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Category Archive: ‘North County Coastal’

Why Sell Your House Now

Dec2014

We need more homes to sell! From the DQ:

http://www.dqnews.com/Articles/2015/News/California/Southern-CA/RRSCA150114.aspx

“One month doesn’t make a trend, but December’s uptick in home sales might indicate renewed interest in housing thanks to lower mortgage rates and job growth in recent months,” said Andrew LePage, data analyst for CoreLogic DataQuick. “The gain came despite a continued decline in the share of homes sold to investors and cash buyers.

If demand continues to build, we’ll need more supply to keep up with it. One of the big questions hanging over the housing market is whether higher demand and home values will lead to a lot more people listing their homes for sale, as well as more new-home construction, which remains well below average.”

The ultra-low mortgage rates have gotten every buyer’s attention, and the sales are starting to reflect it – just like at the end of 2012.  If the December sales are the precursor, then we are at least looking at a frenzy-lite experience over the next few months:

NSDCC December Sales
# of Dec. Sales
Median SP
Median DOM
Avg $/sf
2010
205
$835,000
69
$388/sf
2011
220
$800,000
62
$351/sf
2012
294
$849,500
44
$402/sf
2013
211
$1,075,000
40
$485/sf
2014
243
$1,075,000
41
$486/sf

Around the NSDCC, you can sell your home for more than it has ever been worth.  But is that enough to cause people to sell?  For most people, no. We like living here, and have no place better to go.

We don’t need everyone to move.  All we need is about 10% more listings than last year, and we’ll hit full frenzy. The 2003-2004 era was the craziest frenzy of all-time, and it’s because we had more houses to sell:

Year
Number of New Listings, First Half (Jan-Jun)
2003
5,178
2004
5,162
2013
4,817
2014
4,681

In a region of 300,000 people, all we need is about 80 more houses per month to sell.  We need a few potential sellers to change their mind about selling later, and sell now instead.

If you know you are going to be selling in a few years anyway, but these ideal conditions look too good to pass up, here’s how you can justify moving now:

1.  Move before you retire.  If you were thinking about downsizing and wanted to stay local, then either buy a condo close to home, or move to the outskirts where you can still buy a home for less than $500,000 – and commute to work for a year or two.  The low-end market is much hotter, and prices moving up quicker.

2.  Sell and rent. If you know you are going to be leaving town shortly, sell when the market is red hot, and rent a beach hut for a year or two.  Yes, rents are outrageous – but your home’s sales price will be too!

3. Retire early.  You are making more money in the stock market than you are at that stinking job you can barely tolerate.  Cash out while you can!

4.  Sell and move when you are healthy.  If you’ve been in the same home for more than 10 years, you have a lot of stuff to sort through – physically, mentally, and emotionally.  It is much easier when you have your health.

5.  Move up when rates are low.  Obviously, if you are moving up and financing the next purchase, these low rates are advantageous.

6.  Sell before rates go up.  Remember that in June 2013, that mortgage rates moved back into the mid-4% range on a rumor that the Fed was going to tighten – which they never did.  It won’t take much to pull this punch bowl.

Historically, the market has been a ten-year cycle, and the SD trough this time was April 2009.  It got dragged out longer in the 2005-2007 era by Angelo’s nutty no-doc financing, and today’s low rates might extend the party a while longer.  But it isn’t going to last forever, and mortgage rates will go up before the Fed does anything.

Once mortgage rates go up, buyers will expect lower prices, and we saw prices stall out much of last year.  But do you want to sell for less?  Not until you test the market for a year or two, and by then, buyers will be in control.

Contact me today for a free consultation!  jim@jimklinge.com

Posted by on Jan 16, 2015 in Frenzy, Jim's Take on the Market, North County Coastal, Sales and Price Check, Thinking of Selling?, Why You Should List With Jim | 4 comments

NSDCC Annual Sales

How did 2014 stack up to previous years?

Year
No. of Sales
Median SP
Median DOM
2002
3,717
$630,000
38
2003
3,932
$732,500
34
2004
3,363
$948,000
27
2005
3,014
$1,000,000
40
2006
2,626
$985,000
51
2007
2,479
$1,000,000
49
2008
2,037
$890,000
54
2009
2,223
$817,000
52
2010
2,461
$830,000
46
2011
2,562
$825,000
57
2012
3,154
$830,000
46
2013
3,218
$952,250
25
2014
2,838
$1,025,000
28

A.  Look at the similarities between the median SP in 2003-2005, and the last three years.  In both cases, the frenzy caused a large increase one year, followed by a smaller jump the next year.  It then plateaued in 2006 and 2007, in spite of the easiest credit ever.  I think we can expect a similar plateau-like event in pricing.

B.  In 2014, we had 3% fewer listings, but 12% fewer sales than in 2013.  The pricing strategies being employed are less effective than before.

C.  Over the last two years, more than half of the sales occurred within the first month the house was on the market.

Expect more of the same this year!

Posted by on Jan 13, 2015 in Jim's Take on the Market, North County Coastal, Same-House Sales | 3 comments

Hot Start in 2015?

Here’s why I think we’re going to get off to a fast start in 2015:

mortgage rates 123114

1.  Mortgage rates are LOW!

We’ve seen previously how sub-4% rates have energized the demand.  Now that rates have been in the 3s for a number of weeks, the word is getting out.

2.  Inventory is picked clean.

December 31st is the day that has the most listings expire, and we lost 126 last night.  This morning there are only 695 houses for sale between La Jolla and Carlsbad, an area of roughly 300,000 people.  Not much for buyers to consider.

3.  Old listings are selling during the holidays.

Of the 64 NSDCC houses that went pending since December 18th, twenty-nine of them (45%) were on the market for more than 60 days – and that’s not counting the relists.  During the Hanukkah/Christmas time, buyers went out of their way to snap up a home that has been sitting for months?  You would think it would be tempting for them to let an old listing ride a couple of more weeks and get back to Santa instead.

4.  Smart-pricing is being accepted.

Now that prices have been flat or barely rising for a year, sellers and agents are figuring it out – you can’t throw any old price on a house and expect it to sell.

SD market conditions

All we need is more product!  We should see a slew of relists this month – my guess is 50% of the ‘new’ listings will be ones that failed to sell in 2014.  But they will help shine the spotlight on the hot, fresh new listings!

Get Good Help!

Posted by on Jan 1, 2015 in Forecasts, Jim's Take on the Market, North County Coastal | 0 comments

Higher-End Surge

surge

Hat tip to daytrip for sending in this latimes.com article about the surge of high-end home sales across the Southland:

http://www.latimes.com/business/la-fi-luxury-home-sales-20141124-story.html#page=1

An excerpt:

Luxury home sales in Southern California are hitting levels not seen in decades. The number of homes bought for $2 million or more in recent months is the highest on record. Sales worth $10 million or more are on pace this year to double their number from the heights of the housing bubble.

“It’s pretty mind-blowing, to be honest,” said Cindy Ambuehl, an agent with the Partners Trust in Brentwood. “The luxury market has been completely on fire.”

Low interest rates, a strong stock market and waves of cash sloshing in from overseas are boosting demand for high-dollar homes. A record 1,436 homes worth $2 million or more were sold in the six-county Southland in the second quarter, according to CoreLogic DataQuick.

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

How are we doing locally?  It’s worth noting that the supply of higher-end homes has been surging too (assuming the ‘refreshing’ of listings has been fairly constant over the years).

Below you can see how the market has been shifting upward:

NSDCC Detached Homes Listed/Sold By Price Range

Year
0-$1M
$1M-$2M
$2M-$3M
$3M+
2011 New Listings/Solds
3,028/1,663
1,446/674
447/154
410/93
2012 New Listings/Solds
2,362/2,039
1,313/819
404/194
415/133
2013 New Listings/Solds
2,140/1,750
1,713/1,074
560/259
514/168
2014 New Listings/Solds
1,791/1,263
1,723/938
539/218
538/161

These are 12-month stats so you need to extrapolate to compare 2014 accurately (add about 10% to these current counts). You can see how the Under-$1M folks have been left shaking their head – they have about a third fewer homes to consider since 2011!

Posted by on Nov 24, 2014 in North County Coastal, Sales and Price Check | 1 comment

“Successful U-Turn”

http://www.reuters.com/article/2014/11/20/us-usa-economy-housing-idUSKCN0J41P620141120

U.S. home resales jumped to their highest level in more than a year in October and outpaced the sales level a year ago for the first time in 2014, further evidence the housing market is on a recovery path.

The National Association of Realtors (NAR) on Thursday said existing home sales rose 1.5 percent to an annual rate of 5.26 million units, the highest rate since September of last year. Sales rose 2.5 percent compared to a year ago, the first time since October 2013 that nesales have risen above the prior-year levels.

Economists polled by Reuters had forecast sales falling to a 5.16 million-unit pace, from an upwardly revised rate of 5.18 million units in September.

“This is the first time in the year where we have seen a year over year annual gain, which means that existing home sales have made that successful U-turn,” Lawrence Yun, NAR’s chief economist, told reporters.

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

I thought things were going pretty good nationally, and if we could get looser credit then everything would be fine.  Now I guess a ‘successful U-turn’ means….good or bad? :lol:

Yunnie deserves a break; he has done a much better job than David Lereah.  In July, Yun did say that he expected a slight uptick in sales during the second half of the year:

http://www.realtor.org/news-releases/2014/07/pending-home-sales-slip-in-june

Locally this year we haven’t beat any of last year’s monthly sales counts.  Here are the NSDCC Detached-Home Sales for 2013 and 2014:

graph (52)

Last year was so hot due to low rates and prices that it’s doubtful we will see those numbers anytime soon.  But we have been close enough!

Posted by on Nov 20, 2014 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

SD Case-Shiller Tiered

We saw this week that the local seasonally-adjusted Case-Shiller Index has been trending negative since April.  Here we see how the recent gains have been driven by the lower-end properties:

CSI tiered

The difference could simply be a percentage thing – a home’s value that goes from $300,000 to $400,000 has risen 33%, while a $700,000 home that goes up to $800,000 has only increased 14%.

But the underlying story is that the upper-end home values haven’t done much over the last 18 months.

Read more here:

http://journal.firsttuesday.us/california-tiered-home-pricing-2/1592/

An excerpt:

As in 2010, today’s price movement is the tail end of a mini-bubble, set into motion some 18 months earlier. This price rise was produced by short-lived speculator interference in 2013 (not a tax stimulus, as in 2009). This pricing activity is under pressure from insufficient personal incomes, rising fixed-rate mortgage (FRM) rates and new construction.

Prices are expected to continue to fall in the coming months, bottoming in 2015 and retreating toward the mean price trendline. The cooling of speculative fever and continually rising mortgage rates will prolong the falling trend in sales volume, pulling prices down in turn. Remember, real estate prices track and run with bond prices due to interest rate movement. A lag time of a couple of months exists due to remaining perceptions of past real estate price movement — the sticky price phenomenon.

Posted by on Nov 6, 2014 in Jim's Take on the Market, Market Conditions, North County Coastal, Same-House Sales | 4 comments

Who’s Selling?

Yesterday we wondered if there was a possible threat of a baby-boomer liquidation sale in the coming years, and we had a load of comments – thanks for participating!.

Can we get a feel for what’s happening now?  Here’s a check of the 67 NSDCC houses that have sold between $750,000 and $1,000,000 in the last 30 days.

These are the years when the sellers purchased:

Years Purchased
Number of Sellers
1965-1980
8
1981-1990
4
1991-2000
12
2001-2007
23
2008+
20

Only a couple sold for less than the price they paid, and there were 3 short sales too (no REO listings).  The newer homes in Carmel Valley bolstered the more-recent stats too.

About 36% of the sellers bought their home prior to 2001, and are probably baby-boomers (or older). Most will at least be empty-nesters by now, and could be candidates for the ‘downsize and travel’ crowd. If their numbers increased, they would most likely be offering older fixers upon which flippers can feast, and eventually be sold to those looking for a substitute for new homes, which are in short supply.

Posted by on Oct 24, 2014 in Jim's Take on the Market, Market Conditions, North County Coastal, Thinking of Buying?, Thinking of Selling? | 16 comments

September Sales

Sept 2014 sales

Here’s an excerpt from the Dataquick sales release for September:

http://www.dqnews.com/Articles/2014/News/California/Southern-CA/RRSCA141013.aspx

Irvine, CA—Southern California home sales hit a five-year high for a September, rising slightly above a year earlier for the first time in 12 months amid gains for mid- to high-end deals. The median sale price fell below an 80-month high reached in August and for the first time in more than two years none of the Southland counties posted a double-digit year-over-year price gain, CoreLogic DataQuick reported.

A total of 19,348 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 2.9 percent from 18,796 sales in August, and up 1.2 percent from 19,112 sales in September 2013, according to CoreLogic DataQuick data.

On average, sales have fallen 9.4 percent between August and September since 1988, when CoreLogic DataQuick statistics begin. Last month marked the first time sales have risen on a year-over-year basis since September last year, when sales rose 7.0 percent from September 2012.

September home sales have ranged from a low of 12,455 in 2007 to a high of 37,771 in 2003. Last month’s sales were 18.3 percent below the September average of 23,695 sales.

The median price paid for all new and resale houses and condos sold in the six-county region last month was $413,000, down 1.7 percent from $420,000 in August and up 8.1 percent from $382,000 in September 2013. The August 2014 median was the highest for any month since December 2007, when it was $425,000.

Southland sales were 2.9% higher in September than August, when on average there is a 9.4% decline?  Considering how high prices are, that’s good.  We didn’t do as well locally.  Here are the stats for NSDCC detached-home sales:

Mo./Year
# of Sales
Avg. $/sf
Avg. DOM
Sept. ’13
263
$470/sf
52
Aug. ’14
245
$500/sf
45
Sept ’14
231
$478/sf
49

Sales were down 12% year-over-year, and 6% lower than August.

Posted by on Oct 15, 2014 in North County Coastal, Sales and Price Check | 6 comments

NSDCC August Sales

This may be a preliminary look, but there won’t be many more late reporters.  Agents are supposed to mark their sales closed within 48 hours, and we’re a week out.  But even considering the typical end-of-summer slowdown, it looks like sales are plunging.

Today, the MLS shows a paltry 234 detached-home sales last month, the lowest August total of the last four years:

Year
# of Sales
Median SP
Avg. $-per-sf
Avg. DOM
Aug ’09
215
$825,000
$373/sf
83
Aug ’10
210
$838,000
$389/sf
63
Aug ’11
240
$825,000
$389/sf
80
Aug ’12
298
$865,000
$381/sf
84
Aug ’13
324
$953,750
$437/sf
40
Jul ’14
268
$1,050,000
$490/sf
45
Aug ’14
234
$1,011,500
$450/sf
46

While we enjoyed some frenzy-like months during the 2014 selling season, it looks like we’re heading back to the far-more mundane pace of 3-5 years ago.

graph (50)

For sellers who tacked on an extra 5% to 10% to your list price:  If it doesn’t work, at least adjust downward fast enough that the urgency stays higher, and you beat the holidays – Halloween is only seven weeks away!

 

Posted by on Sep 8, 2014 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 12 comments