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Category Archive: ‘Sales and Price Check’

Mid-Summer $1M Market

Summer 2015

The OC Register is reporting that million-dollar sales in Orange County are down 12% this mid-summer.  We’re watching the sales counts closely, because we know that is the leading indicator for the market.

How about our north county coastal region?

The OCR only looked at zip codes that had a $1,000,000 median sales price, which in our case, excludes all four zips in Carlsbad.

Here are the stats on the Encinitas-to-La Jolla sales over $1,000,000 (where 91% of the active listings today are over $1M) between July 13th and August 11th:

Year
# of Sales
Median SP
Avg $/sf
Avg SP
Avg DOM
2013
107
$1,560,000
$570/sf
$2,021,119
57
2014
111
$1,600,000
$593/sf
$1,849,571
62
2015
121
$1,500,000
$585/sf
$2,062,434
56

Our $1M sales count was up 9% YoY, instead of down – yippee!  But nobody in this market should get giddy about pricing in general – it is flat, at best.

Posted by on Sep 1, 2015 in Del Mar, Jim's Take on the Market, La Jolla, North County Coastal, Rancho Santa Fe, Sales and Price Check | 0 comments

Frenzy History In Color

frenzy graph

Let’s describe the frenzy era…..so far:

2012: Rev the engines, we have liftoff.

2013, first half: Full tilt boogie, prices going up as fast as they can.

2013, second half: Mortgage rates rise 0.75% to snuff out price rally.

2014: Normalizing.

2015: Rates dip under 4% to begin the spring selling season, sparking a rally.

If the Fed does raise a rate this year, it won’t be much – maybe 0.25%. We will survive a similar bump in mortgage rates, and it might be a relief for it to have finally happened.

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

Posted by on Aug 21, 2015 in Frenzy, Jim's Take on the Market, Sales and Price Check | 1 comment

NSDCC July Sales

Last month’s sales blew the doors off – more sales at higher prices!

But notice how pricing has been leveling off:

July Detached-Home Sales between La Jolla and Carlsbad

Year
# of Sales
Avg. $/sf
Median SP
Avg. DOM
Avg. SF
2012
258
$365/sf
$850,000
76
2,902sf
2013
297
$418/sf
$930,000
40
2,999sf
2014
271
$451/sf
$1,018,000
46
3,086sf
2015
309
$457/sf
$1,025,000
41
2,952sf

Posted by on Aug 12, 2015 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 4 comments

FHFA Index

NickTim

I tweeted this last week but Nick re-tweeted today so it must be pertinent to something.  Note his comment section too:

http://blogs.wsj.com/economics/2015/07/28/are-home-prices-again-breaking-records-not-really/

An excerpt:

Median prices of new homes have hit records, both in real and nominal terms. This also reflects the mix of sales: Home builders are selling fewer than half as many homes as they were in 2006, when the old records were reached. Instead, they are selling a much larger share of luxury homes with bigger floor plans than before, which has pushed the median price higher and higher.

The Federal Housing Finance Agency’s repeat-sales index is unit-weighted, so that inexpensive homes sold in Kansas count the same as pricier ones in California.  The FHFA index shows prices are around 7% below their prior high, but adjusted for inflation, they’re around 19% lower.

Read full article here:

http://blogs.wsj.com/economics/2015/07/28/are-home-prices-again-breaking-records-not-really/

Posted by on Aug 11, 2015 in Jim's Take on the Market, Sales and Price Check | 2 comments

Rest of 2015

This summer’s 3-mo moving averages look quite different from last year.

In 2014, the list-pricing started to falter as summer approached, and stumbled along until this spring.  But since then, we’ve been on a tear!

summer 2015 avg LP vs avg SP

How can it be explained?  The lower-end buyers are more affected by rising rates, so maybe they are scrambling to buy anything affordable while they can?

According to the MLS, the San Diego County detached-home sales are 7% higher for the first seven months of 2015, compared to last year!  Summer sales this year are hotter than the 2013 frenzy levels in the graph below.

summer 2015 actives vs solds

Any decent houses-for-sale have been gobbled up so quickly that the inventory appears bleak to casual observers who only see low numbers and lousy offerings left behind by the more-motivated buyers.

The casual buyers and sellers will check out once school starts – leaving the rest of this year to the motivated players on both sides.

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

Posted by on Aug 3, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, Sales and Price Check | 1 comment

Qualcomm Layoffs and Real Estate

qcom

http://www.nytimes.com/2015/07/23/technology/qualcomm-earnings-q3.html

The Qualcomm press release today:

http://247wallst.com/technology-3/2015/07/22/qualcomm-to-fire-15-of-staff-after-cutting-outlook-adding-directors/

An excerpt:

The company expects to fire about 15% of its semiconductor business’ full-time staff, significantly reduce its temporary workforce, and streamline its engineering organization.

They expect to layoff around 4,500 people company-wide.  What does that mean for the local real estate market?  Let’s point out the general changes:

1. YOU DON’T HAVE TO MAKE YOUR PAYMENTS.

A result of the financial crisis – banks are equipped to let you ride for months or years without making payments.

2.  CUSHION

There will be severance packages, plus stock and stock options to live on.

3.  ONLY RECENT PURCHASERS WOULD FEEL THE SQUEEZE.

If a Q-employee bought their home more than 3 years ago, they have plenty of equity, and have probably re-financed at a low rate.  Payment amounts are tolerable, especially compared to rents in the same area.

4.  MICKELSON EFFECT

Phil Mickelson made a big stink about the state tax he has to pay (probably around 13%) – but you haven’t heard a peep out of him since. Why?  My guess is that his wife put her foot down, and told him they aren’t moving anywhere.  The same thing would happen here – even if a spouse or both are laid off, they will exhaust all avenues to maintain the same lifestyle and kids’ upbringing.  Selling the house would be the absolute last resort.

5. BANK OF MOM AND DAD

The kids have been very successful up to now, and the grandparents will drain a few accounts to help keep the grandkids’ lifestyle in place.

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

There would be loads of buyers today of homes priced at 20% under today’s values.  If that is the floor, then about 10% off would be a retail-price target.  We could have a few different factors contribute to a similar discount (Fed move, Grexit, unknown factors, etc.), but we already endured the most severe downtown in the history of real estate and the premium areas didn’t take much of a hit.

Let’s use Carmel Valley as the target market to follow:

May + June stats
# of Sales
Avg. $/sf
Median SP
Avg. SF
2007
96
$391/sf
$1,003,750
3,117sf
2012
113
$323/sf
$883,000
3,076sf
2015
97
$405/sf
$1,235,000
3,183sf

A mass exodus of elderly or foreign homeowners is much more of a concern – they’re urgency is higher, they have less reasons to stay, and they can probably afford to dump.

Posted by on Jul 22, 2015 in Carmel Valley, Jim's Take on the Market, North County Coastal, Sales and Price Check | 11 comments

SD County Sales

happy

Lots of happy talk today about the highest sales pace in eight years, and the highest U. S. median price of all-time.  Somehow they left out the credit-is-too-tight mantra this week?

http://www.housingwire.com/articles/34546-existing-home-sales-prices-reach-all-time-high

An excerpt:

Lawrence Yun, NAR chief economist, said that buoyed by June’s solid gain in closings, this year’s spring buying season has been the strongest since the crisis began.

“Buyers have come back in force, leading to the strongest past two months in sales since early 2007,” Yun said. “This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy.”

But the happiness has it limits – and around San Diego County it’s those detached-homes under $1,000,000 that are really cooking:

Category
Below $1M
Above $1M
Active Listings
3,958
1,625
June Solds
2,161
315
Months’ Worth of Inventory
1.8
5.2

The trickle-up effect hasn’t benefitted the higher-end market as much as you’d expect. Maybe now that lenders have eliminated the anti-buy-and-bail guideline, we might see more move-ups!

Posted by on Jul 22, 2015 in Jim's Take on the Market, Sales and Price Check | 3 comments

California Sales and Prices, June 2015

California sales June 2015

Janet Yellen is still saying that tight credit is hampering home sales, but it doesn’t appear to be stopping buyers throughout the state of California.

Sales over the last three months were higher than in 2014, and prices are still rising too.  If there were more properties to sell, it would be even hotter:California prices June 2015

See the full report here:

https://www.propertyradar.com/blog/real-property-report-california-june-2015

Posted by on Jul 20, 2015 in Jim's Take on the Market, Sales and Price Check | 9 comments

NSDCC Months’ of Inventory

foot traffic

These guys are making the pitch for why potential sellers should list their home (with Jim) and sell now, using NAR stats that show foot traffic is up, and inventory is down:

http://www.keepingcurrentmatters.com/2015/06/29/two-graphs-that-scream-list-your-house-today/

Historically its been said that six months’ worth of inventory is ‘normal’ and demonstrates a healthy market.  But it doesn’t take into consideration the buyers’ behavior in a tight-inventory environment, and how the internet has supercharged the dissemination of new listings.

I’d say about 3 months of inventory would indicate a healthy market today.

Let’s break it down by price range too, because different segments are hotter.

NSDCC Detached-Home Inventory:

Price Range
# of Active Listings
# Sold in June
A/S = Months’ of Inventory
0-$800,000
111
66
1.7
$800-$1.4M
299
164
1.8
$1.4M-$2.4M
280
71
3.9
$2.4M and up
398
30
13.3

Sellers can adjust accordingly – the lower your price point, the more likely you will be able to sell for retail, or retail-plus. If you are in the upper region, you should undercut the competing listings nearby because, well, how should we say it, your market is bloated-plus.

Get Good Help!

Posted by on Jul 8, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 0 comments