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Category Archive: ‘Sales and Price Check’

San Diego Undervalued

The crew over at CL came out with their year-end report today, which included their forecast for 2016.  They consider the San Diego-Carlsbad metro area to be undervalued…..just like San Francisco and Boston(?). They also expect that prices in our area will rise 7.8% in 2016, after going up 6.7% last year:

core1

From MND:

http://www.mortgagenewsdaily.com/02022016_corelogic_hpi.asp

Once again a report on home price changes indicates that appreciation has not yet slowed.  CoreLogic issued a report on its Home Price Index for December of Tuesday which indicates a pick-up in monthly increases.

The index shows prices nationwide, including distressed sales, rose 0.8 percent from November to December compared to a 0.5 percent change from October to November. On an annual basis there was a 6.3 percent gain, the same as the November 2014 to November 2015 pace.

“Nationally, home prices have been rising at a 5 to 6 percent annual rate for more than a year,” said Dr. Frank Nothaft, chief economist for CoreLogic. “However, local-market growth can vary substantially from that. Some metropolitan areas have had double-digit appreciation, such as Denver and Naples, Florida, while others have had price declines, like New Orleans and Rochester, New York.”

Posted by on Feb 2, 2016 in Forecasts, Jim's Take on the Market, Sales and Price Check | 1 comment

NSDCC 2016 New Listings

box

How are we getting out of the box in 2016?

The listings count is on the rise, combined with a relentless push on prices!

Buyers look like they want to go in the other direction, price-wise, but the 93 solds is a great sign that sellers and buyers are finding a way to come together!

It should be an exciting spring!

Year
New Listings, Jan 1-15
Median LP
Solds, Jan 1-15
Median SP
2011
256
$1,027,500
68
$905,000
2012
207
$929,000
69
$770,000
2013
207
$1,099,000
80
$827,495
2014
193
$1,385,000
84
$1,150,00
2015
199
$1,365,000
80
$1,211,690
2016
219
$1,500,000
93
$1,100,000

Posted by on Jan 22, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

NSDCC Annual Sales/MSP

la jolla 030

The 2015 annual sales and median SPs looked pretty good – we know that declining sales are the precursor of a downturn, but only Carmel Valley has a noticeable drop.

There are more new homes for sale than ever in Carmel Valley, and those aren’t all reported as closed sales on the MLS.  They have to be soaking up some of the demand for resales:

Annual Number of Sales/Median Sales Price

Town or Area
Zip Code
2013
2014
2015
Cardiff
92007
88/$961,250
80/$1,180,000
83/$1,200,000
Carlsbad NW
92008
211/$680,000
213/$740,000
196/$767,777
Carlsbad SE
92009
586/$782,125
525/$825,000
576/$875,000
Carlsbad NE
92010
144/$596,000
132/$650,000
161/$662,000
Carlsbad SW
92011
261/$789,900
209/$850,000
240/$887,500
Carmel Vly
92130
515/$1,015,000
470/$1,090,000
452/$1,150,000
Del Mar
92014
188/$1,495,645
193/$1,625,000
161/$1,680,000
Encinitas
92024
466/$870,000
405/$955,000
462/$1,082,500
La Jolla
92037
365/$1,598,000
321/$1,640,000
372/$1,807,500
RSF
92067
240/$2,300,000
181/$2,476,596
196/$2,500,000
Solana Bch
92075
114/$1,100,000
82/$1,326,000
87/$1,440,000
All NSDCC
All
3,218/$952,250
2,849/$1,025,000
3,017/$1,095,000

The reason I think we’ll have fewer sales in 2016 is because 2015 was so dang good – it will be hard to keep up!

Posted by on Jan 14, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 2 comments

San Diego Is Hot

seattle

Zillow came out with their Hottest Housing Markets of 2016, and San Diego didn’t make the list:

http://www.zillow.com/blog/hottest-markets-2016-190331/

They based their ‘hotness’ on a combination of employment, recent income growth, and the expected increase in the Zillow Home Value Index.

They expect that the San Diego HVI will rise 2.7% this year, and I think our employment and income numbers should at least be steady:

sdzhvi

Zillow isn’t considering retirees into their algorithms – especially the rich folks who want great weather to live out their life.  Any of them who have grandkids in the Southwest will give us a look, and when they compare to Los Angeles or the Bay Area, they will like our prices much better.

The towns in the Zillow Top Ten have expected HVI increases of 4% to 5%.

At the end of 2016, let’s see how San Diego compared to their list of ten.  I say that we beat at least half of them – in spite of fewer sales than we had in 2015.

Posted by on Jan 13, 2016 in Forecasts, Jim's Take on the Market, Local Flavor, Market Conditions, Sales and Price Check | 3 comments

NSDCC 4th Qtr. Sales & Pricing

The fourth quarter of 2015 didn’t show any surprises – sales and pricing are rumbling along.  Del Mar had a statistical pricing slump, but if you look at the median cost-per-sf ($601/sf, $627/sf, $617/sf), it helps to smooth out the bumps in a super-custom area:

Number of Sales/Avg Cost-per-SF

Town or Area
Zip Code
2013
2014
2015
Cardiff
92007
24/$627
24/$563
23/$650
Carlsbad NW
92008
56/$375
62/$402
48/$450
Carlsbad SE
92009
109/$307
122/$316
112/$326
Carlsbad NE
92010
32/$297
29/$294
39/$341
Carlsbad SW
92011
44/$342
43/$346
47/$362
Carmel Vly
92130
91/$381
103/$397
100/$417
Del Mar
92014
39/$922
43/$846
35/$772
Encinitas
92024
87/$488
95/$494
86/$458
La Jolla
92037
95/$760
73/$705
92/$789
RSF
92067
53/$475
42/$501
45/$457
Solana Bch
92075
27/$513
22/$791
14/$635

Statistically, these markets look fine.

Posted by on Jan 8, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 1 comment

NSDCC Sales in 2016

ratess

There will still be late-reporters, but let’s review the annual NSDCC sales.

Year
NSDCC Annual Sales
Median Sales Price
2012
3,154
$830,000
2013
3,218
$952,250
2014
2,849
$1,025,000
2015
3,011
$1,095,000

What can we expect for sales this year?

Rates have dropped back under 4% this week, which will help.  But sellers will be expecting higher prices in 2016, which will dampen the buyers’ enthusiasm.

My guess for 2016?

Rates at or below 4% = 5% fewer sales.

Rates above 4% = 10% fewer sales.

If rates get into the mid-4s, then my guess is for 25% fewer sales.

The lack of quality inventory will contribute greatly too.  Buyers don’t mind paying a little more if they get something extra for it.

But we need to become accustomed to a regurgitated inventory.

It’s likely that we will continue to see sellers try to get their inflated price year after year, rather than lowering the price until it sells.  Of the 88 new NSDCC listings this year, 61% of them were on the market in 4Q15.  It is a higher-end phenomena too – virtually all listings over $2,000,000 were refreshed.

Posted by on Jan 7, 2016 in Forecasts, Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

2015 Wrap Up

CSISD

This year will be over in hours!

How did we do?

The San Diego Case-Shiller Index is 6.2% higher than it was 12 months ago (October to October readings), which beats just about everyone’s expectations.

But the tony north-coastal region (La Jolla to Carlsbad) had already experienced healthy price gains since 2012.  At the beginning of 2015, lower mortgage rates (3.5% to 3.75%) fueled a surge of sales at higher pricing, but then things mellowed out the rest of the year – just like Rob Dawg predicted!

graph(1)

graph(2)

If it weren’t for the blip in November, it would be clear that the first quarter of 2015 was the best time to sell, price-wise.  If we do get more inventory this year, the same will probably be true – more houses for sale combined with higher mortgage rates = more of a buyer’s market.

Posted by on Dec 31, 2015 in Forecasts, Jim's Take on the Market, North County Coastal, Sales and Price Check | 4 comments

When to Sell Your Home in 2016

Want to guess when the best time will be to sell your house in 2016?

Let’s reflect on recent history.

The Big Frenzy of 2013 was super-charged by mortgage rates dropping into the low-3s during 4Q12.  The low point for the 30Y conforming rate was 3.31% during the week of Thanksgiving.

It skewed the sales history of early 2013 higher, but then rates started rising which tempered the market.  By the time we got into 2014, rates had to decline most of the year just to keep the market afloat.  Those two histories are unlikely to be duplicated in 2016.

rates history

Rates were back into the 3s by the end of 2014, which helped 2015 get off to a good start – and now rates have muddled through the rest of this year.

Because of the highly-publicized Fed hike this month, home buyers have to be thinking that it’s time to buy – before rates go higher.  The Fed has threatened to raise rates throughout 2016, which should cause buyers to be very active early on.

As a result, let’s compare our 2016 market expectations to 2015 – the recent sales history that will be most-likely to repeat.

These are the weekly counts of NSDCC detached-homes that have closed escrow, based on when they were marked pending.  Starting in mid-October, I included the listings that are currently marked pending too, figuring that they have released their contingencies and should be closing soon.

graph

Once the Super Bowl is over, the motivated buyers really get busy.  You can see that February, 2015 was one of the best months of the year to find a buyer.

This year is wrapping up nicely, with the 4Q15 action being better than 3Q15.  It should provide a solid foundation for early 2016.

Let’s consider the difference between wanting to sell, and having to sell.

If you really needed to sell, you probably got it done in 2014 or 2015.  Prices were hitting all-time highs, and the motivated sellers weren’t going to wait around any longer.

The 2016 sellers are more likely to be the lesser-motivated, “if-I-get-my-price” sellers.  It will be irresistible for them to tack on that extra 5% to 10%, just in case, and by the end of spring we could see the OPTs stacking up.  I thought it might happen like that in 2015, but it didn’t so who knows. But one of these years the buyers will have had enough.

Sell before that happens!

Posted by on Dec 27, 2015 in Jim's Take on the Market, North County Coastal, Sales and Price Check, Spring Kick | 0 comments

Existing Home Sales

ehs

The talking heads are wondering if the 10.5% month-over-month drop in existing home sales is related to the new TRID mortgage regulations.  Those with a national voice are usually quick to blame everything but prices for any glitch in the statistics.  The M-o-M decline is normal (see above) due to the holiday season, and because there are two fewer business days in November.

It would serve the real estate consumer well if there was more focus on how prices affect sales – and that price will fix everything!  Let’s hand it to Yunnie for including that ‘the steep rise in prices’ could be the cause too!

NAR economist Lawrence Yun said most of November’s decline was likely due to regulations that came into effect in October aimed at simplifying paperwork for home purchasing. Yun said it appeared lenders and closing companies were being cautious about using the new mandated paperwork.

Also potentially weighing on home sales, the median price for a U.S. existing home rose to $220,300 in November, up 6.3 percent from the same month in 2014.  Yun said the steep rise in prices and shrinking inventories could also be constraining home purchases.

How did we do around North San Diego County’s coastal region?

Typically we have a drop in sales from October to November, but this year we fared well, compared to the last two years:

Year
October Sales
November Sales
Diff
2013
266
187
-30%
2014
244
172
-30%
2015
215
187
-13%

December is usually a good month too, and we’ve already closed 156 sales – last year’s count was 250, and the year before we had 211 December sales.

The market will be great, as long as sellers adjust their sails to the wind.

Posted by on Dec 22, 2015 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

Higher Rates and Home Prices

sdpricetrends

The impact on mortgage rates from yesterday’s Fed move was priced in already, and it’s doubtful we will see any short-term change in our local real estate market conditions.

But the Fed also indicated that they intend to ‘gradually’ raise their target range for the Fed-funds rate.  At what point will buyers start to react?  How will they react?

The general statistics for San Diego have been greatly enhanced by the lower-end being red hot.  Look at the difference between the blue and green lines in the pricing chart above – the 2015 pricing velocity in the Low Tier has been much greater than with the High Tier, and it’s the lower end that will be more affected by rising rates.

We saw how mortgage rates in the 3s this year helped to turbo-charge the lower end, giving us the illusion that the overall market benefited – see below:

SDyoy

From firsttuesday.com:

The price of low-tier housing in San Diego County skyrocketed after the latter half of 2012, peaking in Q3 2014 and leveling off after. 2015 has experienced another price increase. This is likely due to the boost given by decreased mortgage rates throughout 2015.

Lower mortgage rates free up more of a buyer’s monthly mortgage payment to put towards a bigger principal. Thus, San Diego’s high home prices continue to find fuel — not from speculators as in 2012-2014 — but from increased buyer purchasing power.

Expect home sales volume to fall off after mortgage rates begin to rise in the second half of 2016. Prices will descend 9-12 months later, by the second half of 2017.

I think we will see declining sales next year as sellers try to push higher, and buyers resist.  Lower-end buyers will be stymied by higher rates, and buyers on the higher end will be overwhelmed by the bulging inventory – there were 85 houses sold over $1,500,000 last month, and there are 870 for sale in San Diego County!

Prices?  It will take a long stretch of stagnant before all sellers believe they need to lighten up.

If we saw price declines in the general stats by the end of next year or 2017, to what point will they be coming back?  To 2015 prices?  To 2014 prices? Neither would change the overall market much – houses will still be expensive.

Posted by on Dec 17, 2015 in Forecasts, Inventory, Jim's Take on the Market, Sales and Price Check | 0 comments