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Category Archive: ‘North County Coastal’

Existing Home Sales, July, 2016

nar

Our N.A.R. head cheerleader does his best at fabricating a believable story behind the 3.2% drop in existing-home sales:

Lawrence Yun, N.A.R. chief economist, says existing sales fell off track in July, after steadily climbing the last four months.  “Severely restrained inventory and the tightening grip it’s putting on affordability, is the primary culprit for the considerable sales slump throughout much of the country last month”, he said. Realtors are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.

He needs to follow me on twitter.  I’ve already pointed out twice that there were 9% fewer days in July than in June – and sales only dropped 3.2%?  Sounds like a positive to me.

But instead he feeds his typical bather to America, and leaves it up to the consumers what to make of it.

He should also point out that 2015 was a hot market, with summer sales exceeding those during the super-frenzy of 2013.  Yet sales over the last four months have been close or surpassed those in 2015!  Even with the two fewer days, look how July, 2016 compares to previous years – it was better than 2013!

Yunnie needs say, “Remember, real estate is local”, to end all of his speeches.  This national data and his blunder of an explanation shouldn’t have any impact on local market conditions.  But they could make a difference if casual readers just grab a headline and decide to pack it in for the year.  Thanks Yunnie – you’re supposed to be on our side!

The local scoop:

Detached-Homes
July, 2013
July, 2014
July, 2015
June, 2016
July, 2016
NSDCC # of Sales
297
271
313
298
262
NSDCC Median SP
$930,000
$1,018,000
$1,025,000
$1,204,500
$1,125,000
SD Co # of Sales
2,401
1,992
2,437
2,360
2,151
SD Co Median SP
$480,000
$513,750
$550,000
$565,000
$562,000

NSDCC detached-home sales in July dropped 12% compared to June, with 9% fewer business days. With higher prices, sales should be declining – and for them to drop a net 3% sounds good to me. House sales in San Diego County dropped 9% month-over-month – let’s call it even.

P.S. Regarding his comment that realtors are reporting diminished traffic, it’s because you are sitting on over-priced listings. Lower the price and get in the game, or go get another listing!

Added later – looks great:

months supply

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Posted by on Aug 24, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check, Why You Should List With Jim | 3 comments

NSDCC Actives/Pendings

windansea

In June, we checked the local markets by comparing their active-to-pending ratios, which historically have been relatively ‘healthy’ when around 2.0.

Since then, the ratios in four of the eleven areas have improved (gone lower), including Del Mar, La Jolla and Rancho Santa Fe – wow!

Area
Zip Code
June ACT/PEND
Aug ACT/PEND
June Ratio
Aug Ratio
Cardiff
92007
21/9
28/8
2.3
3.5
Carlsbad NW
92008
45/23
54/24
2.0
2.3
Carlsbad SE
92009
113/69
120/59
1.6
2.0
Carlsbad NE
92010
13/18
17/19
0.7
0.9
Carlsbad SW
92011
53/34
47/32
1.6
1.5
Del Mar
92014
73/23
68/27
3.2
2.5
Encinitas
92024
108/81
118/66
1.3
1.8
La Jolla
92037
221/46
215/49
4.8
4.4
RSF
92067
247/30
246/39
8.2
6.3
Solana Bch
92075
26/9
31/8
2.9
3.9
Carmel Vly
92130
132/80
116/64
1.5
1.8
All Above
All
1,052/428
1,060/395
2.5
2.7

Most importantly, there hasn’t been any explosions of additional active (unsold) inventory in a month when we usually see the peaks of the year.

Posted by on Aug 17, 2016 in Actives/Pendings, Jim's Take on the Market, North County Coastal | 1 comment

Higher-End Inventory

orangeco

Our favorite doomer went off again this week, focusing on how the high-end inventory has grown recently in the hot markets:

http://mhanson.com/8-9-hanson-house-supply-surging-time-highs-toxic-trend-change-suddenly-focus/

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:

Area
5/26/15 Actives
Today’s Actives
Diff
Del Mar & Solana Beach
73
99
+36%
Encinitas
91
110
+21%
La Jolla
185
218
+18%
RSF
237
275
+16%
Carmel Vly
116
126
+9%

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!

Posted by on Aug 11, 2016 in Carmel Valley, Jim's Take on the Market, Market Conditions, North County Coastal | 0 comments

NSDCC Sales – July

happy news

In the recent past, we have had a real drop-off from June to July in NSDCC sales.  But this year the decline was only 5%, and once the late-reporters are done, it should be close to even:

Year
# of June Sales
# of July Sales
July Median SP
2012
339
258
$850,000
2013
333
297
$930,000
2014
322
271
$1,018,000
2015
336
313
$1,025,000
2016
296
275
$1,125,000

Monthly pricing statistics will bounce around, so watching the trend in sales is the name of the game. A series of significant declines would indicate trouble, and so far there hasn’t been any!

Posted by on Aug 4, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

NSDCC Action

Here’s another way to dissect the current market conditions:

Price
Active Listings
%
Pendings
%
Solds last 60 days
%
Under $1M
155
13%
140
34%
213
36%
$1M – $2M
437
38%
207
50%
273
46%
Over $2M
569
49%
65
16%
103
17%
Totals
1,161
100%
412
100%
589
100%

The lower end is starved for inventory, and the high-end is bloated with offerings!  The majority of the high-enders must be hoping to downsize, but it’s not killing them to hold out. It’s easier to stay put in comfortable surroundings and pay higher utility bills until that young family with 2.2 kids comes along.

For those high-enders who really want/need to move, just lower your price – the 103 closed sales in the last 60 days shows you how affluent this area is!

Posted by on Jul 15, 2016 in Jim's Take on the Market, North County Coastal | 0 comments

NSDCC 2016 Sales Predictions

NSDCC Quarterly Sales

The rest of the year is shaping up quite nicely – if all that matters are stats.

After a slow start in 1Q16, we closed 909 sales in the second quarter!  After a strong 2015, there was some expectation for a pullback this year, but not yet – we exceeded the 2Q15 total of 901 sales!

Can we predict the rest of 2016?

We had similar second-quarter counts in both 2012 and 2015 as we did this year, and in both years the 3Q counts dropped off about the same (845 and 832).  With the attractive mortgage rates we should at least equal, and hopefully do a little better?  Let’s predict 850 NSDCC sales for the third quarter of 2016.

The last 3 fourth quarters have been almost identical – sales counts in the 660s.

We had 556 + 909 = 1,465 sales in first half of 2016.

Today we have 416 pendings.

Predicting 850 + 660 = 1,510 sales in second half of 2016.

Here are the NSDCC quarterly sales numbers:

Quarter
2012
2013
2014
2015
2016
1Q
577
672
581
629
556
2Q
900
998
849
901
909
3Q
845
884
753
832
850?
4Q
832
664
666
662
660?
Total
3,154
3,218
2,849
3,024
2,975?

What needs to happen to ensure a vibrant second half of 2016?

Buyers need to make offers.

Sellers aren’t going to go first.

Even if they did lower the price, it won’t be by much.  Mid-summer is here, and buyers have more permission. It’s not April any more!

Posted by on Jul 12, 2016 in Forecasts, Jim's Take on the Market, North County Coastal | 0 comments

NSDCC June Sales and Pricing

bump

When comparing the 2016 activity to previous years, we stack up pretty good – when we combine months.

Here are the links to May/June and Jan-Jun numbers.

But when we look at June only, it looks like we’ve hit a bump in the road:

June Sales and Pricing

Year
# of Sales
Avg Cost-per-SF
Median Sales Price
2012
339
$368/sf
$867,500
2013
333
$453/sf
$1,025,000
2014
322
$481/sf
$1,077,850
2015
336
$484/sf
$1,116,000
May16
326
$498/sf
$1,208,750
2016
286
$512/sf
$1,200,000

There will be a few more late-reporters, but not enough to change the fact that June sales declined by double-digit amounts – both MoM and YoY.

The low rates should keep us going through summer though!

Posted by on Jul 10, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

NSDCC May/June Sales

hot market

A good way to measure the strength of the spring selling season would be to examine home sales that close in May and June.  In spite of medians that have jumped 30% or more in just five years, and a low-end market that has evaporated, sales in May/June of this year were very strong:

NSDCC House Sales, for May/June

Year
# of Sales
Median SP
Median Cost-per-SF
# of Sales Under $800,000
2012
628
$850,000
$317/sf
282
2013
695
$975,000
$372/sf
231
2014
591
$1,000,000
$388/sf
167
2015
623
$1,125,000
$402/sf
138
2016
607
$1,209,000
$419/sf
98

It’s not the low-end that is carrying this market – it is the affluent.  It’s why the market will likely keep going – people have more money than houses!

You can also see how difficult it is to downsize.  Those who are looking to pocket a big windfall – hopefully the entire $500,000 tax-free amount – will recognize how hard it is to stay around the coast.

Of the 98 sold under $800,000, only 31 of them were single-story!

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Posted by on Jul 6, 2016 in Jim's Take on the Market, Market Conditions, North County Coastal, Spring Kick | 0 comments

Preliminary 1H16 Numbers

fireworks

Today is the last day of the first half of 2016!

Here is how this year’s NSDCC market compares to previous years:

First Half
New Listings
Houses Sold
Median Sales Price
2012
2,545
1,477
$815,000
2013
2,790
1,670
$919,950
2014
2,712
1,430
$1,020,000
2015
2,769
1,530
$1,127,500
2016
2,879
1,465
$1,154,000

The final counts for 2016 should end up close to 2,900 listings, and 1,500 sales (numbers above were updated on 7/10/16).

It doesn’t really matter if there are more listings scattered around not selling – they only matter if they dump on price to get ‘er done!

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Posted by on Jun 30, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 2 comments

Existing Home Sales, May 2016

existing home sales

The national cheerleaders get excited about every nugget of data, and are happy to jump to conclusions.  Yunnie is finally tip-toeing around the downsizing trend that we see everywhere around here, but he can’t assume that those sellers are buying too:

“The May gain over April signals that the real estate market has maintained strong momentum all spring,” says realtor.com chief economist Jonathan Smoke. “We are now in this year’s peak home buying months, and this pace of sales should produce the gains we have been forecasting that will make 2016 the best year of home sales in a decade.

The biggest challenge to prospective buyers right now is tight supply, which we have seen for 45 consecutive months. In these conditions, home values have strong support, but potential buyers will continue to face challenges finding a home for sale that meets their needs. That is why we’re seeing the age of inventory drop dramatically while prices have gone up 5 percent over the last year and are now at record nominal levels.”

Lawrence Yun, NAR chief economist, says existing sales continue to hum along, rising in May for the third consecutive month. “This spring’s sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they’ve accumulated in recent years and finally deciding to trade-up or downsize,” he says. “With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now.”

Adds Yun, “Barring further deceleration in job growth that could ultimately temper demand from these repeat buyers, sales have the potential to mostly maintain their current pace through the summer.”

The local NSDCC sales in May built on the momentum from April, and the 2016 three-month total looks very similar to last year (865 vs. 859):

Monthly Detached-Home Sales, Carlsbad to La Jolla

Year
March Sales
April Sales
May Sales
Median SP
Avg $/sf
Median $/sf
2012
238
272
289
$821,000
$380/sf
$311/sf
2013
299
303
362
$943,500
$416/sf
$366/sf
2014
219
258
269
$950,000
$465/sf
$375/sf
2015
294
278
287
$1,125,000
$497/sf
$410/sf
2016
246
299
320
$1,216,250
$500/sf
$419/sf

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Posted by on Jun 23, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check, Spring Kick | 0 comments