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Category Archive: ‘North County Coastal’

Home Sales, Y-T-D

N.A.R. home-sales forecasts are a moving target. In October they guessed 6 million sales for 2017, and in December they said 5.5 million:

LINK

Single-family existing home sales are set to see their best year since 2006, driven by robust job gains and improving household confidence, according to the forecast from the National Association of Realtors.

While existing home sales are increasing, low levels of supply and rising affordability concerns are creating headwinds for sales and threatening the low homeownership rate.

The first quarter came in with the best sales pace for existing homes in a decade; NAR Chief Economist Lawrence Yun expects that pace to continue, finishing off 2017 with 5.62 million sales, the best pace since 2006. This would represent an increase of 3.5% from 2016.

And home sales aren’t the only thing predicted to rise. NAR also forecasts an increase of 5% in existing home prices in 2017.

However, starter home shortage continue to plague the housing market and discourage would-be first time homebuyers.

“We have been under the 50-year average of single-family housing starts for 10 years now,” Yun said. “Limited lots, labor shortages, tight construction lending and higher lumber costs are impeding the building industry’s ability to produce more single-family homes.”

“There’s little doubt first-time buyer participation would improve and the homeownership rate would rise if there was simply more inventory,” he said.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The N.A.R. only talks about the annualized sales pace, which is murky. Let’s look at how the actual year-to-date sales compare with previous years:

Detached-home Sales Between Jan 1st and May 15th:

Year
# of SD County Sales
Median SP
# of NSDCC Sales
Median SP
2013
8,980
$425,000
1,136
$891,225
2014
7,699
$485,000
957
$1,009,020
2015
8,304
$510,000
1,066
$1,100,000
2016
7,965
$546,000
984
$1,140,000
2017
7,967
$580,000
1,000
$1,215,000

The 2017 NSDCC sales are tracking 1.6% ahead of last year, and if mortgage rates can hold around the current 4%, we should carry on. It feels like we have a maturing market though, and a general malaise could drift into the equation towards the end of the summer season.

Posted by on May 23, 2017 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 2 comments

NSDCC Months of Inventory

Market conditions are favorable throughout the NSDCC.  Here are stats on the individual areas:

Area
Zip Code
ACT
PEND
SOLDS – April
Months of Inv. (A/S)
Cardiff
92007
19
11
9
2.1
Carlsbad NW
92008
38
37
18
2.1
Carlsbad SE
92009
75
78
52
1.4
Carlsbad NE
92010
15
33
11
1.4
Carlsbad SW
92011
27
25
26
1.0
Del Mar
92014
69
19
15
4.6
Encinitas
92024
95
56
40
2.4
La Jolla
92037
180
44
29
6.2
RSF
67+91
246
49
27
9.1
Solana Bch
92075
24
16
12
2.0
Carmel Vly
92130
85
82
30
2.8
All Above
All
873
450
269
3.25

It used to be that 6 months of inventory was considered normal. Can we say the new normal is more like 3.0?  Areas that are performing very well are 2.0?  Those on fire are 1.0?

Posted by on May 16, 2017 in Frenzy, Jim's Take on the Market, Market Conditions, North County Coastal | 0 comments

NSDCC Inventory, First Third of Year

So our NSDCC market is cooking….is the amount of inventory to blame?

One-third of 2017 is complete – let’s compare it to recent years:

New Listings Between January-April

Year
New Listings, Jan – Apr
New Listings in April only
2013
1,822
534
2014
1,746
511
2015
1,747
471
2016
1,906
512
2017
1,695
456

Prices are at all-time highs, and FEWER people want to sell??

How can you explain it?  What is different now?

Is it His Orangeness?  The change in president is a notable difference between 2017 and the previous years, but there hasn’t been any specific orders directed at the real estate business, and mortgage rates have stayed about the same.  He could be causing more people to hunker down, but you would think that people would be just as likely to flee!

Potential home sellers know by now what’s in store with Trump.  Not much, if anything, will get done that impacts the real estate selling business.

So what is it?  Why aren’t more people selling at these prices?

It’s because they have nowhere to go that is any better.  The baby-boomers who own most of the coastal real estate have successfully bought one or more personal residences to get to this one, and it will do – it is their trophy property.  Selling a rental property via a 1031 exchange just to avoid taxation isn’t worth the hassle – and how do you do any better than NSDCC?

There are approximately 300,000 people in our market, hopefully we will have at least 1,600 houses to sell during the first four months of every year.

It is the 10% to 20% on the fringe that make the difference.

Some years there are a few extra people who decide to list their house. In 2016 we had 7% more houses listed than the 5-year average. A surge like that can result in more sales, or cause buyers to wait-and-see – it depends on price.

Baby boomers are young enough that they can still manage to live in their long-time residences, but this really should be the peak of the low-inventory era.  Don’t we have to see more boomer-owned properties coming to market as they shuffle off to the retirement home, or the Big McMansion in the sky?

Keep an eye on the fringe – the extra 10% to 20% surges in inventory is where we will see a notable change first!  Until then, expect more of the same!

Posted by on May 8, 2017 in Inventory, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 3 comments

NSDCC April Sales

An update on last month’s sales and pricing:

April
Number of Sales
Avg $$/SF
Median SP
Avg DOM
Median DOM
2013
303
$420/sf
$955,000
42
16
2014
258
$456/sf
$1,052,500
50
26
2015
278
$473/sf
$1,090,000
47
20
2016
299
$521/sf
$1,129,197
40
19
2017
265
$541/sf
$1,335,035
42
15

The sales count was 225 when we checked on Friday, and we’ll have some more stragglers over the next couple of weeks. There was one less business day last month verses April 2016, so we weren’t too far off.

There were 24 houses that sold for more than $3,000,000, and two that closed over $10,000,000!

Posted by on May 3, 2017 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 1 comment

NSDCC April Sales – Preliminary

Today is the last business day of April – how are sales shaping up?

April
Number of Sales
Avg $$/SF
Median SP
Avg DOM
Median DOM
2013
303
$420/sf
$955,000
42
16
2014
258
$456/sf
$1,052,500
50
26
2015
278
$473/sf
$1,090,000
47
20
2016
299
$521/sf
$1,129,197
40
19
2017
225
$539/sf
$1,282,131
42
14

We should have another 10% added to this month’s sales count by the time we are done, but it will be well under last year’s count, which should get the talking heads excited. There was one less business day this month verses April 2016, and last April was a stellar month for sales.

This month’s increase in pricing was strong, and the median days-on-market was hotter than ever.  But if you are like me, you are seeing most of the new listings today being priced with extra mustard, and I think we’re going to see sales struggle from here on out.

Posted by on Apr 28, 2017 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 1 comment

Spring Fizz?

Reader Tom had this observation yesterday:

I think the market turned this week. I’m seeing more inventory where I look. I’m seeing more price reductions. I’m seeing houses come on decently priced that aren’t flying off market. I think we will look back in 2 years and see this was the peak month. Downhill from here.

We’re coming off an active spring selling season so far:

NSDCC Detached-Home Sales between March 1 – April 15

Year
# of Sales
Median SP
Avg. $/sf
2012
345
$813,500
$367/sf
2013
438
$873,250
$406/sf
2014
351
$1,030,000
$494/sf
2015
419
$1,100,000
$496/sf
2016
365
$1,142,331
$525/sf
2016
361
$1,140,000
$499/sf

We might be seeing the real estate tides going out, and the accurate pricing becoming more obvious, which happens this time of year.  The over-priced listings start stacking up once we get this far into the selling season (May starts next Monday!).

We also noted last year that the peak time to sell is right now, and that by May 15th the new pendings start to drift off.  Could the selling season be closing out earlier this year?

The rest of the selling season is going to be case-by-case.  There is a smaller beach house in Oceanside today listed in the low-$700,000s that has so much action that the bids are pushing towards $800,000!

What can sellers do?

  1.  Don’t use Active Listings as Comps – All the active listings tell you are the list prices that aren’t working.
  2.  Don’t Rely on Sold Comps as Absolute Proof of your Home’s Value – They are likely indicators, but those buyers might have been crazy, or got suckered into a hot bidding war.  Question the cash sales too; buyers are throwing around money like water.
  3.  Don’t Use Range Pricing – Give buyers a clear number to shoot at. My listing in NE Carlsbad suffered an unfortunate occurrence when the house across the street listed on a too-large range of $725,000 – $800,000.  The owner/agent got four offers over the first weekend, which did the same thing it does to all sellers – it makes them want the top of the range.  I told her she should ditch the low end, and just go with the $800,000.  She didn’t, and instead cancelled the listing three weeks later. In the meantime, I’m trying to sell the same model with view for $849,000, which would have looked reasonable if hers was $800,000 with slope instead of view – we both could have sold!
  4.  Lower Your Price – If you’ve been on the market for weeks, buyers think something is wrong with your price.  Buyers are on to it – ‘how long have you been on the market’ is the most heard question at open houses.
  5.  Keep Improving Your Home – If you don’t want to lower the price, you can keep improving your home along the way to justify the price.

Daytrip left this comment:

I think price peaks and drops will be like playing whack-a-mole this season. Take out the noise, and it’ll still be heading up. Quality properties will get good prices.

I agree, but once a house is for sale, it is subject to market forces.  Sometimes you just hit a dry spot, and adjusting is more effective than waiting!

Posted by on Apr 24, 2017 in Jim's Take on the Market, North County Coastal, Spring Kick | 2 comments

NSDCC Actives/Pendings

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!

Here are the stats for the NSDCC detached-home market (La Jolla to Carlsbad):

Reading Date
Actives
Pendings
A+P
A/P
Oct 28, 2015
970
358
1,328
2.71
Feb 1, 2016
788
254
1,042
3.10
Mar 23, 2016
900
399
1,299
2.26
June 21, 2016
1,052
428
1,480
2.46
Aug 17, 2016
1,060
395
1,455
2.68
Dec 4, 2016
886
327
1,213
2.71
Apr 21, 2017
842
427
1,269
1.97

Considering that we have record-high pricing in most areas, it is phenomenal to see so many pendings – and so few actives!

Actives Median Price = $2,350,000

Pendings Median Price = $1,299,000

Only 10% of the actives are under $1,000,000, and 35% are over $3,000,000!

Here are the Actives/Pendings ratios for each area.  If you remove La Jolla and RSF, the A/P = 432/336, or 1.29 to 1!

Area
Zip Code
June
Aug
Dec
Act/Pend Today
Cardiff
92007
2.3
3.5
1.1
15/15 = 1.0
Carlsbad NW
92008
2.0
2.3
1.3
40/34 = 1.2
Carlsbad SE
92009
1.6
2.0
1.9
73/74 = 1.0
Carlsbad NE
92010
0.7
0.9
1.3
23/25 = 0.9
Carlsbad SW
92011
1.6
1.5
1.3
26/24 = 1.1
Del Mar
92014
3.2
2.5
4.9
63/19 = 3.3
Encinitas
92024
1.3
1.8
1.8
87/55 = 1.6
La Jolla
92037
4.8
4.4
4.4
172/46 = 3.7
RSF
92067
8.2
6.3
6.3
207/40 = 5.2
Solana Bch
92075
2.9
3.9
2.7
19/13 = 1.5
Carmel Vly
92130
1.5
1.8
1.8
86/77 = 1.1
All Above
All
2.5
2.7
2.7
842/427 = 2.0

WOW!

Posted by on Apr 21, 2017 in Actives/Pendings, Jim's Take on the Market, North County Coastal | 0 comments

NSDCC Spring Kick Report

The overall environment can be sized up by comparing how many houses have sold, compared to the number of new listings hitting the market.

A surge of new listings can set buyers back on their heels. We could make that case about what happened last spring, when we had 100 more NSDCC listings hit early, and sales dropped a bit from the previous year:

NSDCC Action Between Jan 1 and April 10th

Year
# of Closed Sales
# of New Listings
CS/NL
% of Sales Over $1M
2013
765
1,481
52%
40%
2014
678
1,408
48%
51%
2015
730
1,445
51%
58%
2016
639
1,550
41%
58%
2017
648
1,368
47%
61%

The 41% from last year looks like the anomaly now though, and this year looks stronger than ever, with sales maintaining last year’s pace in spite of almost 200 fewer listings! All while the lower end has been disappearing – this year we have 61% of our sales over $1,000,000!

Posted by on Apr 13, 2017 in Jim's Take on the Market, North County Coastal, Sales and Price Check, Spring Kick | 0 comments

Freeze-Dried Frenzy

The market is sizzling, and it could kick up to another level if there were just more homes to sell! Here is a comparison of today’s inventory to previous years (the lower-end is selling fast!):

NSDCC Active Inventory – Second Week of April

Year
$0-$800K
$800K-$1400K
$1400-$2400K
$2400K+
Total
2014
97
233
233
349
912
2015
65
220
218
346
849
2016
37
235
260
447
979
2017
28
168
235
386
817

NSDCC Pendings Today

PEND
$0-$800K
$800K-$1.4M
$1.4M-$2.4M
$2.4M+
Total
4/10/17
38
202
126
69
427

Without more homes to sell, it’s like a freeze-dried frenzy on the lower end – very dry but it’ll keep you alive!

From cnbc.com:

Anyone eager to buy a home this spring probably has reasons to feel good. The job market is solid. Average pay is rising. And mortgage rates, even after edging up of late, are still near historic lows.

And then there’s the bad news: Just try to find a house.

The national supply of homes for sale hasn’t been this thin in nearly 20 years. And over the past year, the steepest drop in supply has occurred among homes that are typically most affordable for first-time buyers and in markets where prices have risen sharply.

In markets like San Diego, Boston and Seattle, competition for a dwindling supply has escalated along with pressure to offer more money and accept less favorable terms.

“Sellers will have the edge again this year,” said Ralph McLaughlin, chief economist for Trulia, a real estate data provider. “Homebuyers are really going to be scraping the bottom of the barrel as far as housing choice is concerned.”

The intensity of the competition this spring has surprised even sellers like Kathleen Mulcahy, a 37-year-old product manager in Seattle.

Within a week of listing her one-bedroom, one-bath condo, Mulcahy received 21 offers – all above her asking price of $398,000. Most of the offers came with built-in triggers to automatically rise in case a rival bidder sweetened a bid. In the end, she accepted an offer of $500,000 – all cash.

“A lot more than I expected,” Mulcahy said.

Yet the changed landscape cuts both ways: Facing higher prices and competition herself, Mulcahy has decided for now to put off buying another home.

“There’s very little available, and it’s just too expensive right now, so I’m going to wait,” she said. “I’ll probably rent for two or three years.”

About 1.75 million homes were for sale nationally at the end of February, according to the National Association of Realtors. That’s down 6.4 percent from a year earlier and only slightly up from January, when listings reached their lowest point since the association began tracking them in 1999. All told, the supply of homes for sale has fallen on an annual basis for the past 21 months.

Read full article here:

http://www.cnbc.com/2017/04/10/mission-nearly-impossible-this-spring-finding-a-home-to-buy.html

Posted by on Apr 10, 2017 in Actives/Pendings, Frenzy, Inventory, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal | 0 comments

NSDCC Sales, March 2017

We hear about the ‘tight inventory’ across the country, but the perception is affected by how fast homes are selling – there aren’t many houses just sitting around not selling, which gives the appearance of ‘tight’.

Let’s measure it correctly by comparing the total number of houses listed for sale between La Jolla and Carlsbad:

NSDCC Total 1st Quarter Listings

1st Qtr
Total # of New Listings
Median List Price
2013
1,288
$1,175,000
2014
1,235
$1,289,950
2015
1,276
$1,302,950
2016
1,394
$1,490,000
2017
1,223
$1,495,000

The number of NSDCC houses listed for sale hasn’t dropped significantly from previous 1Qs – the 1,223 is only 4% below the average of the last five years. Does that mean the number of sales should be comparable to previous years?

Here is the first look at last month’s NSDCC detached-home sales:

NSDCC March Sales

March
Total # of Sales
Median SP
Avg. $$/sf
Avg. DOM
# Sold <800K
2013
299
$840,000
$404/sf
49
129
2014
219
$1,040,000
$518/sf
51
62
2015
294
$1,137,500
$502/sf
46
73
2016
245
$1,145,000
$524/sf
42
57
2017
229
$1,110,000
$481/sf
42
41

Sales last month were 11% below the March average of the last five years.  Double-digit changes should get our attention!  But it is very understandable, once we look deeper.

The lower-end is where the discrepancy is – the number of houses sold under $800,000 last month was 44% below the 5-year average.

The lower-end market is disappearing.

We’re already a higher-end market, and going higher.  As a result, sales could taper off as we find an equilibrium.

It’s not like there aren’t houses for sale. They’re just expensive!

Today we have 822 on the market between La Jolla and Carlsbad – with a median LP of $2,295,000!  Only 97 of those (12%) are listed under $1,000,000!

One other note. The $524/sf average last March included this house that closed for a whopping $5,869/sf.  Take that out, and the March, 2016 average is $502/sf, the same as the previous year.

Posted by on Apr 4, 2017 in Jim's Take on the Market, Market Conditions, North County Coastal, Sales and Price Check | 0 comments