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An Insider's Guide to North San Diego County's Coastal Real Estate
Jim Klinge, broker-associate
858-997-3801
klingerealty@gmail.com
Compass
617 Saxony Place, Suite 101
Encinitas, CA 92024
Klinge Realty
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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Jim Klinge
Cell/Text: (858) 997-3801
klingerealty@gmail.com
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011


Category Archive: ‘North County Coastal’

Real Estate Cycle

www.sacramentoappraisalblog.com

Ryan posted the history of real estate cycles in Sacramento County, so here are the same years for North San Diego County’s coastal region for comparison.  Human nature tends to flow in the same direction everywhere, and as a result, our history looks a little like his:

Year
Number of Sales
Median Sales Price, Annual
Change
1999
3,236
$475,000
+8%
2000
3,285
$555,000
+17%
2001
2,926
$570,000
+3%
2002
3,717
$630,000
+11%
2003
3,932
$732,500
+16%
2004
3,363
$948,000
+29%
2005
3,014
$1,000,000
+5%
2006
2,626
$985,000
-2%
2007
2,479
$1,000,000
+2%
2008
2,037
$890,000
-11%
2009
2,223
$817,000
-8%
2010
2,461
$830,000
+2%
2011
2,562
$825,000
-1%
2012
3,154
$830,000
+1%
2013
3,218
$952,250
+15%
2014
2,850
$1,025,000
+8%
2015
3,079
$1,090,000
+6%
2016
3,103
$1,160,000
+6%
2017
3,084
$1,225,000
+6%
2018
2,797
$1,325,000
+8%

At the time it seemed like sky was caving in, but looking back we only had two bad years (2008 and 2009) in the last twenty. There was some scuffling around as we found our way in 2006-2007, and 2010-2012, but given that our market had been injected with the most exotic financing ever known to man, and then tanked by foreclosures and short sales, I think we did pretty good to survive it as well as we did.

Now what?

With 90% of the NSDCC active listings priced over $1M, all we need is wealthy people to keep coming here to buy their forever home.  We’re still cheaper than the LA/OC and Bay Area, so we look attractive to downsizers.

Our pricing may bounce around, but without brainless bank clerks dumping properties for any price, who else is going to cause a collapse?  We could run low on the number of buyers – and if we did, all it would do is cause a protracted descent; re: soft landing over years.

Boomer liquidations?

Here’s a conversation I had yesterday with a guy who is 80+ years old and who has lived in his house since the 1960s:

Him: Convince me why I should sell my house.

Me: How are you getting around?

Him: I ride my bike to the store.

Me: Do you need the money?

Him: No.

Me: Have you ever dreamed about buying a house on the lake and fishing the rest of your life?

Him: No.

Me: Are you married?

Him: No.

Me: Did you know that if you did sell, you’d have to pay six-figures in taxes?  How would that make you feel?

Him: What?  I only paid $19,500! I’d never pay that much in taxes!

Me: What happens upon your demise?

Him: My daughter will inherit – she grew up here, and will likely move back in.  But I told her if she doesn’t move in, it’s ok with me to sell it.

Me: Do you have a family trust?

Him: Yes.

Me: Did you know that if she sells the house, she will pay no tax?

Him: You’re kidding? If I sell it, I have to pay the tax man six-figures, but if she sells it, she pays nothing?  Jim, I think we have the answer!

There will be occasional sales where sellers hire bad agents and get taken advantage of, but there won’t be an avalanche of desperate sellers dumping for any price.  It would take a tsunami, earthquake, or terrorist event at the border to cause a drastic shift in housing – which could happen!

Here’s the latest photo of the nuclear waste being stored right on the surf at San Onofre.  All we need is one crack in a storage cask…..

Without a catastrophic event, what’s the worst we can expect?

Maybe 5% drop in pricing in the short-term?

Any more than that, and sellers will just wait it out.

Posted by on Jan 11, 2019 in Boomer Liquidations, Boomers, Jim's Take on the Market, North County Coastal, Sales and Price Check, Slowdown | 6 comments

NSDCC December Sales

December sales were down 14% year-over-year, and 19% below the average of the last five years:

Year
# of Sales
Median SP
Avg. Cost-per-sf
Avg. DOM
S/BD*
2013
211
$1,075,000
$485/sf
60
10.0
2014
250
$1,052,075
$482/sf
61
11.4
2015
258
$1,094,500
$477/sf
56
11.7
2016
240
$1,150,000
$502/sf
55
11.4
2017
222
$1,212,500
$562/sf
47
11.1
2018
192
$1,414,000
$548/sf
50
9.6

*S/BD = Sales per business day, which had the same 14% YoY decline.

This far into January means there won’t be many more late-reporters to come.

At least pricing……oh never mind. There’s nothing price can’t fix.

Posted by on Jan 9, 2019 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 4 comments

Padres Contest

Big Papi’s last game in SD

Would you like some guidance on what to expect in the Spring Selling Season?

Let’s monitor how many new NSDCC listings are hitting the market!

If the negative media hype is starting to worry sellers, they will hurry up and list their home early.  If we see a surge of new listings in the first two months of the year, it means a buyers’ market is forming.

If we have about the same or fewer listings in early 2019, then sellers will just shrug off any concerns and wait their turn.

Here are the counts of listings inputted onto the MLS in January and February from the last few years:

NSDCC New Listings, Jan & Feb

Year
Jan+Feb Listings
Median List Price
Median DOM
2012
794
$954,500
88
2013
785
$1,130,000
37
2014
802
$1,295,000
42
2015
821
$1,345,000
37
2016
917
$1,489,900
46
2017
787
$1,499,876
38
2018
782
$1,599,000
35

The average is 813 listings, and with the last two years both being lower, it would take a significant YoY increase to worry most participants. But at least we’ll know first!

Put your guess in the comment section of how many new listings we’ll have in January and February, and on March 15th we’ll see who is closest.

The winner will get four tickets to a Padres game! The photos here were taken from the seats, and I’ll have about ten dates available.

Larry Baer, CEO of the SF Giants

Posted by on Jan 2, 2019 in Contests, Inventory, Jim's Take on the Market, Market Conditions, North County Coastal | 27 comments

2019 Forecasts

We are wrapping up another year, and have eyes on 2019!

Here are guesses from the more prominent real estate prognosticators:

  • National Association of Realtors: Sales +1%, prices +3.1%.
  • Realtor.com: Sales -2%, Median SP +2.2%.
  • California Association of Realtors: Sales -3.3%, CA Median SP +3.1%.
  • KW: Sales -2%

The opinions are fairly universal throughout the industry.  Sales might be down a little, and prices up a little.

But I’m sticking with -20% for NSDCC sales, which by comparison, sounds catastrophic.  We only had a 10% decline this year and everyone was reaching for the panic button, so if it happens, it will feel uncomfortable for most. But the inventory will be there, it just means more of it won’t be selling.

Here is the data for detached-homes between La Jolla and Carlsbad:

Year
# of Listings
Median LP
# of Sales
Median SP
MSP YoY %chg
2012
4,416
$979,990
3,154
$830,000
+1%
2013
4,818
$1,168,445
3,218
$952,250
+15%
2014
4,692
$1,247,923
2,850
$1,025,000
+8%
2015
5,068
$1,295,000
3,079
$1,090,000
+6%
2016
5,171
$1,395,000
3,103
$1,160,000
+6%
2017
4,630
$1,450,000
3,084
$1,225,000
+6%
2018
4,802
$1,498,500
2,760
$1,325,000
+8%

Additional inventory is encouraged….up to a point.

In 2006, the inventory ballooned to 6,046 listings, which was 9% higher than the previous year’s count. The surge in new listings set buyers back on the their heels, and sales plunged 13% in 2006 compared to 2005.

The 2018 counts above are today’s numbers, so a few more will be added.  Using these numbers, listings are up 3% YoY, and sales are down 11%, YoY.

The median sales price is +8% YoY, but that’s for the whole year.  We saw the October Case-Shiller Index be up only 3% YoY, so pricing is decelerating.

The stock market crashed 635 points on Monday, only to go up 1,086 yesterday – and yet the 30-year jumbo rate hasn’t budged (still at 4.41%).

Pricing might drop a little, but the sales go first, so I think we won’t see much change in the NSDCC median sales price in 2019.

Posted by on Dec 27, 2018 in Forecasts, Jim's Take on the Market, North County Coastal | 2 comments

Coma-Meter

Has there been much action this month?

Carmel Valley is hopping year-round, and SE Carlsbad, which has about 10% fewer homes than the CV, is active too.

Del Mar and Rancho Santa Fe?  Not so much.

Here are the number of houses currently for sale, and those that have gone pending this month, by zip code:

Current Active Listings and Pendings Since Dec. 1st:

Area
Zip Code
Actives Today
Pendings Since Dec 1st
Cardiff
92007
14
2
Carlsbad NW
92008
49
12
Carlsbad SE
92009
64
16
Carlsbad NE
92010
21
5
Carlsbad SW
92011
47
5
Del Mar
92014
79
3
Encinitas
92024
73
12
La Jolla
92037
192
12
RSF
92067+91
176
6
Solana Beach
92075
24
3
Carmel Valley
92130
71
20
All Above
All
810
96

January is going to be a quiet month for closings!

Posted by on Dec 19, 2018 in Jim's Take on the Market, North County Coastal | 2 comments

Fed Hike?

A pause in the Fed hikes was looking good.

First, the WSJ posted an editorial on Sunday – a snippet:

If you think your job is tough, consider Federal Reserve Chairman Jerome Powell. He’s signaled for months that the Fed will raise interest rates again this week, but economic and financial signals suggest he should pause. Meanwhile, Donald J. Trump is beating him up almost daily not to raise rates.

What to do? The right answer is to ignore the politics, inside and outside the Fed, and follow the signals that suggest a prudent pause in raising rates at this week’s Open Market Committee (FOMC) meeting. Get the monetary policy that best serves the economy, and the politics will work itself out. Get the policy wrong, and Mr. Trump will be the least of Mr. Powell’s political worries.

Josh agreed in his tweet above, and it looked like we had a shot!

Trump could have just let it go…..but noooo, he had to tweet one more time:

In case the Fed is looking around for evidence, consider our recent home sales:

End-of-Year Detached-Home Sales and Pricing

Category
2017
2018
% change
NSDCC # of Sales, 10/1 – 12/15
600
537
-11%
NSDCC Median SP, 10/1 – 12/15
$1,200,000
$1,350,000
+13%
SD County # of Sales, 10/1 – 12/15
4,637
3,886
-16%
SD County Median SP, 10/1 – 12/15
$615,000
$640,000
+4%

The Fed is going to be tempted to make their rate decision based on politics, and show Trump who the boss is. Median pricing is like politics – it makes you want to make decisions based on less-relevant data.

Keep your eyes on sales – they are the precursor of what’s ahead.

Even if the Fed skips this rate hike, we are still going to see sales plummet next year.  They could help make it a softer plummet though!

Posted by on Dec 18, 2018 in Forecasts, Interest Rates/Loan Limits, Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

2019 Market Outlook

Above is the summary of yesterday’s housing and economic outlook sponsored by First American Title.  Click here for the full report:

SoCal Outlook Dec 2018

Let’s mention those who will be making the market in 2019:

  1. Those with the least amount of experience and education.
  2. Those who don’t own a home here yet.

People in these two categories aren’t hampered by the over-analysis that comes with owning a home here currently.  Those who already own a home in San Diego have paid less, and have a lower mortgage rate.  We are trying to make sense of giving that up, and paying more!

It’s a burden that thwarts most attempts to move by current homeowners.

But those who don’t study it too hard, or don’t already own a home will forge ahead.  They have already decided that buying a home make sense in this environment, and have their own personal consequences if they don’t buy.  They aren’t going to be talked out of it either.

Figure out how many people are in that group, and you can predict the future.

Here are the categories:

  • First-timers
  • Down-sizers
  • Up-sizers with strong needs
  • Incomers from out-of-county/state/country
  • Affluent people

Everyone else will enjoy their comfortable spot on the fence and wait-and-see what these folks will do.  Let’s acknowledge though that people in these five groups aren’t tethered with the same restraints as the rest of us – it’s just a matter of how many people are in these groups.

How many?  My guess is 80% of those who bought in 2018.

Posted by on Dec 13, 2018 in Forecasts, Jim's Take on the Market, Market Conditions, North County Coastal | 5 comments

NSDCC November Sales

The slowdown started in July, so the November sales count is surely going to reflect the impact – and it does. Sales were down 11% year-over-year:

Year
# of Sales
Median SP
Avg. Cost-per-sf
Avg. DOM
Avg. SF
S/BD*
2013
187
$1,030,000
$474/sf
58
2,960sf
10.4
2014
173
$985,000
$489/sf
63
3,071sf
10.2
2015
196
$1,173,750
$518/sf
54
3,067sf
10.9
2016
244
$1,235,908
$531/sf
51
3,046sf
12.8
2017
218
$1,200,305
$522/sf
46
3,093sf
11.5
2018
194
$1,310,000
$568/sf
55
3,067sf
10.2

*S/BD = Sales per business day, which had the same -11% YoY decline.

Let’s put away the panic button for now.

Posted by on Dec 6, 2018 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments