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Category Archive: ‘Sales and Price Check’

Fewer Repeat Buyers, Yet Still Cooking

At first, this article below mentions that there has been 50% fewer repeat home buyers:

http://www.builderonline.com/newsletter/repeat-home-buying-has-fallen-drastically_c

Tight credit is making it hard for homeowners to trade up and out of their starter homes, according to findings from the Urban Institute’s latest Chartbook.

Researchers looked at GSE & FHA loans (which made up the majority of the mortgage market except in 2004-2006) and noticed that starting in about mid-2007, the share of first-time home buyers has been consistently between 50% and 60%. Between 2001 and 2007 the share was much lower, with just 40% to 50% of borrowers buying for the first time. They took a closer look to determine if repeat home buying had truly fallen off or if there were just more purchase loans being made by first time home buyers and the same number of repeat buyers still active in the market.

Researchers found that while there were the same number of first-time home buyers in 2001 and 2015 – 1.3 million, there were about ½ as many repeat home buyers: 1.8 million vs. just over 900,000 in 2015.

Repeat home buying took a big tumble and just kept falling after 2007. And it’s no coincidence that this happened at the same time it started to become really difficult to get a mortgage anywhere in the U.S. and hard to build home equity, thanks to dropping home prices.

In spite of fewer repeat buyers, their link to the most recent data showed that San Diego-Carlsbad HPI still went up almost 50% in the last seven years!

7-2016

They said repeat buyers declined 50% between 2001 and 2015, but we had MORE sales between La Jolla and Carlsbad, in spite of almost 2x the pricing:

NSDCC Detached-Home Annual Stats

Year
Total Number of Listings
Total Number of Sales
Median Sales Price
2001
5,842
2,926
$570,000
2015
4,910
3,024
$1,098,000
% chg
-16%
+3%
+93%

Posted by on Sep 28, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 2 comments

NSDCC August Sales

You say the market is soft, and it’s just a price thing.

How do you know?  Check the sales count.

Last year was hot, and yet this year we’ve matched the 2015 August sales.  It doesn’t look like we have any structural issues here, it’s just a price thing.

NSDCC August Sales

Year
# of Detached-Home Sales
Median Sales Price
2011
240
$825,000
2012
298
$865,000
2013
324
$953,750
2014
277
$1,050,000
2015
272
$1,034,500
2016
272
$1,199,500

“But Jim, those August sales reflect decisions made in June and July, and now it’s September”.  OK, then let’s simplify my sellers’ rule-of-thumb.

If you are getting lookers and offers, your list price is close. If you are getting lookers but no offers, your price is probably 10% wrong.  How do you know? Because if the price was within 5% of being right, you’d be getting offers.

A buyer said, “I’m not asking anyone to lose money, I’m just asking the sellers to not gouge me as much”.

Posted by on Sep 9, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

Buy/Sell Now or Later?

median cost per sf

What now?

Summer is over, and the so-called spring selling season is six months away.

Is it worth waiting?

Sellers want to believe that springtime is when all the young families with 2.2 kids will be looking to pay retail-plus.  But that belief ignores the trend – prices been fairly flat around higher-end areas.  Look at the graph above.  The only area that is a good bit higher today than in January is Rancho Santa Fe, which has been on a roller-coaster the last couple of years.

Predictions for next year?  From Zillow:

Zillow SD prediction 2017

Zillow was more pessimistic about 2016 too, so the +1.7% may end up being conservative.  But prices are already setting all-time records, so it is hard to imagine another big pop next year.

We as an industry aren’t used to flat pricing – the drama of violent price swings is much more exciting!  But flat pricing does make it easier, because it eliminates one of the major variables about moving.

If you are going to sell or buy at roughly the same price now or next spring, then which is better?

THE BEST TIME TO BUY OR SELL IS WHEN NOBODY ELSE IS!

If you are buying and come across the right home at the right price, you sure don’t want any competition to screw it up for you!  There will be less competition during the next 4-5 months!

If you are selling in a flat market and have other active listings around you, what if one of them needs to sell worse than you do?  They could undercut your spring-selling-season-2.2-kids-retail-plus program, and leave you hanging.

Remember our Glendale realtor with the line out front?

glendale

There weren’t any good comps nearby all year – a great time to sell when nobody else is!  They ended up with 18 offers (6 were cash) and they had two cash buyers who wanted it so bad that they were willing to pay more than $100,000 over list price!

Thankfully there weren’t any good comps nearby to screw that up!

 

Posted by on Sep 6, 2016 in Bidding Wars, Forecasts, Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

2016 Year-to-Date

2016-07-27 09.20.08

Two-thirds of 2016 is complete – how did we do?

Our local NSDCC market is comprised of 59,119 single-family residences between La Jolla and Carlsbad (according to our MLS tax rolls).  Last year we only sold 3,024 of them, and the way 2016 is going, we will sell fewer this year, in spite of all-time record prices!!

Here is how the first eight months compare for each year – there will be a few extra added to the 2016 totals.  You will notice how remarkably consistent our market has been!

NSDCC Jan-Aug
Total # of Listings
Total # of Sales
Median SP
2012
3,335
2,033
$826,000
2013
3,685
2,291
$930,000
2014
3,565
1,947
$1,022,000
2015
3,677
2,115
$1,090,008
2016
3,764
2,009
$1,165,000

There have been 2% more listings this year than in 2015, and sales declined 5%.

When things were just starting to unravel in 2006, there were 4,602 listings between January and August – I think our bubble conditions are in check.

Save

Posted by on Sep 1, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

Existing Home Sales, July, 2016

nar

Our N.A.R. head cheerleader does his best at fabricating a believable story behind the 3.2% drop in existing-home sales:

Lawrence Yun, N.A.R. chief economist, says existing sales fell off track in July, after steadily climbing the last four months.  “Severely restrained inventory and the tightening grip it’s putting on affordability, is the primary culprit for the considerable sales slump throughout much of the country last month”, he said. Realtors are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.

He needs to follow me on twitter.  I’ve already pointed out twice that there were 9% fewer days in July than in June – and sales only dropped 3.2%?  Sounds like a positive to me.

But instead he feeds his typical bather to America, and leaves it up to the consumers what to make of it.

He should also point out that 2015 was a hot market, with summer sales exceeding those during the super-frenzy of 2013.  Yet sales over the last four months have been close or surpassed those in 2015!  Even with the two fewer days, look how July, 2016 compares to previous years – it was better than 2013!

Yunnie needs say, “Remember, real estate is local”, to end all of his speeches.  This national data and his blunder of an explanation shouldn’t have any impact on local market conditions.  But they could make a difference if casual readers just grab a headline and decide to pack it in for the year.  Thanks Yunnie – you’re supposed to be on our side!

The local scoop:

Detached-Homes
July, 2013
July, 2014
July, 2015
June, 2016
July, 2016
NSDCC # of Sales
297
271
313
298
262
NSDCC Median SP
$930,000
$1,018,000
$1,025,000
$1,204,500
$1,125,000
SD Co # of Sales
2,401
1,992
2,437
2,360
2,151
SD Co Median SP
$480,000
$513,750
$550,000
$565,000
$562,000

NSDCC detached-home sales in July dropped 12% compared to June, with 9% fewer business days. With higher prices, sales should be declining – and for them to drop a net 3% sounds good to me. House sales in San Diego County dropped 9% month-over-month – let’s call it even.

P.S. Regarding his comment that realtors are reporting diminished traffic, it’s because you are sitting on over-priced listings. Lower the price and get in the game, or go get another listing!

Added later – looks great:

months supply

Save

Posted by on Aug 24, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check, Why You Should List With Jim | 3 comments

NSDCC Sales – July

happy news

In the recent past, we have had a real drop-off from June to July in NSDCC sales.  But this year the decline was only 5%, and once the late-reporters are done, it should be close to even:

Year
# of June Sales
# of July Sales
July Median SP
2012
339
258
$850,000
2013
333
297
$930,000
2014
322
271
$1,018,000
2015
336
313
$1,025,000
2016
296
275
$1,125,000

Monthly pricing statistics will bounce around, so watching the trend in sales is the name of the game. A series of significant declines would indicate trouble, and so far there hasn’t been any!

Posted by on Aug 4, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

NSDCC June Sales and Pricing

bump

When comparing the 2016 activity to previous years, we stack up pretty good – when we combine months.

Here are the links to May/June and Jan-Jun numbers.

But when we look at June only, it looks like we’ve hit a bump in the road:

June Sales and Pricing

Year
# of Sales
Avg Cost-per-SF
Median Sales Price
2012
339
$368/sf
$867,500
2013
333
$453/sf
$1,025,000
2014
322
$481/sf
$1,077,850
2015
336
$484/sf
$1,116,000
May16
326
$498/sf
$1,208,750
2016
286
$512/sf
$1,200,000

There will be a few more late-reporters, but not enough to change the fact that June sales declined by double-digit amounts – both MoM and YoY.

The low rates should keep us going through summer though!

Posted by on Jul 10, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

Preliminary 1H16 Numbers

fireworks

Today is the last day of the first half of 2016!

Here is how this year’s NSDCC market compares to previous years:

First Half
New Listings
Houses Sold
Median Sales Price
2012
2,545
1,477
$815,000
2013
2,790
1,670
$919,950
2014
2,712
1,430
$1,020,000
2015
2,769
1,530
$1,127,500
2016
2,879
1,465
$1,154,000

The final counts for 2016 should end up close to 2,900 listings, and 1,500 sales (numbers above were updated on 7/10/16).

It doesn’t really matter if there are more listings scattered around not selling – they only matter if they dump on price to get ‘er done!

Save

Posted by on Jun 30, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 2 comments

Existing Home Sales, May 2016

existing home sales

The national cheerleaders get excited about every nugget of data, and are happy to jump to conclusions.  Yunnie is finally tip-toeing around the downsizing trend that we see everywhere around here, but he can’t assume that those sellers are buying too:

“The May gain over April signals that the real estate market has maintained strong momentum all spring,” says realtor.com chief economist Jonathan Smoke. “We are now in this year’s peak home buying months, and this pace of sales should produce the gains we have been forecasting that will make 2016 the best year of home sales in a decade.

The biggest challenge to prospective buyers right now is tight supply, which we have seen for 45 consecutive months. In these conditions, home values have strong support, but potential buyers will continue to face challenges finding a home for sale that meets their needs. That is why we’re seeing the age of inventory drop dramatically while prices have gone up 5 percent over the last year and are now at record nominal levels.”

Lawrence Yun, NAR chief economist, says existing sales continue to hum along, rising in May for the third consecutive month. “This spring’s sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they’ve accumulated in recent years and finally deciding to trade-up or downsize,” he says. “With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now.”

Adds Yun, “Barring further deceleration in job growth that could ultimately temper demand from these repeat buyers, sales have the potential to mostly maintain their current pace through the summer.”

The local NSDCC sales in May built on the momentum from April, and the 2016 three-month total looks very similar to last year (865 vs. 859):

Monthly Detached-Home Sales, Carlsbad to La Jolla

Year
March Sales
April Sales
May Sales
Median SP
Avg $/sf
Median $/sf
2012
238
272
289
$821,000
$380/sf
$311/sf
2013
299
303
362
$943,500
$416/sf
$366/sf
2014
219
258
269
$950,000
$465/sf
$375/sf
2015
294
278
287
$1,125,000
$497/sf
$410/sf
2016
246
299
320
$1,216,250
$500/sf
$419/sf

Save

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Posted by on Jun 23, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check, Spring Kick | 0 comments