A tour of the most-recent listing of a CV canyon-front home, in DH. I saw the house on Raven Hill that sold for $1.9 million, and I liked this backyard better:
Category Archive: ‘Carmel Valley’
Why does a frenzy only last for a year? Because of the sellers’ disease.
Reader Sue left this comment:
In Carmel Valley, I’ve seen some very premium Lexington’s go for a high price ($1.9m) but they were on extremely large view lots. Afterwards, it seemed like anyone with a Lexington or Derby Hill priced their home at simply ridiculous prices ($2 million or more!) and now I seem these homes sitting unsold on the MLS. Excluding the few extraordinary homes, other CV homes seemed to have increased in price maybe $100-$150k in the past 2 years, but I don’t see prices going up the $300k that sellers have priced into them (versus prices from 2 years ago). And the more homes that sit on the market, the lower their prices will be.
We’ve noticed more CV canyon-front homes coming on the market in 2013. It used to be that you could expect to find one around $1,500,000, but this year a couple of sellers created new highs and now many are jumping in, hoping to capitalize on the good fortune.
One of the signs of a stalling frenzy is how sellers price their homes based on the active listings, not the solds.
Sure, there has always been some of that built into every seller’s price, but today’s euphoria is causing some huge pops in list prices.
CV Canyon-Front Scorecard:
13 active listings between $1.659 and $2.195 million.
3 went pending in April, none pending in May.
2 closed over $1.7M this year.
Everyone is hanging their hat on this sale - it closed for $1,900,000 last month:
Because one buyer paid a premium for a house that had everything going right for it doesn’t mean that there are dozens waiting to PAY THE SAME. There are buyers waiting, but they want to pay less, and hope that a glut is forming that will cause sellers to lower their price.
It is a timing issue too.
Sellers all think that this is the prime-time selling season, and their lucky buyer will be walking through the door any minute. They are ignoring how much competition there is, and how many aren’t selling.
A smart seller would drop their price now and be the first one out, but it’s more likely that they will all wait until mid-summer. In the meantime, expect the frenzy to die down a bit.
Pete was wondering if this is a good time to buy a house in Carmel Valley for $1.0 to $1.2 million. We know it’s been hot all around the 92130, so let’s examine the market data higher up to see if there are any threats from above.
In the first half of 2012, there were eight canyon-front Belmonts, Lexingtons, Derby Hill, and Promontory homes that sold between $1.167 and $1.6 million, plus one big bomber closing at $1.7 million.
This year there has been a flurry of canyon-front homes that have listed since April 1st with higher pricing. The list is now up to eleven homes priced between $1.45 and $1.925 million, a healthy increase year-over-year.
Are they selling?
If none of them had gone pending by now, we’d call it a glut.
But there have been five canyon-front homes go pending since April 1st (two listed in March, and three listed in April), so the higher-end buyers who don’t want to wait to pay $2,000,000+ at for Alta Del Mar are picking out the best of the bunch.
This house was listed in 2011 on the range $1.375 to $1.45 million – but did not sell. This year they listed for $1.59 to $1.69 million, and it was marked pending within 9 days:
As other potential buyers see these go pending, and then close escrow near list price, they will probably jump in too and make the best deal they can on those remaining for sale.
So with the somewhat-healthy action above, it probably is a good time to buy in the hotter $1.0 to $1.2 million range – if you can find the right house, at the right price!
Get good help!
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|
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.
Four new listings of canyon-front Carmel Valley tract houses have hit the market in the last week. They joined three other similar active listings nearby, creating a full selection for buyers.
One agent commented that they have a canyon-front listing in Derby Hill coming up shortly, which will make it eight active listings – and potentially reaching a saturation point.
Another agent remarked, “But we have comps now”, which is true. One closed for $1.755 last week, and another listed at $1.895 is pending.
Will those be enough to keep buyers jumping?
A flood of new listings in any area should delight buyers, causing them to gobble them up….or will they consider it frenzy overload, especially at these new price points?
The Torrey Hills/Carmel Country Highlands area already has to contend with the new homes being sold at nearby Alta del Mar.
Will buyers start to hesitate when they see more listings?
This could happen in any area. If you are thinking of selling and see inventory growing around you, well, you know what to do – call Jim the Realtor!
Well-wishers have been checking in over the last few days after seeing the BW exposure. Most give me the elbow and some version of “Boy, I bet you’re digging this market now!”.
It’s not as rosy as it might appear, especially for the buyers who hope to make a calm, rational decision based on observable value.
Offers tendered on behalf of different buyers over the last couple of days:
Offered 4% under list price – listing agent wouldn’t counter.
Offered 5% over list price - no counter or highest-and-best round, just the Dear John letter: “The offer that came through was quite extraordinary”.
Offered 7% over list – lost.
True, these are desirable properties which deserve attention. But the competition is fierce, and may be ramping up.
Here are detached-home listing stats for three selected areas:
Carmel Valley – The higher-end of 92130 looks like a robust, healthy market. The Under-$1M market looks like it’s on fire though, with 2.2x as many pendings as actives:
2013 SOLDS: 65
2013 SOLDS: 52
Encinitas – The in-between market looks identical to CV, with the lower-end market having 2.5x as many pendings as actives!
2013 SOLDS: 66
2013 SOLDS: 39
SE Carlsbad, 92009 – A very attractive area where you can still buy newer tract houses for less than $300/sf – probably no surprise that there are 1.8x as many pendings as actives under $1,000,000!
2013 SOLDS: 113
2013 SOLDS: 19
It’s not that there is no inventory – these combined sales are 20% higher than last year’s count. There just aren’t many unsold houses laying around, and virtually none of the well-priced, quality homes we all desire!
One year ago the same model across the street sold for $989,000:
Around Carmel Valley, 92130 it looks like we regained the ground lost over the last couple of years, and buyers are back to paying $340/sf.
On the MLS, there are 72 active listings, and their median list price is $1,422,999 – with only 18 houses for sale under $1,000,000!
The median list price of the detached homes sold over the last 90 days is $922,000, with 64 of 111 sales under $1,000,000.
The lower-end is cooking, yet seller enthusiasm is causing more and more to push into the higher ranges in hopes of striking it rich:
Buyers were probably resigned to paying a little more – will they break out of the range and follow sellers up the ladder?
It happened like that in 2003, and we saw 20% appreciation in one year. It could happen again, and if it does, you’ll see it in the prime areas!
SE Carlsbad sellers caught on a little later, but are on the same path – and the Encinitas graph was very similar to this too:
It means that buyers will either have to step up further, or we’ll be experiencing the Big Glut over the next few weeks.
Rancho Santa Fe knows the feeling – they always have a glut of homes for sale. In 92067 there are 203 homes for sale today, with an average market time of 131 days, and there were 13 homes sold in the last 30 days:
Will all areas end up looking like Rancho? Yes, it is very likely that sellers will price too high and not adjust, thuinking that the selling season is coming later to bail them out. They are already way ahead of buyers, and only the premium properties have a chance of selling for retail-plus.
Statistically it will look like 10% to 20% appreciation of the few homes selling!
Redfin allows use of their graphs.
Let’s look at the detached-home sales closed over the last 30 days and compare the sales prices to the list prices.
Carmel Valley, 92130 Feb 28 – Mar 30
|# of Sales|
|Avg Days on Mkt|
(20 of 49 went pending in 9 days or less)
13 of 49 sold for over list price (or over top of range):
$0-$10,000 over list: 4
$11,000 – $25,000 over list: 6
$26,000 – $50,000 over list: 2
$51,000+ over list: 1
Carmel Valley is arguably the hottest market in the county, yet only 27% of the sales went over list price. Less than 10% (3 of 49) went crazy-over, paying more than $26,000 above list price. The hottest action was in the lower range too, only 3 of the 20 sales over $1,000,000 were above list price.
A good example here on how the median sales price is more about the mix of houses selling than being an accurate reflection of pricing – will anyone in CV believe that their house went down 5% in price over the last year?
Three of the 49 sales were double-ended (buyers were represented by the listing agent), plus two that were sold prior to listing input.
SE Carlsbad, 92009 Feb 28 – Mar 30
|# of Sales|
|Avg Days on Mkt|
(21 of 52 went pending in 9 days or less)
13 of 52 sold for over list price (or over top of range):
$0-$10,000 over list: 5
$11,000 – $25,000 over list: 4
$26,000 – $50,000 over list: 2
$51,000+ over list: 2
SE Carlsbad is loaded with newer tract houses, and about half of the 92009 is in the Encinitas/San Dieguito School District. Yet only 25% of the sales went over list price. Less than 8% (4 of 52) went crazy-over, paying more than $26,000 over list price. The hottest action was in the lower range too, there were no overbids once the sales prices got above $860,000.
Four of the 52 sales were double-enders.
The frenzy is focused on the premium products – the renovated houses in good locations with attractive prices. If the frenzy is not for you, there is still plenty of opportunity, especially if you like fixers and/or are patient enough to let the OPTs sit for weeks or months!
Here are snippets from the VIP Grand Opening of Alta Del Mar.
There were a number of people there hampering the videography, but it wasn’t overly crowded – why?
Because they already have 170 buyers who have pre-qualified with the builder’s lender to be on the list to purchase:
1. Semi-custom tract homes priced between $1,875,000 and $2,400,000, or
2. Vacant lots priced from $740,000 to $2,000,000 for custom homes.