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Category Archive: ‘Sales and Price Check’

NSDCC 11-Month Report

Mortgage rates calmed down yesterday, retreating back to 4.125%, but with all the hysteria about Trump, things sure seem unsettled.

How will we know if our local market is getting into trouble?

Watch three things:

  1.  Inventory/sales relationship
  2.  High-end market
  3.  Actives/pendings ratio

Apply these to your local micro-market, because results will vary by neighborhood.  I started this blog in September, 2005, when it was becoming obvious on the street that change was afoot.

We had a great lesson in 2006 – the inventory took off, and sales plunged:

La Jolla-to-Carlsbad, Jan – Nov

Year
New Listings
Closed Sales
Median Sales Price
2003
5,002
3,609
$725,000
2004
4,955
3,121
$945,000
2005
5,290
2,808
$1,000,000
2006
5,829
2,388
$985,000
2007
5,198
2,339
$1,000,000
2008
5,030
1,905
$900,000
2009
4,811
1,984
$810,000
2010
5,066
2,256
$830,000
2011
4,994
2,342
$828,414
2012
4,246
2,860
$829,200
2013
4,653
3,007
$950,000
2014
4,541
2,599
$1,022,000
2015
4,715
2,771
$1,098,000
2016
4,807
2,761
$1,170,000

The 2016 inventory has increased, but it’s more in line with the average now – which, excluding 2006, is 4,869 per year. Sales aren’t plunging either, so we’re in good shape, at least for now.

How about the high-end market?

Sales are down slightly in La Jolla this year, compared to 2015 (320 vs. 336), but the Ranch is hopping! There have been 13% more sales in the 92067 this year, compared to 2015, and sales in August-through-November are up 46% year-over-year!

graph

I’ll come back to the Actives/Pendings ratio, but at least we have guideposts that look relatively health today!

Posted by on Dec 3, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

NSDCC November Sales, Preliminary

nsdcc

There was one more business day last month than there was in November, 2015, but it’s impressive to just keep up with previous years when we are at higher price points.

NSDCC November Sales

Year
# of Sales
Median SP
Average $/sf
2012
241
$885,000
$415/sf
2013
187
$1,030,000
$474/sf
2014
172
$1,007,450
$491/sf
2015
193
$1,187,500
$520/sf
2016
211
$1,252,840
$546/sf

The big difference is on the lower end.

In November, 2012, there were 37 regular houses sold under $600,000, and last month there were only four – and they were of the patio-home variety.

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

CA Realtor Survey – October

mult

  • The share of homes selling above asking price edged up from 27 percent a year ago to 28 percent in October. Conversely, the share of properties selling below asking price dropped to 44 percent from 47 percent in October 2015. The remaining 28 percent sold at asking price, up from 25 percent in October 2015.
  • For homes that sold above asking price, the premium paid over asking price rose to 9.1 percent, up from 7.7 percent in September and 8.9 percent a year ago.
  • The 44 percent of homes that sold below asking price sold for an average of 8.9 percent below asking price in October, the lowest since May 2015. The premium paid in both September and a year ago was 12 percent.
  • Nearly six in 10 properties for sale (59 percent) received multiple offers in October, down from 63 percent in September and 64 percent from October 2015. October marked the seventh straight month of declining multiple offers.
  • The share of properties receiving three or more offers fell to 30 percent, the lowest level since the beginning of this year. Thirty-five percent of properties received three or more offers in September, and 36 percent of properties received three or more offers a year ago.
  • Compared to a year ago, there was an increase in the share of homes receiving three or more offers in homes priced $400,000 to $499,000 and $2 million and higher, while the share of low- to mid-priced homes experienced a decrease in three or more offers, particularly in homes priced $300,000 to $399,000, which dropped the sharpest – from 43 percent in October 2015 to 18 percent in October 2016.
  • About a third (31 percent) of properties had listing price reductions in October, up from 25 percent in September and down from 32 percent in October 2015.
  • Nearly half (45 percent) of REALTORS® were concerned about high home prices and housing affordability, while 26 percent indicated they were concerned about a lack of available homes for sale. REALTORS® also were concerned about a slowdown in economic growth, lending and financing, rising interest rates, and policy and regulations.
  • REALTORS®’ optimism of market conditions over the next year has been trending downward for the past few months but is still in positive territory at an index of 54 in October, unchanged from September but down from 57 in October 2015.

http://www.car.org/newsstand/newsreleases/2016releases/oct2016pending

San Diego County looks like the best in the state (highest index):

pend

*Note:  C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state.  Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market.  A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually become closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index.  An index of 100 is equal to the average level of contract activity during 2008.

Posted by on Nov 26, 2016 in Jim's Take on the Market, Market Conditions, Sales and Price Check | 1 comment

Trump Effect on Real Estate

Image result for trump

What is the consensus on the Trump impact on our local real estate market?

After speaking to agents on broker preview the last couple of days, I think we can divide the buyer pool into two camps:

  1. There have never been more reasons to wait-and-see.
  2. But some buyers will want to hurry it up, before anything else happens.

Yellen made it sound like the next Fed move is imminent, which hopefully means next month.  There is 1/4% (or more) already baked into the market, so if they do bump the Fed Funds rate, it should have a calming effect on mortgage rates – it did last time.  If we can stay around the current 4%, it should motivate people to buy before it goes higher.

But there is also the anxiety that comes with buying or selling that gets aggravated by uncertainty.  Have you ever felt more desire to hunker down??  The motivated buyers and sellers want to get it done.

I think we will see a very active selling season – and it already is!

NSDCC October Sales and Pricing

Year
# of Detached-Home Sales
Median Sales Price
Average Cost-per-SF
2012
297
$825,000
$388/sf
2013
266
$957,500
$495/sf
2014
244
$978,754
$467/sf
2015
216
$1,076,000
$473/sf
2016
263
$1,100,000
$532/sf

Our current momentum should carry us well into 2017. But look at the stumble in 2014 – I’m more worried about 2018.

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Posted by on Nov 17, 2016 in Jim's Take on the Market, Market Conditions, North County Coastal, Sales and Price Check, Thinking of Buying?, Thinking of Selling? | 3 comments

Happy November!

nov

It would be natural to assume that sales start dropping off once we get into November.  But do they?

Not really.

November has the most holidays of the year (three) when the county recorder’s office is closed.  Let’s compare the number of NSDCC closings per business day:

Year
October Closings Per Day
November Closings Per Day
2012
12.9
12.7
2013
11.6
10.4
2014
10.6
10.1
2015
9.8
10.7
2016
11.3
???

You can see that November usually keeps up with October as far as number of closings per day – and November exceeded October sales per day last year!

In spite of the election, we are coming off a hot October.

Last month’s 11.3 is based on this morning’s count.  There will be late-reporters that will drive the number close to 12 – like it was during the 2012 election, which was also the beginning of the Real Estate Frenzy of 2013.

I don’t think we are heading for a frenzy next year, but with rates up slightly, it looks like this month is going to be sizzling!  There are 398 pendings today!

Posted by on Nov 1, 2016 in Frenzy, Jim's Take on the Market, Market Buzz, Sales and Price Check | 0 comments

Value Range Pricing

2016-10-30-18-12-51

I have a new listing this week that we decided to put on range pricing for two reasons; A) we’re not doing all the repairs needed, and B) if you only have one price, buyers will want to deduct for repairs, even if the repairs are already priced in.

Of the 495 NSDCC houses that have sold over the last sixty days, 127 of them (27%) were on range pricing.  Here is how they did:

Sold ABOVE the top of the range: 7

Sold at the top of the range: 5

Sold at the bottom of the range: 8

Sold UNDER the bottom of the range: 70

Going with range-pricing is a gamble that I don’t think sellers or listing agents recognize – over the last two months, most NSDCC houses (55%) listed on the range sold for UNDER the bottom price, which had to be a disappointment.  It wasn’t just the high-enders either – it was across the board.

It leaves us with a couple of questions:

  1.  Is pricing so inaccurate that the bottom of the range is too high?
  2.  Do buyers look at the bottom price and go down from there?

I have never seen a buyer jump for joy over range pricing.

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Posted by on Oct 31, 2016 in Jim's Take on the Market, Sales and Price Check | 0 comments

Inventory and Sales Balance

Yesterday I mentioned the idea of slightly more inventory could lead to more sales and faster-rising prices – but too much could freeze up the demand.

Is there history upon which we can reflect?

We know that the local market in 2013 reached full-blown red-hot frenzy level. Inventory for the first nine months rose 12%, and sales rose 10% – and pricing went ballistic.  We probably won’t see it that hot again.

NSDCC Listings and Sales, First Nine Months (Jan-Sept.)

Year
Number of Listings
Median LP
Number of Sales
Median SP
L/S Ratio
2011
4,308
$949,000
1,980
$835,206
2.18
2012
3,655
$975,000
2,322
$825,000
1.57
2013
4,091
$1,159,000
2,554
$945,000
1.60
2014
3,930
$1,249,700
2,183
$1,028,564
1.80
2015
4,068
$1,295,000
2,362
$1,090,000
1.72
2016
4,187
$1,399,000
2,272
$1,170,000
1.84

But consider the 2014-2015 differences.

The inventory went up 4%, and sales went up 8%!  But there wasn’t much increase in list pricing (under 4%), which probably helped to soothe the buyer anxiety, and keep things moving.  The median sales price did rise 6%!

How about this year?

Another 3% increase in inventory, but a 4% decline in sales.  But look at the increase in the median pricing – an 8% rise in the median list price and 7% increase in the median sales price, with both at all-time record highs.

There is a fine balance between sales and price, but I think if sellers can keep their pricing enthusiasm in check, the party will keep rolling!  Can we all live with appreciation around 0.5% per month, where it has been for the last three years, and expect that it could be a little less as prices enter the stratosphere?

party

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Posted by on Oct 14, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

Ideal Market Conditions

act

Rich has posted his September report here:

http://piggington.com/september_2016_housing_data

It is remarkable how similar this year’s inventory has been to last year’s – and the trajectory is virtually identical as well.

Sales have been strong too, in spite of the higher pricing:

sales

Judging by those graphs, market conditions are ideal – could it get any better?

I think so!  If we had about 10% more inventory, the demand would soak it up and probably cause prices to go up faster too.  I say 10% because it wouldn’t be that noticeable – if there was a 20% or more increase in inventory, buyers would most likely adopt a wait-and-see attitude because historically, we are overdue for a correction.  But it’s been different this time – higher prices haven’t brought more sellers to market.

Rich is also back at the Voice of San Diego!

http://www.voiceofsandiego.org/topics/news/san-diego-housing-expensiveness/

Posted by on Oct 13, 2016 in Jim's Take on the Market, Market Conditions, Sales and Price Check | 0 comments

NSDCC September Sales and Pricing

Image result for september

At the beginning of September, I said that the local market felt hot enough that we could pass the August numbers.

Last month had two fewer business days than August, but even if you factor that in, we didn’t quite make it – but with that surge of new pendings we should see plenty of sales closing over the next 30-60 days.

NSDCC Detached-Home Sales

Year
Number of Sales
Median Sales Price
Avg Cost-Per-SF
Avg. DOM
Sept. 2012
289
$780,000
$373/sf
70
Sept. 2013
263
$1,110,000
$470/sf
52
Sept. 2014
236
$1,091,000
$480/sf
49
Sept. 2015
247
$1,070,000
$475/sf
49
Aug. 2016
279
$1,199,000
$488/sf
47
Sept. 2016
241
$1,180,000
$514/sf
46

Going into the election of 2012, our local market exploded – but prices were relatively cheap then. Could we see another surge during this election cycle?

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