for sending this along:
Remember the days when residential real estate gained equity each year? It’s happening again in California, and a year from now homeowners could see as much as a 20 percent increase in the median price of homes across the state, according to Bruce Norris, a Riverside-based real estate analyst and principal of The Norris Group.
“My best guess is that California we will have significant price inflation. Prices could escalate so strongly that we will think we are in 2004 instead of 2013.”
Some may ask how this is possible. But Norris has experience predicting the unpredictable.
A real estate consultant, investor and educator for the past 30 years, Norris publicly predicted the current sub-prime lending and foreclosure crisis in January of 2006, more than a year before the nation’s leading economists and real estate industry analysts would even acknowledge the possibility of a downturn. Norris also correctly forecast both the real estate boom that began in 1997 and the subsequent doubling of home prices.
Norris now says he has identified three reasons why median home prices in California will go up.
For starters, he said, policy decisions have resulted in record low inventory levels.
“In many areas,” Norris said, “there’s one month of inventory. Inside of that one month of inventory are very few REOs and a lot of short sales that may or may not really be available to buy and close anytime soon. The properties that would normally be purchased by owner occupants are being snapped up by billion dollar hedge funds. These hedge funds, unlike the smaller investor types, are keeping all of the properties as rentals. There’s a little inventory for sale by ‘normal sellers with equity,’ but, right on cue they are getting the idea their property just might be worth more than the last sale.”
With the absence of inventory, Norris predicts, prices will escalate.
A second factor paving the way for the rise in median home prices in California is the return of the former homeowner who was foreclosed on in 2008 and 2009.
“The numbers of trustee sales in those years were staggering,” Norris said, adding, “As a percentage of whatever had happened in the past, 2008 and 2009 will go down in history as the California Real Estate Collapse of all time. The numbers differ across the state but the percentages are similar. In San Bernardino, the numbers of foreclosures exceeded the number of sales in 2008 and 2009. Fast forward to 2012 and you now have those same people ready and capable of buying a home again.”
So, how is it these people can buy homes so soon after going through a foreclosure? The answer, Norris says, resides with FHA, which will now make a loan to a buyer who lost their home via foreclosure after three years. “Buyers have realized that their house payment would be less than their rent, and that’s fueling demand and pushing up home prices,” he said.
The third factor setting the stage for a significant increase in median home prices is interest rates. “Interest rates are at all-time lows, and that allows for price increases to take place without significantly increasing mortgage payments,” Norris said, adding that he expects California’s median prices to up by as much as 20 percent during the coming year.
There have already been a smattering of CV sales at or above peak pricing, and I said today that within two years the 92130 detached-home sales will be at or above 2006 prices:
Sept 2006: 32 sales, $370/sf.
Sept 2012: 43 sales, $326/sf.
Statistically, we’re only 13% apart in the numbers above, and we could make that up by the end of next summer. When the inferior homes are gaining steam that it really becomes apparently that prices are on the move. True, the house featured in today’s video hasn’t sold yet, but with only 22 resales listed under $1,000,000, it stands a decent chance of selling.
The same model two doors down from this one sold for $935,000 at the very peak, July, 2007.
This is listed for $929,900:
For buyers, these will be easy to ignore, but they are part of a disturbing trend. Can sellers unite on price, and hold out? If so, it will be a very long cold winter – unless buyers are willing to pay more!
I mis-spoke on the first one, it was only on the market nine days when it sold in March.
Hat tip to Another Investor for sending this in, from CBS San Francisco:
SAN RAMON (CBS 5) – Would-be homeowners have been camping outside a new subdivision in San Ramon, some of them for weeks, in hopes of buying a home this weekend.
A new phase of homes in the Gale Ranch community will go on sale Saturday morning, with asking prices starting around $700,000.
“We’ve been here for more than two weeks. We have camped here day and night so that we are number one on the list,” said Komal Dutta.
“For new homes, lines, lotteries, luck of the draw, very competitive, very stressful,” said Bill Clarkson of Golden Hills Brokers. Clarkson, who is also Mayor of San Ramon, has worked in the area for 34 years. He said the market hasn’t been this competitive since before the housing bubble burst.
“Inventory has been shrinking since February. We’ve seen San Ramon have up to 250 homes on the market. It’s dropped to around 70 or 80,” Clarkson said.
Remember this REO listing in La Costa Greens?
It sold for $1,348,000 when new in 2005, but after the bank foreclosed in 2009, they listed it for $891,000 – which sparked a bidding war and it eventually closed at $990,000 on 11/5/09.
It just sold again yesterday…..for $1,300,000 cash.
http://www.sdlookup.com/MLS-120017905-6869_Amber_Ln_Carlsbad_CA_92009
BTW, I just renewed my alternative web address, www.doublebubbleinfo.com.
Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!
Carlsbad
(760) 434-5000
Carmel Valley
(858) 560-7700
jim@jimklinge.com
