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Category Archive: ‘Sales and Price Check’

More on September Sales

From the C.A.R. press release:

“While it’s encouraging that statewide home sales improved both monthly and annually, the year-over-year sales rate is losing steam, reflecting the persistent shortage of homes for sale and an easing of concern over a surge in mortgage rates,” said C.A.R. President Geoff McIntosh. “Additionally, for the areas that have been affected by the recent wildfires, we anticipate sales will pull back in those regions as damages are assessed and replacement efforts are coordinated.”

We’ve discussed how fewer homes for sale could be the sole cause for a drop in sales.  Can we learn something by comparing the change in sales count to the change in inventory!

Rich shows San Diego County inventory down 2% MoM, and down 16% YoY:

San Diego County sales down 16.7% MoM, and down 4.3% YoY:

Here are the ratios in an easier-to-read comparison:

 

Type
Month-over-Month
Year-over-Year
SD Inventory
-2%
-16%
SD Sales
-17%
-4%

A year ago we were in a presidential election cycle – I’m not sure data from that era means much today.  But a 17% drop in September sales from August when inventory only fell 2% is probably worth noting.

The 2% inventory drop didn’t change the selection much, but with 17% fewer sales, it means that the homes for sale must not be as appealing as before.

Posted by on Oct 19, 2017 in Jim's Take on the Market, Sales and Price Check | 0 comments

Gap Between Median List and Sale Prices

Reader hema-mendo wondered about the mega-gap between the NSDCC median list price, and median sales price for the last 30 days:

I don’t get it. Why is the spread so wide?

It is a bit alarming to see more than a million-dollar gap between the two:

NSDCC median list price: $2,300,000

NSDCC median sales price, last 30 days: $1,245,300

Half of the current listings – and 83% of the sales – are under $2,300,000!  None of the supply-and-demand economics seem to apply to the high-end sellers and their agents – they are happy to sit and wait……for something.

Most probably think it just takes time before the right young couple with 2.2 kids comes along some day.  But the numbers are daunting.

A median list price means we have 402 houses listed over $2,300,000, and there were 41 sales of the same over the last 30 days – let’s call it a 10-month supply.  But it’s been this way for years, and no one seems to mind.

This is what happens when virtually everyone on the market is an elective seller, and is loaded with equity.  Once a house hits the open market, the ego takes over because now the sellers’ family and friends know the price.  Unless the reason for selling is one of the Big Three (death, divorce, or job transfer), the seller’s ego insists on defending that price, even though nobody has looked at their home for weeks or months.

Waiting is much easier on the ego than having to dump on price.

Posted by on Oct 17, 2017 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 3 comments

Boom-Bust Comparison

Good to see the California crash of the early 1990s get a mention here. It was a hum-dinger for its time – but they note below that the full recovery only took eight years too.

http://www.mortgagenewsdaily.com/10122017_home_prices.asp

With home prices nearly back to where they were when the housing crisis began, CoreLogic’s principal economist Molly Boesel compares the duration of the recent cycle to those of other downturns.  While there hasn’t been a comparable period of performance nationwide, she looks at several regional ones.

After hitting peak in 2006, the national price level fell for five years, finally reaching bottom in March 2011.  Most other sources set the date for the bottom of the market to exactly a year later which may indicate they are using inflation adjusted numbers.  From peak to trough, prices fell 33 percent nationally. As of July 2017, CoreLogic data shows prices were approximating the 2006 level.

Boesel compares these numbers to those of the Texas oil bust in the mid-1980’s which resulted in a 16 percent decline over 3.5 years. The peak to recovery cycle in that downturn took nearly nine years.  In the early 1990s in California, defense and manufacturing job losses led to home price declines in that state. After falling by 15 percent over five and a half years, home prices in California fully recovered after eight years.  The U.S. home price decreases that started in 2006 were twice as severe as these two regional declines.

While national home price numbers are nearly back to their peak, the recovery is far from even. Nevada, where prices dropped the farthest of any state, 60 percent, the 11-year period that has elapsed has left the state 27 percent short of its March 2006 peak.

In Colorado, on the other hand, prices fell 14 percent from an August 2007 peak but have now surpassed that peak by 42 percent.  Boesel calls Colorado “an extreme case” of rapidly rising prices, but says 34 states are now above their pre-crisis home price levels.

Boesel says inflation should also be factored into the pace of recovery.  From the peak in housing prices through this past July, the inflation has totaled just under 18 percent. When home prices are adjusted for that, the trough was deeper, down 40 percent from the beginning of the cycle, and the recovery shallower; prices remain 17 percent off the peak.

http://www.mortgagenewsdaily.com/10122017_home_prices.asp

Posted by on Oct 17, 2017 in Jim's Take on the Market, Sales and Price Check | 1 comment

Tipping Point?

LOS ANGELES (Sept. 26) – Even with a strong performance in August closed escrow sales, California pending home sales stalled for the second consecutive month, which suggests a softening in the housing market in the upcoming months, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

As August marks the end of the peak home-buying season, the housing market is showing signs of slowing as REALTORS® reported fewer floor calls, listing appointments, and client presentations. Open house traffic, however, remained strong in August, C.A.R.’s August Market Pulse Survey found.

Pending home sales data:

• Based on signed contracts, year-over-year statewide pending home sales fell in August on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI)* declining 3.5 percent from 121.3 in August 2016 to 117.0 in August 2017. California pending home sales also declined down on a monthly basis, decreasing 2.0 percent from the July index of 119.4.

• Pending home sales have declined on an annual basis for seven of the last eight months so far this year. After a solid run-up of pending sales growth in April, May, and July, continued housing inventory issues and affordability constraints may have pushed the market to a tipping point, suggesting the pace of growth will begin to slow in the fall.

• Pending home sales were down 3.8 percent from the previous year in Southern California. Only Orange (1.8 percent) and San Bernardino (2.8 percent) counties posted a year-to-year increase. Los Angeles, Riverside, and San Diego counties registered lower annual pending sales of 1.7 percent, 10.3 percent, and 12.7 percent, respectively.

• C.A.R.’s Market Velocity Index – home sales relative to the number of new listings coming on line each month to replenish that sold inventory, or market indicator of future price appreciation – indicates that home prices should continue to stay strong as home sales continue to outstrip new listings, putting upward pressure on home prices through the fall.

• The Market Velocity Index increased from 59 to 69, indicating that there were 69 percent more homes sold than there were new listings. In other words, the supply of homes available for sale continued to drop, which will make the remaining units more competitive as net supply has deteriorated by roughly 45,000 units this year.

http://www.car.org/aboutus/mediacenter/newsreleases/2017releases/aug2017pending

Posted by on Oct 6, 2017 in Jim's Take on the Market, Market Conditions, Sales and Price Check | 0 comments

NSDCC September Sales, Preliminary

Here’s the preliminary data for detached-home sales between La Jolla and Carlsbad last month:

Year
# of Sales
Avg. $$/sf
Median SP
Avg DOM
2012
289
$373/sf
$780,000
70
2013
263
$470/sf
$1,110,000
52
2014
236
$480/sf
$1,091,000
49
2015
251
$472/sf
$1,059,000
48
2016
264
$515/sf
$1,179,250
46
2017
242
$538/sf
$1,266,110
43

With there being some similarity between this year and the Frenzy of 2013, we might see some resemblance next year to what we saw in 2014 – scattered and varying data on pricing.

When is the best time to sell?  When everyone else isn’t!

Save

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

Frenzy of 2017

Let’s examine Rich’s other charts to see how divergent our San Diego market has been lately, comparing to the last three years.  In spite of much-higher pricing, the raw number of homes for sale has crossed under the paltry few we had during the Frenzy of 2013, and into uncharted territory:

Yet, the volume of sales has been strong – and see June :

The rest of the year looks OK too, though this is for the whole county:

There will be sellers – especially on the higher-end – who didn’t know how motivated they were until now.  Will they lower their price, or wait and take their chances next year? The market couldn’t be much better than now!

https://piggington.com/

Posted by on Sep 25, 2017 in Jim's Take on the Market, Rich Toscano, Sales and Price Check | 0 comments

Softer in the Off-Season

The C.A.R. released the latest sales data for August, including the graph above.

The sales-price-to-list-price ratio has been dipping in the off-season lately, and we can probably expect that streak to continue this year!

Buyers expect to have more negotiating power, and the fixers are the ones that get punished.  Sellers will be smart to do more improvements to their home before hitting the open market!

Posted by on Sep 21, 2017 in Jim's Take on the Market, Sales and Price Check | 8 comments

NSDCC August Sales

Here’s the preliminary data of detached-home sales for August between La Jolla and Carlsbad. By the time we’re done, the count should be 270 or so:

Year
# of Sales
Avg SF
Avg. $$/sf
Median SP
Avg DOM
2012
298
3,255sf
$381/sf
$865,000
77
2013
324
2,782sf
$437/sf
$953,750
40
2014
246
2,889sf
$500/sf
$1,050,000
45
2015
278
2,874sf
$470/sf
$1,030,000
44
2016
288
3,169sf
$487/sf
$1,199,500
48
2017
258
3,120sf
$554/sf
$1,250,500
47

Reader ‘just some guy’ wondered why 2-3 homes are not selling around his newer Carlsbad tract neighborhood. It’s the time of year when buyers are exhausted by how fast prices have been escalating, and they are holding out for perfection now. Historically though, we have been able to keep up the sales pace – last year we had 264 sales in September, and 274 in October!

In last month’s count above, I did take out the four duplicate sales from the CRMLS, the MLS to the north.  Note to Sandicor: Data-sharing is not the same as merging with CRMLS!

Posted by on Sep 6, 2017 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments