$1.3 million gets you a decent Carlsbad tract house east of the I-5 these days!
Category Archive: ‘North County Coastal’
Who is selling?
Over the last few years we’ve seen that most home sellers are the long-time owners, and that trend is continuing.
On the left are the years when the sellers purchased the home they sold between July 26 and August 3rd of this year:
|0 – 2003|
|2004 – 2008|
|2009 – 2011|
|2012 – 2018|
The increasing trend of recent purchasers selling might just be from the additional years in the last category. It was 2012-2015 when this graph began, and now it covers seven years – almost twice as many.
Are those sellers moving up or down? Or cashing out?
The younger boomers:
- Probably moved up a couple of times, not sitting on family homestead.
- Are used to moving more.
- Are more physically capable of moving.
- Have a little less connection to the neighborhood.
- Still have some adventure left in them.
But the younger boomers:
- Are more likely to still be working.
- Are more likely to still have kids at home.
- Are more capable of modifying their home.
- Don’t need assisted living.
With long-time owners providing the bulk of the inventory, we should expect older homes for sale that need fixing, or at least some updating. Yet the current trend is for buyers getting more picky, not less.
|DOM = 0|
Here is some data to help calibrate the slowdown fears.
These NSDCC detached-home inventory counts are from the first week of April, and the last week of July, plus a look at the closed sales for the first seven months of the year:
The 2018 numbers don’t look much worse than in recent years. Once the July sales are finalized, this year’s sales count should be close to 1,700.
This is the time of year when the OPTs are stacking up, which makes it look like garbage time, and easier for buyers to go on vacation instead. It also makes it tougher for the decent buys to stand out.
It may feel like a slowdown, but houses are still selling! By the time every agent reports their July sales, we should be up to at least 275 sales for 2018:
NSDCC July Sales
The pricing increases have settled down, so if sellers don’t mind selling for about what the last guy got, they should be ok. Or if they have something special, there might still be a chance at a frenzy!Link to Brady story
Like the rest of us, former *NSYNC singer Lance Bass just isn’t ready to say — cue the music — “Bye, Bye, Bye” to the “Brady Bunch” house. The boy band legend is reportedly one of at least five bidders vying for a chance to buy the iconic house used to portray the home on the popular 1970s family show.
The house hit the market this month for the first time since 1973, and its owners are hoping to attract a buyer who will preserve the piece of Americana rather than tear it down, a real threat in the Studio City neighborhood where developers routinely tear down and rebuild.
According to Douglas Elliman realtor Ernie Carswell, five bidders got offers in before the midnight deadline Tuesday.
“We’re not going to accept the first big offer from a developer who wants to tear it down,” Carswell told the Los Angeles Times.
Bass hopes he’s the buyer they are looking for.
“I’m obviously obsessed with ‘The Brady Bunch.’ I mean, I grew up watching that show. Reruns!” Bass said on the “Big Brother” show “Off the Block.”
He said he plans to truly make it the Brady Bunch house.
“I’m going to turn it into the TV house, because you know it doesn’t have a second floor and all that kinda stuff, but I’m going to go back to the original, original house,” he said.
Listed at $1,885,000, the two-bedroom home is billed as America’s second most photographed home behind the White House.
Situated in Studio City’s Colfax Meadows, the home boasts a gated motor court and two master suites. According to records, Violet and George McCallister bought the house for $61,000 in 1973 when the “Brady Bunch” was still airing. While the interior never served as a set for the show, the home is like a time capsule, with decor unchanged since the early ’70s. It has a wet bar, a tall stone fireplace and a master bedroom with wall-to-wall hot pink Toile de Jouy wallpaper and matching bedspread.Link to listing
When I first saw this graph, I thought it was the perfect way to sum up the changes in the marketplace since the 2000-2009 era. Back then, people were younger, there were plenty of homes for sale, and prices were relatively affordable, so we always had a very fluid move-up and move-down market.
But to see that average tenure has doubled between 2009 and 2017 is striking.
Have the number of sales changed?
NSDCC Annual Sales of Detached Homes
Given the huge change in price and that more people are staying put than ever, it is shocking to see that sales have been relatively consistent in recent years.
How do you explain it?
It must mean that the demand is fueled by those who don’t have a house yet – first-timers, and those coming from out of town. It explains why they jump at buying when they see a good one – they don’t have one yet. Those who already have a house here aren’t as impressed.
The population has grown 25% in San Diego County since 2000, and 30yr-fixed mortgage rates are about half of what they were then. But for sales to be this strong when repeat movers are so scarce, is remarkable!
P.S. We’ve had 1,620 closings this year, with a median SP = $1,321,500.Link to Attom article
Hat tip to JT who sent in this doomy article about home sales:
Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.
Sales fell 1.1 percent compared with May, but the average change from May to June, going back to 1988, is a 6 percent gain.
The weakness was especially apparent in sales of newly built homes, which were 47 percent below the June average. Part of that is that builders are putting up fewer homes, so there is simply less to sell.
“A portion of last month’s year-over-year sales decline reflects one less business day for deals to be recorded compared with June 2017,” noted Andrew LePage, a CoreLogic analyst. “But affordability and inventory constraints are likely the main culprits in last month’s sales slowdown, which applied to all six of the region’s counties and across most of the major price categories.”
We already saw that NSDCC sales in May and June were both down 20% YoY, but this month we’re hanging tough with last year!
There’s still time to get in before school starts!
How fast are houses selling between La Jolla and Carlsbad this year?
|Number of Days On Market||Number of Houses Sold||Percent of Total|
We may be selling fewer homes, but they are selling faster! Nearly two-thirds are finding a buyer in the first 30 days on the market.
How does this compare with previous years? For the first 6.5 months:
2015: 39% sold between 0-14 days on market (675/1,711).
2016: 39% sold between 0-14 days on market (651/1,662).
2017: 45% sold between 0-14 days on market (770/1,707).
2018: 47% sold between 0-14 days on market (719/1,544).
Sellers should expect immediate action, and take advantage of it! If you don’t want to sell in the first couple of weeks, 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 new meat. Check the history of every new listing!
Let’s examine by zip code where the market might be slowing recently. These are the detached-home sales for the second quarter, plus the current number of pendings in each area:
If the numbers for 2Q18 are remarkably under the first two columns, and the number of pendings are so low that the 3Q18 doesn’t look promising either, then you can figure that the market is soft, and getting softer in that zip code (Cardiff, Carlsbad SW, & Encinitas).
Historically, we have considered our market to be relatively ‘healthy’ when the actives-to-pendings ratio is around 2.0 – but that thought originated when prices were about half of what they are today!
But all in all, we’re in pretty good shape today.
The active inventory hasn’t exploded, and as long as the supply stays in check, the sellers aren’t going to panic. Do the buyers have the willingness and ability to wait it out, with no assurance it will ever get better? Or will the lack of solid evidence keep the ball rolling, albeit at a slower pace?
Here are the stats for the NSDCC detached-home market (La Jolla to Carlsbad):
|Oct 28, 2015|
|Feb 1, 2016|
|Mar 23, 2016|
|June 21, 2016|
|Aug 17, 2016|
|Dec 4, 2016|
|Apr 21, 2017|
|July 16, 2018|
NSDCC Actives Median Price = $2,288,045
NSDCC Pendings Median Price = $1,395,000
Only 10% of the actives are under $1,000,000, and 35% are over $3,000,000 (which are the same ratios as the last reading in April, 2017).
Here are the Actives/Pendings ratios for each area:
These stats are going to bounce around, so there isn’t anything here that gets me overly concerned.
Del Mar has always been a smaller, expensive subset (just eight pendings today), La Jolla is in line with their recent past, and RSF is as good as it’s been in years. Everything else is around the regular 2.0 ratio for a normal market.
The pending counts have been dropping precipitously since June 11:
NSDCC All: -15%
While a lower number of pendings can be due to more closings from the fat part of the selling season, it not like we’re setting any sales records either. The NSDCC June sales are down 20%, year-over-year, just like they were in May.
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