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Category Archive: ‘North County Coastal’

Trump and Local Real Estate

The inauguration is almost here – Trump will be your president on Friday!

How will he affect our local real estate market?

His detractors are aghast over his tweets, but Trump keeps them coming.  In spite of their bombastic nature, I think we are already numb to his tweets, or at least getting used to them being part of the landscape.

At this point, I don’t think the Trump Effect will have much, if any, impact on us – positive or negative.  If rates stay under 5% (today’s 30Y is 4.12%), buyers should shrug it off and keep buying.

I also think sellers and agents are getting smarter about price, which will help tremendously.  As you saw in the previous post, they might screw it up a bit once they hit the market, but eventually buyers and sellers should both be happy with a modest appreciation rate of 2% to 4% this year.

The #1 thing that should keep our market stable is the buyers’ focus on getting the right house for the long-term.  Before the 2007 downturn, buyers thought they could always sell for a gain, and, as a result, any house would work for the short-term.  But after our so-called ‘crisis’, we recognize prices can go down – but it only hurts if you sell.

Sales and prices may bounce around, but with the focus on the long-term as a foundation, our market should keep cooking.

Posted by on Jan 17, 2017 in Forecasts, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 2 comments

NSDCC 2016 Days on Market

Here we have the 3,019 NSDCC houses sold last year, categorized by how many days it took to find their buyer:

Number of Days On Market Number of Houses Sold Percent of Total
0-14 days
1,126
37%
15-30
582
19%
31-45
342
11%
46-60
245
8%
61-75
169
6%
76-90
134
4%
90+
421
14%

Buyers are frustrated and anxious, and they want to buy a house now. Last year, more than half purchased their home in the first month it was on the market.

Sellers should expect immediate action, and take advantage of it! If you don’t want to sell in the first month, then you should wait until you get closer to your preferred exit date.

This is also why the re-freshing of listings is so widespread – buyers want the fresh meat. Check the history of every new listing!

Posted by on Jan 15, 2017 in Jim's Take on the Market, North County Coastal, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 1 comment

NSDCC New Listings in 2017

Can we get a feel for the action yet?  Here’s just a small sample of what’s happening so far – a comparison to previous years of how many new listings have hit the MLS (most are re-freshed):

NSDCC New Listings, First Ten Days

Year
Number of New Listings
Median List Price
Median Sales Price
2013
129
$975,000
$865,000
2014
135
$1,375,000
$1,180,000
2015
138
$1,249,000
$1,100,000
2016
134
$1,666,950
$1,237,000
2017
124
$1,557,500
?

No flood of new listings yet, though there will be some late-reporters that should bring the 2017 total into the 130s. But so far, it looks like more of the same conditions – tight inventory!

The median sales price is what happened eventually to these early listings. Look at the gaps between the MLP and the MSP – you can see how optimistic sellers come out, only to find that buyers didn’t go for it in the new year either.

Posted by on Jan 13, 2017 in Jim's Take on the Market, North County Coastal | 0 comments

San Diego County Annual House Sales

For those looking for a more binary view of market conditions (hot/cold, good/bad), let’s compare San Diego County detached-home sales for 2016 to the previous years.

San Diego County Annual Detached-Home Sales

Year
No. of Sales
Median Sales Price
Avg. Days on Market
2012
25,023
$383,000
76
2013
24,910
$455,000
50
2014
22,101
$495,000
47
2015
23,732
$529,000
42
2016
23,802
$560,000
37

The median sales price has gone up 46%, yet the number of sales were only 5% lower in 2016 than in 2012. Last year, sales were higher than the last two years, and the average days on the market are half what they used to be

Those are fantastic market conditions!

Could the momentum keep going? Will it?

There were good reasons that the real estate market has tanked previously. In 1981, mortgage rates hit 18%, when just four years prior they were in the 8s – that is sticker shock! In the early-1990s, we had the Savings & Loan crisis when they gave away all the foreclosed houses. Of course, in 2006-2008 we had the Mozilo Crisis, where exotic mortgages caused a panic.

It would take a catastrophic event to topple our market now. Sales and prices may bounce around, but the baby-boomer wealth distribution program will juice the market for decades. The final gift of boomers will be to make sure their children all have houses, and even Trump won’t screw that up. If anything, the hysteria will cause more boomers to worry about their kids!

Here are the NSDCC annual sales, broken down into North and South:

La Jolla-Del Mar-SB-RSF-Carmel Valley Detached-Home Sales

Year
No. of Sales
Median Sales Price
Avg. Days on Market
2012
1,364
$1,175,000
93
2013
1,462
$1,350,000
61
2014
1,285
$1,445,000
63
2015
1,301
$1,500,000
63
2016
1,369
$1,520,000
58

Carlsbad-Cardiff-Encinitas Annual Detached-Home Sales

Year
No. of Sales
Median Sales Price
Avg. Days on Market
2012
1,790
$684,042
70
2013
1,756
$770,500
41
2014
1,564
$815,000
41
2015
1,723
$870,000
37
2016
1,639
$919,000
34

What could cause the market to tank, besides a catastrophic event? We’d have to run out of buyers. But if there is any place in the good ol’ USA that people will keep coming, it’s San Diego!

Posted by on Jan 4, 2017 in Boomer Liquidations, Boomers, Jim's Take on the Market, Market Conditions, North County Coastal | 15 comments

Measuring the Start of 2017

Every prognosticator has released their cautious predictions for the year, but how will we know what’s happening in the meantime?

  1. How will buyers know if it’s safe to go back in the water?
  2. How will sellers know if they can pack another 5% on to their price?

There are two ways we can get a sense of the initial enthusiasm, and by the end of January it should become more clear on which way the market is breaking.  Last year, our start was already slightly slower than the previous two years, but close enough that there wasn’t any panic.  Buyers kept buying, and for the most part, they paid what the sellers wanted.

NSDCC Monthly Sales

Year
December
January
February
Totals
2013-14
211
182
180
573
2014-15
250
165
170
585
2015-16
253
168
144
565
2016-17
215

If we close 150 sales in each of the next two months, and hit 515 for our 3-month total, I think we can say our market is surviving. But we can dig deeper to see what will have caused those results.

January New Listings and New Pendings

Year
January New Listings
January New Pendings
2014
307
176
2015
273
163
2016
320
140

Yes, there will be several old listings being ‘re-freshed’ this year – in the first week of last year, about 70% of the new listings had been re-inputted.  But it is like that every year.

Keep your eye on the number of new pendings. If we can get close to last year’s 140, we should be fine, but the wait-and-see trend has been building.

The new listings will play a role – if there is a surge of fresh meat, it could cause rate-sensitive buyers to jump in now if they see something decent. But rates should moderate, keeping buyers picky.  If there aren’t many current owners willing to sell, then we could have fewer pendings but healthy conditions. Let’s compare the two as we go!

Posted by on Jan 3, 2017 in Jim's Take on the Market, Market Buzz, North County Coastal, Sales and Price Check, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 0 comments

How Long Have Sellers Owned 4

Who is selling?

This is the fourth reading – this time I checked the last 112 detached-home sales between La Jolla and Carlsbad.

Here are the categories of when the sellers purchased the home they sold:

Year Purchased
12/12/15
3/19/16
6/18/16
12/13/16
0 – 2003
41%
42%
39%
57%
2004 – 2008
23%
29%
24%
19%
2009 – 2011
15%
11%
13%
6%
2012 – 2016
18%
18%
19%
13%
New Homes
2%
1%
5%
4%

It has been consistent all year – the majority of sellers are long-time owners, which almost always means buyers are getting a project to some degree.  No matter how much work the sellers have done to their house, buyers can plan on spending plenty to bring it into this era, and modify to their tastes.

Buyers should get comfortable with the idea of remodeling just to expand the inventory.  It is helpful if you or your realtor can properly assess the repair costs before offering, and know that it’s rare to get a dollar-for-dollar discount.

More stats:

Other Categories
12/12/15
3/19/16
6/18/16
12/13/16
Number of Sales
125
114
144
112
Avg. $$/sf
$505/sf
$552/sf
$550/sf
$529/sf
Median SP
$1,080,000
$1,129,000
$1,291,500
$1,274,500
Avg DOM
60
38
42
54
Sold in First 10 Days
24%
32%
35%
28%
Lost $$
11
3
7
7
0 DOM
5
8
7
2

Today’s stats are fairly similar to the first reading last December, with the exception being the median sales price up 18% – which isn’t the appreciation rate for every house.  It means more of the higher-priced homes are selling.

Posted by on Dec 13, 2016 in Boomer Liquidations, Boomers, Jim's Take on the Market, North County Coastal | 0 comments

NSDCC November Sales

2016-12-04-13-59-06-2

Here’s the update on last month.  There were two fewer business days in 2014, and one less business day in 2013 and 2015 (same # in 2012).

With both sales AND pricing being this strong, the momentum should carry over to 2017…..and I think we’ll get off to a fast start too.  There has to be some motivated sellers scooting closer to the exits, and buyers who are anxious to lock in a rate and price before they get any worse.

We should be at full speed by March!

NSDCC November Sales

Year
# of Sales
Sales Per B-Day
Median SP
Average $/sf
2012
241
12.68
$885,000
$415/sf
2013
187
10.39
$1,030,000
$474/sf
2014
172
10.12
$1,007,450
$491/sf
2015
193
10.72
$1,187,500
$520/sf
2016
227
11.95
$1,265,000
$544/sf

Posted by on Dec 6, 2016 in Forecasts, Jim's Take on the Market, North County Coastal, Sales and Price Check | 6 comments

NSDCC Actives/Pendings Ratio

Historically we have considered our market to be relatively ‘healthy’ when the actives-to-pendings ratio is around 2.0.  Here are the latest ratios for the detached-home market from La Jolla to Carlsbad:

Reading Date
Active Listings
Pending Listings
Ratio
Oct 28, 2015
970
358
2.71
Feb 1, 2016
788
254
3.10
Mar 23, 2016
900
399
2.26
June 21, 2016
1,052
428
2.46
Aug 17, 2016
1,060
395
2.68
Dec 4, 2016
886
327
2.71

For those wondering how we will get out of the gate in 2017, consider how fast the market picked up last year – by mid-March, we were already in full-tilt boogie mode, reflected in the lowest ratio of the year!

Here are today’s Actives/Pendings for each area.  Except the ultra-highenders, we’re doing as well, or better, than in summertime!

Area
Zip Code
June Ratio
Aug Ratio
Dec Ratio
Actives/Pendings
Cardiff
92007
2.3
3.5
1.1
9/8
Carlsbad NW
92008
2.0
2.3
1.3
39/31
Carlsbad SE
92009
1.6
2.0
1.9
94/50
Carlsbad NE
92010
0.7
0.9
1.3
20/16
Carlsbad SW
92011
1.6
1.5
1.3
31/24
Del Mar
92014
3.2
2.5
4.9
54/11
Encinitas
92024
1.3
1.8
1.8
95/52
La Jolla
92037
4.8
4.4
4.4
177/40
RSF
92067
8.2
6.3
6.3
214/34
Solana Bch
92075
2.9
3.9
2.7
19/7
Carmel Vly
92130
1.5
1.8
1.8
84/47
All Above
All
2.5
2.7
2.7
886/327

Posted by on Dec 4, 2016 in Actives/Pendings, Jim's Take on the Market, North County Coastal | 0 comments

NSDCC 11-Month Report

Mortgage rates calmed down yesterday, retreating back to 4.125%, but with all the hysteria about Trump, things sure seem unsettled.

How will we know if our local market is getting into trouble?

Watch three things:

  1.  Inventory/sales relationship
  2.  High-end market
  3.  Actives/pendings ratio

Apply these to your local micro-market, because results will vary by neighborhood.  I started this blog in September, 2005, when it was becoming obvious on the street that change was afoot.

We had a great lesson in 2006 – the inventory took off, and sales plunged:

La Jolla-to-Carlsbad, Jan – Nov

Year
New Listings
Closed Sales
Median Sales Price
2003
5,002
3,609
$725,000
2004
4,955
3,121
$945,000
2005
5,290
2,808
$1,000,000
2006
5,829
2,388
$985,000
2007
5,198
2,339
$1,000,000
2008
5,030
1,905
$900,000
2009
4,811
1,984
$810,000
2010
5,066
2,256
$830,000
2011
4,994
2,342
$828,414
2012
4,246
2,860
$829,200
2013
4,653
3,007
$950,000
2014
4,541
2,599
$1,022,000
2015
4,715
2,771
$1,098,000
2016
4,807
2,761
$1,170,000

The 2016 inventory has increased, but it’s more in line with the average now – which, excluding 2006, is 4,869 per year. Sales aren’t plunging either, so we’re in good shape, at least for now.

How about the high-end market?

Sales are down slightly in La Jolla this year, compared to 2015 (320 vs. 336), but the Ranch is hopping! There have been 13% more sales in the 92067 this year, compared to 2015, and sales in August-through-November are up 46% year-over-year!

graph

I’ll come back to the Actives/Pendings ratio, but at least we have guideposts that look relatively health today!

Posted by on Dec 3, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

San Diego = Best in SoCal

oh

How long can the hot market continue? It’s up to the sellers.  If they are willing to sell for what the market will bear, we’ll keep rolling because there are lots of people who want to buy a house – it’s just a matter of price.

If the auction format gets more popular, it would solve everything.

The price surge has locked many first time buyers out of the market. But it has been a boon to owners, many of whom regained equity after being underwater on their mortgages following the Great Recession crash.

The gains have been seen across Southern California, though inland areas remain further behind. In October, the median price — the point where half of homes sold for more and half for less — rose in all six counties compared to a year earlier, CoreLogic said.

In Los Angeles County, the median jumped 7.4% to $525,000; in Orange, 9% to $655,000; in Ventura, 7% to $535,000; in San Bernardino, 9.6% to $285,000; in Riverside, 8.1% to $335,000; and in San Diego,11.1% to $507,500.

The sustained price gains have real estate agents, buyers and sellers wondering how long the hot market can continue.

Most economists say price increases should be smaller next year as families struggle to make larger offers on homes. Wage growth simply isn’t keeping up with the rising cost of housing, they say.

Read full article here:

http://www.latimes.com/business/la-fi-case-shiller-home-prices-20161129-story.html

Posted by on Dec 2, 2016 in How Hot?, Jim's Take on the Market, North County Coastal | 0 comments