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The late-reporters will add about 10% to these numbers, but it looks like the overall sales will continue their downward trend.  When you drill down to the individual zip codes, it’s a mixed bag, but good to see 92067 slip under $400/sf for the third time this year. 

Detached sales for August, Year-Over-Year:

tj and the bear asked about the million-dollar-plus market history in North San Diego County Coastal:

Obviously, the 2010 numbers are year-to-date. There are 137 pendings currently, so we might reach last year’s total of 742 sales, and get about 5% more house at an improved price-per-sf of 14% if these stats stay the same.

Note the pause in sales in 2001, when historically the market should have begun to taper off in a typical 10-year real estate cycle. But mortgage lenders, in particular Countrywide, started pushing the short-term, interest-only mortgages in 2001, and then the neg-ams in 2003. You know how the rest of the story unfolded.

Let’s also note that in 1996 you got a real mansion for a million dollars. There wasn’t a sale over $1,000,000 in 92130 until there was just one in 1998, here’s how other areas have fared since then:

The 1998 sale in 92130? It was new construction in RSF Farms. The seller bought the lot in 1997 for $292,000, built the 4,427sf house and sold it exactly 10 months later for $1,049,000. The agent didn’t put the listing on the MLS for four months, then marked it sold after 2 days, and represented both parties. The house resold 26 months later in 2000 for $1,830,000, a profit of 74%. Those buyers still own the house, and have refinanced four times since. What a country!

We’ve seen the trustee-sale stats slowing down, could it be a problem with processing, and a backlog of properties beginning to clog the system? 

According to foreclosureradar.com, since January, 2009 there have been 15,471 SFRs and condos in San Diego County that have had their trustee sale, and gone back-to-bene.  In the same time frame, there have been 14,313 new REO listings hit the MLS, so it appears the processing is keeping up – that’s only a 1,158 difference:

It looks like the servicers are able to handle the current workload, and that it’s purely the banks’ decision to stop foreclosing, and switch to loan mods and short sales instead.

The MLS shows that last month there were 3,288 total sales in San Diego County, with about 40% of them being bank-related (1,953 regular, 684 short-sales, and 651 REOs).

In the second half of 2009, there were 18,646 closings on the MLS, with 43% being bank-related .If buyers flock to the sidelines for the second half of this year, the lower-motivated regular sellers will likely cancel, and the REO and short-sales will likely be moderated by the servicers to maintain calm.

The current inventory count isn’t alarming, but it is growing.  There are 9,444 regular (75%), 2,231 short-sale (18%) and 956 REOs (7%), or a total of 12,631 active listings in SD County currently.

I think we could average 2,000 – 2,500 sales per month for the second half, and still have an orderly market.  Mortgage rates in the mid-4s will help keep buyers interested, and hopefully there will be some discounted quality homes for sale! 

Inventory is rising, houses aren’t selling, yet list prices don’t seem like they are coming down much.

It sounds like the Big Standoff.

Let’s compare to this year to 2009, which had the hottest spring activity since 2005. 

Here are the early July detached-listing stats for the La Jolla-to-Carlsbad region, compared to 2009:

The 100 new pendings from last year have all closed, with 86 of this year’s 89 count still in escrow – but there are 141 marked contingent that will supplement the current pendings that fall out, and there will also be some late-reporters – let’s call it 89 for now? 

Up until the end of June the 2010 stats comapred very favorably to last year, but now conditions look a little jittery – there are a total of 1,652 active listings currently, and only 241 closed in the last 30 days (and 84 in the last 15 days). I think we’ll see more signs of a slowdown, at least until sellers start lowering their list prices.  Some aren’t far off, probably only 5% to 10%, but they’re getting stale quickly.  Others need a 10% to 20% reduction just to get in the game.

Could we run out of buyers?   Price will fix anything.

The NAR Pending Home Sales Index was released today.  They reported a 30% decline in May pendings (vs. April) and it didn’t even garner it’s own post at Calculated Risk, so either nobody cares about what’s coming out of NAR (most likely), or the drop was expected.

The index is a national reading, how are we doing in San Diego County? Here are the detached closed sales for SD County:

*June, 2010’s number of sales will probably increase 10% or so, due to late-reporters.

Compared to last year, the demand looks steady, even with average square-foot costs up about 10%. The tax credits probably helped, but now that they’re over, can we get a better feel for what’s coming?

Here’s a look at the current detached pendings.

Those from last year have closed, while about half of this year’s numbers are still pending, and subject to fallout (20% to 25%?).  But the 2,392 listings marked ‘contingent’ (short sales) are not included, and should pick up the difference, so I think we can make some decent comparisons. These are detached listings grouped by the month they were marked pending:

SD County Detached Pendings

Only 315 of April’s remaining pendings are still eligble for the fed tax credit, and none of these will get state cheese. The local detached market has been resilient!

Once you add in the contingents, this summer’s closings are shaping up to be stronger than last year, without the tax credits, and in the face of unemployment, economy, etc.

The inventory is on the rise though, according to housingtracker.net, which is probably more due to so many over-priced turkeys (OPTs) not selling, than anything else.  Expect that to continue for a couple more weeks before we see the motivated sellers quicken their pace to the exits:

The inventory rise/fall is measuring the list-price accuracy. There are plenty of buyers who would like to take advantage of the sub-5% mortgage rates, and if sellers can live with just a little less, we will have a very productive third quarter (might be a big ‘if’ though).

The first half of 2010 is wrapping up in two weeks, how have we been doing?

Here are detached stats for North SD County Coastal region (Carlsbad to Carmel Valley):

2009 (Jan 1 to June 15) vs. 2010 Y-T-D

Even though sales increased 34% year-over-year, the other stats are in a virtual flatline.

How have this year’s sales been financed?

Types of Financing Used

The cash purchases in June have amounted to 23% of the total sales so far (17/74).

How do the sales break down according to days on market?

The sellers of more-expensive homes are a little more stubborn about getting their price.

Who’s living in these homes?

Glad to hear that not many sellers are torturing their tenants.

How many are marked as bank-related sales?

Incredible that only 18% of the sales are bank-related, but there are probably many more that are actually distressed. Will the positive headlines about housing propel the market through the remainder of 2010?

Rich Toscano does nicer graphs – from the Voice of San Diego:

As with prices, San Diego home sales were up sharply in May. 

The graph below shows that activity first dropped in April as people delayed closing to get into the tax credit double-dip window (as described in the prior entry on prices) and then surged by 17 percent once the window arrived.  The window will remain open through June, so we should see another strong month in June followed by weakness in July as buyers pull their purchase dates forward to maximize their tax credit haul.

 Despite the number of homes being purchased, inventory rose yet again in May.  The increase was modest — under 3 percent — but this next graph shows that the sustained rise in inventory this year is unlike anything we saw in 2008 or 2009.

 

 If supply keeps rising like this, the post-tax credit lull in demand (should the various tax credits ever end) could create some price weakness.  But that is a possibility in the future.  The incentive-laden reality as of now, or at least as of last month, is that prices are strong and homes are flying off the shelves.

Remarks from page 42 of the C-S May Survey of real estate agents (mostly new-home sales):

Traffic fails to meet expectations.

Buyer traffic came in short of agents’ expectations in May, as our traffic index fell to 20 from 52 in April, short of a neutral reading of 50, pointing to traffic below expectations (readings lower than 50).

70% of agents said traffic was below expectations, 20% said it met expectations, and 10% said it was above expectations.

Prices and incentives stabilize.

Home prices stabilized in May, as our price index came in at 55 (from 69 in April), in-line with a neutral reading of 50, pointing to sequentially unchanged prices (readings greater than 50). 50% of agents said prices were unchanged over the past 30 days, 30% said they increased, and 20% said they declined.

Meanwhile, sellers kept incentives steady in May, as our incentive index came in at 50 (from 39 in April), with readings of 50 suggesting stable incentives over the past month. 78% of agents said incentives were unchanged, 11% said they were lower, and 11% said they were higher.

Length of time needed to sell a home increased – a negative indicator for future pricing trends.

Our time to sell index came in at 25 in May (from 58 in April), falling below a neutral reading of 50, suggesting an increased time to sell over the last 30 days.

50% of agents said the time to sell increased, and 50% said the time to sell was unchanged. We view the longer time to sell as a negative indicator for future pricing trends.

Comments from real estate agents:

• “The tax credit ended. It helped April, but left May dead.”
• “The tax credit brought buyers into April, and left nobody for May.”

Standard Pacific and Lennar have the greatest exposure.

Standard Pacific has the most exposure to the San Diego market, as it represents approximately 5% of the company’s sales. San Diego represents 1% of Lennar’s sales.

CS May survey

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Here’s a review of SD detached listings from the MLS:

A whopping 4% increase for the number of May closings, Y-O-Y, and it looks like slowdown ahead with May pendings indicating fewer sales in June/July (much like last year). Will it pick up towards the end of summer?

Our friends at Dr HB mentioned that inventory is rising in Southern California.

How about San Diego?

Here is a comparison of all detached and attached SD properties listed in April and May since 1999, and the percentage change between the two months:

Yes, there is still a day left in this month, but when the May, 2010 listings are around the lowest of any in the last eleven years, it’s not a flood. But are the homes priced to sell, or priced to sit?

Housingtracker.net publishes the monthly average inventory of houses and condos back to 2007.  The change in inventory between January and May can give us a feel for the accuracy in pricing – is the supply of active listings growing, or shrinking?

It was frenzy-like last spring, but this year is a different story. The plus-27% increase this year shows the exuberance of sellers’ pricing – we’re seeing some of the worst list-pricing in history, relative to actual market values.

From Eric at the nctimes.com:

As the national housing market continued to languish, San Diego County values rose 10.8 percent in March compared with 12 months earlier, as a smaller number of buyers chased deals on the most expensive homes, according to the latest update of Standard & Poor’s Case-Shiller Home Price Index.

Since house prices bottomed out in March 2009, the county’s prices have taken a Super Ball-like rebound. Much of that bounce came from a frenzied market of investors and first-time homebuyers looking to buy the cheapest homes, while more expensive homes languished.

But the activity in March flipped that trend on its head: Homes priced under $311,200 fell 0.5 percent, the first monthly drop since May, though still up 11.3 percent since the previous March. Meanwhile, homes priced above $465,686 rose 2.9 percent in March from February, up 7.7 percent from the previous year.

The number of sales recorded in the index fell to 3,192, the seventh consecutive monthly decline, off a third since its last high, in August.

“I think buyers come into the market looking for a great deal, and realize that there are very few,” said Carlsbad real estate Jim Klinge in an e-mail. “The ’steals’ tend to be extremely elusive due to multiple offers and agent shenanigans, and as a result, the buyers’ focus shifts to making a quality buy that fits most of their needs well.”