Whether you are part of the multi-gen craze or not, it has impact on the choices available – virtually all builders are going for the big bombers, and hope buyers will adjust. These cost $2 million or more by the time you’re done:
Category Archive: ‘Carmel Valley’
We did open escrow before Thanksgiving on the sale of the two-bedroom home in Trilogy 2 in Carmel Valley.
The MLS entry had been on Friday morning, with open house scheduled for 12-3 on Saturday and Sunday. The weather was somewhat overcast, it is a gated community, and it was the week before Thanksgiving – how many would attend?
Being the least-expensive detached-home in the whole zip code probably drove the activity, and we had parades of people both days. By Tuesday, I had received seven written offers!
Here are my notes:
- As what usually happens, the first person who came to Saturday’s open house was probably the most-motivated – and made a great offer, though not right away. I didn’t get any offers until Sunday, which made me think that buyers were either being very diligent about price, and/or strategic about delaying their offer, knowing that we were doing open house on Sunday (it is better to wait until after Sunday’s open house and get a feel for the action).
- Not only were the offers rolling in slowly, but they were also very orderly about price – nobody was going much over list, so it was a real horse race. The comps were a problem, for a number of reasons; a) All three Trilogy neighborhoods use the same street name, Carmel Creek (making them all sound the same), b) some of the comps backed to busy streets, c) there is a 1,409sf, and a 1,410sf model, but they aren’t that similar. To help buyers sort it out, I produced a simple map:
If I had a chance to do it over, for easier reading I would group 1,3,7,8,10 as the more-valid comps, and those with street noise (2,4,5,6,9) as the inferior group.
3. We issued requests to every buyer for their highest-and-best offer, which helps to make it a fair race – the early offerors may not have known how competitive it is, and they deserve a chance to re-bid. Another benefit of requesting highest-and-best offers is that it buys time for other buyers to get in the game. In this case, the winner saw the house on Monday, and made offer right away.
4. I was working the phones all weekend, so once we opened escrow on Tuesday, I thought the action might die down. But I got another handful of calls from people who saw a rental ad in Craigslist – and it’s not the first time it’s has happened. Somebody took my pro photos and remarks off my listing and created a Craigslist rental ad for $1,975 per month, which is well under market. It is a scam that has been running for years – the guy on the phone tries to convince people that the rent is so attractive that you won’t mind sending the first and last month’s rent to a faraway address and wait by your mailbox for the keys. But they never come.
I notified Craigslist immediately, and they are quick to take these scam ads down, but you feel sorry for anyone who gets duped.
A lively day at open house in Carmel Valley, the hotbed of San Diego real estate. A flood of lookers, but as of Saturday night, no written offers…yet. Open house 12-3 on Sunday!
Holy cow – only $729,000 for a spectacular detached-home in gated Trilogy!
This is one of the premium locations high up the hill and away from road noise. The kitchen has been updated with new stove, refrigerator, dishwasher and backsplash, plus there is new carpet, new paint inside and out, hardwood floors, and the backyard is a tropical oasis with privacy!
Located in the coveted Del Mar school district too – where the least-expensive detached home for sale today is $899,000 – WOW! Close to the I-5 Bypass/Carmel Mountain Rd. exit – skip the traffic jams – and only 3 miles to the beautiful Torrey Pines State Beach!
Open 12-3pm Saturday and Sunday!
It’s that time of the year – the 2017 forecasts are starting to roll out!
Zillow has been conservative about our local markets. For the most part, the actual appreciation of the Zillow Home Value Index has been higher than their forecasts over the last two years.
Their local forecasts for 2017 are all lower than their 2016 guesses, and what they are predicting could also be described as ‘Flatsville’. If their local forecasts of +0.9% to +2.2% come true, it would mean that several sellers would end up selling for less than they could have gotten in 2016.
Are we ready for that yet?
Local ZHVI-Appreciation Forecasts
The Zillow data changes slightly, depending on where you look on their website, and whether you use town names or zip codes. Here is the LINK to find others.
Our favorite doomer went off again this week, focusing on how the high-end inventory has grown recently in the hot markets:
The graph above shows the inventory of Orange County homes listed for $1,300,000 or higher (San Diego wasn’t included but is similar to the OC).
Mark likes to believe that prices have to fall – his quote:
In other words, higher-end real estate prices have much more air underneath them than lower-end prices have air above them. The resulting house price compression will accelerate taking all price bands lower until the higher-end housing market can catch a macro bid.
Here is how inventory in our higher-end areas have changed since May 26, 2015:
|Del Mar & Solana Beach|
Yep, our inventory in the tonier parts of town is higher but it has been so low lately that an extra 20-40 or so houses on the market in each area isn’t going to hurt much. These are the only numbers I have for comparison, and May vs. August isn’t that great either – there is more build up of the unsuccessful sellers in every August.
Most importantly, the high-end sellers have more horsepower – they can hold out longer, and in most cases, will only sell if they get their price.
Rancho Santa Fe has been the harbinger of what we can expect elsewhere – lots of listings sitting around not selling, but few lowering their price – they are happy to wait.
Unless we get a surge of boomer liquidations, the worst thing that will happen is the whole high-end market will go stagnant.
If you have concerns, just buy in Carmel Valley. In the first 7 months of 2015, there were 276 houses sold in the 92130, and this year there were 321 – a 16% increase! And that doesn’t include the 100+ new CV homes sold this year.
Carmel Valley pricing statistics have been flat though. The average cost-per-sf only went up from $413/sf to $419/sf, and the median sales price actually went down from $1,178,000 to $1,124,000. It’s probably a reason why they’ve had so many sales!
I don’t know the exact location of the new tract coming soon, but it will be a gated community off RSF Farms Rd.
Our regular commenter elbarcosr backed me up on how wacky the zestimates have been lately. They seem to be getting worse, which is hard to believe.
Being a Zillow homer now, I thought I better look into it.
Let’s serve up a nice big softball. Certainly the zestimates have to be accurate on recently-sold homes, don’t they? We saw how Redfin’s evaluator can cozy up close to a recent list or sales price, and you can’t blame them. After a few years, the database would look pretty consistent.
Does Zillow do the same? Wouldn’t it make sense to have your algorithm compute a recent sales price into the property’s zestimate? Because if you did, it would also help value the nearby homes that haven’t sold recently – because that’s how everyone would value them.
Evaluations in unique, non-tract areas is tougher. But if we are just looking at recently-sold properties, and their zestimates – the uniqueness shouldn’t matter as much!
I looked at 28 homes sold in La Jolla, Del Mar, and Rancho Santa Fe that closed between $2,000,000 and $3,000,000 in 4Q15, and compared their sales price (the definition of value) to their zestimates.
The average margin of error was 16%, and after removing the four that were wrong by more than $1,000,000, the average error was still 12%.
These are houses recently sold, and their sales price defines the actual value!
Even though the $2,000,000 to $3,000,000 range is the lower end for those areas and there are plenty of comps to help pin-point a zestimate, let’s consider an easier target.
Carmel Valley should be the hotbed of zestimate accuracy, especially when we look at the low-end where every data point is a pure tract house.
There were 57 CV sales in the fourth quarter between $1,000,000 and $2,000,000 that were considered.
The average margin of error was 3.6%, which is probably acceptable. But if it was any higher, there would be concerns – these are tract houses that just sold in 4Q15, and have a long history of steady comps around them!
The only zestimates that might be close are in pure tract neighborhoods.
Disregard all others.
There hasn’t been a sale in Derby Hill, one of the premier newer tracts in Carmel Valley, in almost six months. Will buyers mind picking up where they left off last summer?
Most national forecasts are predicting a 3% to 4% appreciation rate for 2016, which has to be a safe bet. If it comes in anywhere from -2% to +8%, you can say that you were close.
Zillow has enough algorithms that they are willing to make predictions for each local area. They have conflicting numbers, depending on where you look on their website – these are from the Home Values section:
You can see that Zillow was less optimistic last year too. Most were predicting that mortgage rates would be in the mid-4s by now, so the lower rates in 2015 helped fuel higher-than-expected prices. Could rates stay right where they are? Maybe, but both Zillow and I think the euphoria will die down next year:
Zillow Price-Appreciation Predictions
For some reason, Zillow is also labeling each market from Warm to Very Cold. The labels don’t seem to correspond to the predictions, so I don’t know their intent – are they just trying to tell you to put on a sweater?
How will buyers feel about getting worked over for that last 2% to 3% when they see they are in a ‘Very Cold’ market?