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Category Archive: ‘Sales and Price Check’

“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 October Sales and Prices

Oct 2014

From the DQ:

http://www.dqnews.com/Articles/2014/News/California/Southern-CA/RRSCA141112.aspx

An excerpt:

“It was another sub-par month for Southern California home sales. We’ve yet to see traditional buyers fill the void left by the drop-off in investor and cash buyers, which began in spring last year,” said Andrew LePage, data analyst for CoreLogic DataQuick. “Of course, there are multiple reasons for this year’s lackluster sales. New-home transactions are still running at about half their normal level. The resale market is hampered by constrained inventory in many areas, in part because some people who want to put their homes up for sale still haven’t regained enough equity to purchase their next home. Then there are the would-be buyers who continue to struggle with affordability and mortgage availability, if not uncertainty over their employment or the direction of the housing market.”

They are great at reporting the MoM, YoY, and regurgitating the same tired old excuses.  If sellers would just lower their asking prices it would fix everything.

It appears that sellers are just waiting for the market to catch up to their list prices. But this is why inventory starts to build – sold prices aren’t going up.

The median-sales-price trend can be skewed by the hotter low-end doing all the heavy lifting.  While the low-end is still hot, it looks like the higher-end must be soft or declining – the Median SP has been flat for 7-8 months straight (which includes decisions made at the end of the last selling season).

From the DQ reports:

Month
2013 Median SP
2014 Median SP
Jan
$350,000
$405,000
Feb
$359,000
$410,000
Mar
$380,000
$427,000
Apr
$400,000
$435,000
May
$406,500
$440,000
Jun
$416,500
$450,000
Jul
$417,500
$445,000
Aug
$415,000
$448,500
Sep
$422,000
$445,000
Oct
$412,750
$440,000

Rates are 4% and under, buyers are sticking around, and there are 7,680 houses and condos for sale in SD County.  Price will fix the rest!

Posted by on Nov 13, 2014 in Jim's Take on the Market, Sales and Price Check | 2 comments

NSDCC October Sales

There will still be a few stragglers, but the October numbers are shaping up as expected – fewer sales but healthy pricing.  The frenzy was zooming by the end of 2012, but it was settling down by October 2013 after rates popped that June.

Here are the last 11 NSDCC Octobers, for comparison:

October
# of Sales
Median SP
Avg $/sf
Avg DOM
# over $3M
2003
306
$778,500
$369/sf
57
11
2004
229
$895,000
$453/sf
63
12
2005
218
$1,065,000
$468/sf
60
16
2006
186
$888,762
$424/sf
83
11
2007
145
$920,000
$483/sf
75
13
2008
195
$800,000
$406/sf
74
12
2009
211
$805,000
$407/sf
86
7
2010
188
$854,750
$364/sf
79
6
2011
186
$835,000
$379/sf
85
11
2012
297
$825,000
$388/sf
77
10
2013
266
$957,500
$495/sf
57
16
2014
235
$982,655
$468/sf
60
12

Look how similar this year is to 2005. After two years of spectacular run-up in both cases, we’re at the identical $/sf.

With rates bobbing around 4%, our softer landing should continue.

rates-2

Posted by on Nov 5, 2014 in Jim's Take on the Market, Sales and Price Check | 8 comments

Hang In There Buyers!

We seen the local NSDCC detached-home inventory hovering lately, instead of dropping off as expected.  Two other signs, declining sales and SP:LP, make it look like buyers are gaining  more control as we head into Halloween week.

The number of sales between August 15 and October 15 are down 18% from last year (and 25% from 2012), though there will be some late reporters:

Year
# of Sales
Median SP
Avg SP
SP:LP Ratio
Avg DOM
2011
444
$822,500
$1,052,013
91%
86
2012
618
$838,500
$1,116,907
95%
76
2013
559
$994,300
$1,324,491
96%
52
2014
461
$1,050,000
$1,418,498
94%
50

Buyers should stay engaged, if for no other reason than the low rates.  The dwindling new listings coming on the market should be ‘motivated’, and if you don’t mind weeding through the long-time listings there should be some deals in there too.

Jumbo rates

Posted by on Oct 22, 2014 in Jim's Take on the Market, Sales and Price Check | 1 comment

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

Sharper Pricing?

How is the fourth quarter rolling out?

Are sellers feeling pressured to lower their price?  Are buyers stepping up?

Here are the pricing trends in our local areas:

SE Carlsbad – List and sales pricing converging should cause an active 4th quarter – unless buyers decide to wait-and-see where this is going:

Oct 2014 92009

Encinitas – An example of what can happen when pricing converges here, where buyers backed off starting in April.  But sellers are proud, and heck, it’s only money:

Oct 2014 92024

Rancho Santa Fe – This is how they roll in the Ranch – put a price on it, and wait for someone to come along.  It results in a meandering trend:

Oct 2014 92067

Carmel Valley – Stunning to see average list pricing in decline since April – but it’s been working.  It keeps the sales momentum rolling:

Oct 2014 92130

La Jolla – List pricing took off in the beginning of 2013, but buyers cooled off for a full year before coming back around in 2014, price-wise:

Oct 2014 92037

Posted by on Oct 7, 2014 in Carmel Valley, Encinitas, Jim's Take on the Market, La Jolla, Rancho Santa Fe, Sales and Price Check | 2 comments

Is There a Need For Experts?

If News Corp helps to clear out all the buyer-agents, and the listing agents end up being paid less, to do less - how will that affect the market?  It will probably burn a little hotter in the good times, and colder in the slow times.

The people who have the most to lose are the big-corporate real estate franchisors who count on their share of commission splits. Expect a long battle!

Buyers – at least the ones making the market – haven’t cared too much about getting good help, they just want to buy a house.  The internet tools have given them enough information that they feel empowered, and heck, it’s just money. Who writes the deal, and the commission amount doesn’t concern them much.

Real estate will keep selling at some price!

The low-inventory environment should continue.  Home auctions will be the next gimmick to tempt people to sell their house, but unless you need to sell, who cares?  Without easy financing, the demand side should stay tempered too, so expect low sales counts from now on.

It’s amazing we’ve done as well as we have – here’s the comparison:

NSDCC Summer Sales (June-August)

Year
# of Sales
2002
988
2003
1,226
2004
1,020
2005
866
Total
4,100
Year
# of Sales
2011
722
2012
895
2013
954
2014
835
Total
3,406

With mortgage qualifying at the polar opposites, it is remarkable that sales are only 17% fewer than the last peak. Did better agent-advice contribute to the strength of sales? Maybe, but not as much as other contributors, like big-cash, internet tools, newcomers, and Qualcomm/bio-tech. Agents aren’t known for being strong advisors that might sway a market; instead, most are order-takers.

Commissions might get softer as (more) desperation overcomes the realtors who are on their way out, but we should lock into a mid-range of sales and pricing that will be fairly steady – at least until rates rise, or the next crisis!

graph (51)

Posted by on Oct 3, 2014 in Jim's Take on the Market, Sales and Price Check | 15 comments

Just Say It

I like Sean and enjoy his high-quality website – and their monthly report.  But they fall into the same rut as the ivory-tower guys when they want to blame the changes in market activity on non-players.

The priced-out buyers do not make the market – they don’t have a vote any more.  All that matters is how the players who are in the game are responding.

I feel like I mention this every day – the primary reason why sales are down is because the ready, willing, and able buyers think that most of today’s list prices are ridiculous.

Because the mass media has yet to grasp this important fact, from now on I’ll just use a photo of something stinky, and you’ll know it means the story to follow is missing the point.

Like in this case, it’s not that she’s wrong - many buyers have been priced out, and sent to waiting-game purgatory.

But if the industry would harp on the direct and specific reason why more homes aren’t selling (sellers are too optimistic), then maybe we could cause a sea change in home-selling.

Very few people are No one is telling sellers that their price is too high – and if the media talked about it, then sellers might catch on sooner.

Here is the August report from PR:

http://www.propertyradar.com/reports/real-property-report-california-august-2014

An excerpt:

August 2014 sales were the lowest August sales since 2010. On a regional basis, over the past 12 months sales are down 15.7 percent in the Bay Area, 16.7 percent in Southern California, and 18.8 percent in the Central Valley.

“The bloom is definitely off the California real estate rose,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “The rapid rise in prices over the past two years has outstripped the ability of many would-be California homeowners to purchase.”

The rapid disappearance of distressed properties available for sale has been a key factor depressing sales. Whereas in August 2013 24.0 percent of sales were distressed properties, in August 2014 distressed property sales comprised only 16.7 percent of the total. In August 2011, 54.7 percent of sales were distressed property sales.

The lack of movement in median prices this past month was due mostly to a shift from less expensive to more expensive homes, not a change in underlying home values.

Posted by on Sep 17, 2014 in Jim's Take on the Market, Sales and Price Check | 3 comments

SD Market Trends

SD prices

The graph above shows how San Diego home buyers have been more patient since rates went up last summer.  They finally conceded some ground, pricewise, over the last couple of months to log a 8.8% increase in the median $/sf year-over-year, but it was flatlining for almost 12 months.

The graph below shows how the active inventory increased steadily since spring (blue line), and though it dropped 7% since last month, it is still 3% higher year-over-year.  In spite of my pleas over the last 2 days for sellers to stay on the market, it’s likely that the active inventory will decline sharply through the holidays (like last year):

SD pricing

Posted by on Sep 16, 2014 in Jim's Take on the Market, Sales and Price Check | 1 comment

More on August Sales

Dataquick released the August sales yesterday, and at first glance you might think we should be looking for lifeboats – this is the second month in a row that Dataquick has reported SD sales dropping more than 18%:

http://www.dqnews.com/Articles/2014/News/California/Southern-CA/RRSCA140911.aspx

aug 14

But August, 2013 was probably the last month that buyers were able to lock in a mortgage rate in the 3s, before rates jumped at the end of June.

If you look at San Diego’s 2014 monthly sales, they look consistent and remarkably strong considering that prices have been going up every month.  Here are the MLS counts for all property types in the county:

Jan = 2,116

Feb = 2,271

Mar = 2,778

Apr = 3,321

May = 3,255

Jun = 3,182

Jul = 3,043

Aug = 2,806

If sales fall off the next few months, the blame will be on the holidays, and sellers will expect a vibrant selling season again next spring.

Posted by on Sep 12, 2014 in Sales and Price Check | 8 comments