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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Jim Klinge
Cell/Text: (858) 997-3801
klingerealty@gmail.com
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011


Category Archive: ‘Sales and Price Check’

Growing Inventory

For those looking for our jumping-the-shark moment, this might be it.

Inventory is growing, and there is only one reason: More prices are wrong.

But when you sell your best asset down the river and let amateurs run it who are out of touch with reality, you get explanations like this:

The number of homes for sale in the country is starting to flatten, which realtor.com® researchers say is signaling a “crucial inflection point for the inventory crisis.” Inventory has decreased slightly by 0.2 percent from a year ago, but is poised for an increase in the months ahead due to an 8 percent increase in new listings. This marks the largest annual jump since 2013, according to a new report from realtor.com®.

“After years of record-breaking inventory declines, September’s almost-flat inventory signals a big change in the real estate market,” says Danielle Hale, chief economist for realtor.com®. “Would-be buyers who had been waiting for a bigger selection of homes for sale may finally see more listings materialize. But don’t expect the level to jump dramatically. Plenty of buyers in the market are scooping up homes as soon as they’re listed, which will keep national increases relatively small for the time being.”

She gives the impression that more homes for sale will be satisfied by pent-up demand – that we shouldn’t “expect the level to jump dramatically”, because the new inventory will get scooped up.

If you ask me, +34% and +24% is dramatic!

Inventory is up because buyers are waiting for a bigger selection of affordable and better-priced homes for sale.  Any time the inventory grows, it is due to overly-optimistic pricing.

Posted by on Oct 6, 2018 in Inventory, Jim's Take on the Market, Market Conditions, Sales and Price Check | 21 comments

Local Home Sales, YTD

The California Association of Realtors predicted that statewide sales in 2018 would increase 1%, and the California median sales price would rise 4.2%.

My guess was for the San Diego County detached-home sales to drop 5%, and the median sales price to rise 5% in 2018. How are we doing?

Here are the detached-home sales and median price for the first nine months of the year in San Diego County:

SD County Detached-Home Sales, January through September

Year
Number of Sales
YoY Change
Median SP
YoY Change
2012
18,648
$375,000
2013
19,385
+4%
$450,804
+20%
2014
16,858
-13%
$497,250
+10%
2015
18,389
+9%
$527,000
+6%
2016
18,192
-1%
$555,000
+5%
2017
18,068
-1%
$600,000
+8%
2018
16,413
-9%
$641,000
+7%

It may seem like the sky is falling, but we should just appreciate how great we’ve had it over the last few years, and accept that we’re going to have fewer sales from now on. Here are the stats for La Jolla-to-Carlsbad:

NSDCC Detached-Home Sales, January through September

Year
Number of Sales
YoY Change
Median SP
YoY Change
2012
2,322
$825,000
2013
2,554
+10%
$945,000
+15%
2014
2,183
-15%
$1,028,564
+9%
2015
2,405
+10%
$1,085,000
+6%
2016
2,345
-2%
$1,165,000
+7%
2017
2,385
+2%
$1,230,000
+6%
2018
2,161
-9%
$1,320,000
+7%

It’s going to be harder to sell your home.

Get Good Help!

Posted by on Oct 3, 2018 in Forecasts, Jim's Take on the Market, North County Coastal, Sales and Price Check | 2 comments

Usual Seasonal Change, or Panic Time?

Rob Dawg predicted it that any and all appreciation will happen in the first half of the year – and if we’re just talking about the general trends in local San Diego pricing, that’s how it has been lately.

As the red circles show in the graph above, the non-seasonally-adjusted SD Case-Shiller Index has a history of cooling off in the second half of the year.

Will the same seasonal event happen again in 2018?

Most likely – our June and July index numbers were the same this year, so it’s likely to stay flat, or even soften a bit like last year.  But were talking fractions, not big chunks.

The number of sales are another thing, however.  Few sellers NEED to sell, so while buyers might offer less, it takes two to tango.

The CNBC article that tried to paint a negative slant on the New York market included this quote:

“Offers 20 percent and 25 percent below asking prices began to flow in, a phenomenon last seen in 2009,” wrote Warburg Realty founder and CEO Frederick W. Peters”.

While few sellers struck deals at those radically reduced offer prices, they signal a major shift in our marketplace, one which has been building for at least 18 months,” Peters said.

Sellers aren’t going for it.

They might knock off a few points, but unless they are unusually desperate, they are going to sit on their presumed equity and wait until next year if they have to.  Sales would have to grind to a halt for sellers to think about dumping on price.

There will be just enough action to keep the sellers optimistic too.  Here are a set of homes that were marked pending today that could make you think everything is fine:

Another agent has this one, but you saw it here last time around:

This is in La Costa Valley, which has been starting to show it age when you’re talking about 20-year old Carlsbad tract houses now over a million. But this had the updated and appealing look, and the first buyer took it:

My friends in Olde Carlsbad went pending too:

I know they aren’t closed yet, and at least one of those will probably fall out.  My point?  The market isn’t dead, or even sleeping – it’s just finding its way.

Posted by on Oct 1, 2018 in Jim's Take on the Market, Sales and Price Check, Same-House Sales | 2 comments

One-Story Premium

Let’s look at the price on my new one-story listing.  After all, the 5,345sf house right up the street (that went pending the same day) was listed for the same.

At first glance:

$1,799,000/5,345 = $337/sf

$1,798,000/3,729 = $482/sf

(43% premium)

But we know that the cost-per-sf metric is one of the worst ways to compare the values of two homes.  We use it for measuring the change in the general trend, mostly because no other metric has been devised that is any better.

Why is it a bad measuring stick?

Because when you are only comparing house to house, the cost-per-sf bundles up all the many variables into one neat package to call it apples-to-apples.

But consider the many variables here that shouldn’t be bundled:

The 5,345sf two-story house appeals to younger people, probably to those with a few kids.  Even if you have 4+ people to occupy, you probably only need 4,000sf of it, and be lucky to get around to using 4,500sf.  It is a view home, but you only look over scrub brush – I’ll give you a little benefit of not having a neighbor behind, but that’s about it – and the fire danger should be considered.

While younger folks don’t mind a single level, the older crowd insists on them – and they won’t consider a two-story, which skews the supply-and-demand.

Let’s compare Carlsbad houses sold in the last six months over 2,500sf:

Product type
# of Sales
Cost-per-sf
Median SP
Median DOM
One-story
32
$509/sf
$1,337,500
8
Two-story+
303
$374/sf
$1,225,000
18

The average one-story premium in Carlsbad over the last six months has been 36% when you are comparing the general statistics.

If you insist on using the cost-per-sf metric, a more-accurate way to compare my price is to compare it to the general trend of other one-story sales:

My listing = $482/sf

Carlsbad one-story sales over 2,500sf, last six months: $509/sf

Heck, I’m giving it away!

If you are the type of buyer who will only buy a single-level home and need 2,500sf or more, you want to consider the rarity factor too. There has only been only five sales per month, and they’ve been popping off the market.  The median days-on-market is eight!

I was the one who put the price on my listing, based on the one-story premium. We will see if today’s market agrees!

Here’s my YouTube from last month that showed a few examples:

https://youtu.be/5Frb9P4t89I

Posted by on Sep 26, 2018 in Jim's Take on the Market, Sales and Price Check, Why You Should List With Jim | 1 comment

NSDCC August & Jan-Aug Sales

How did your area do last month, and for the first eight months of the year? It would be sufficient to just keep close to 2017, which was a good year for sales:

Town or Area
Zip Code
Aug17
Aug18
Jan-Aug17
Jan-Aug18
Cardiff
92007
7
8
49
39
NW Carlsbad
92008
23
20
147
143
SE Carlsbad
92009
45
47
390
324
NE Carlsbad
92010
10
14
109
117
SW Carlsbad
92011
28
24
189
142
Carmel Vly
92130
28
48
342
335
Del Mar
92014
20
4
105
108
Encinitas
92024
54
36
317
282
La Jolla
92037
18
24
207
227
RSF
92067
22
30
170
159
RSF
92091
11
5
28
21
Solana Bch
92075
13
13
73
63
NSDCC
All Above
279
273
2,126
1,960
Coronado
92118
22
11
124
115

Total NSDCC sales for the first eight months are down 8%, which isn’t the end of the world.  The median sales price is up, and the average cost-per-sf is down:

NSDCC median sales price, August, 2017: $1,245,000

NSDCC median sales price, August, 2018: $1,325,000

NSDCC average $$/sf, August, 2017: $549/sf

NSDCC average $$/sf, August, 2018: $534/sf

You would think that the high-dollar areas might be showing some struggle, but in August, both La Jolla and Rancho Santa Fe had great months.

In May, 2018, there were 13 sales in the 92067!

Posted by on Sep 16, 2018 in Jim's Take on the Market, North County Coastal, Rancho Santa Fe, Sales and Price Check | 1 comment

Pricing Plateau

Hat tip to Rob Dawg who sent in this example of what’s happening in most markets – lower-end prices are holding, and it’s softer in the higher-end markets.

But because the higher-end sellers typically have more horsepower, and aren’t going to ‘give it away’, prices could just stagnate, instead of dropping.

You could call it a levitating market too, and many will think that it’s just a matter of time before pricing turns south.

Here are reasons why prices are sustainable:

  • We have newer agents representing the buyers.  Even if they have nine years experience, they’ve never seen anything but a seller’s market.  If their buyers don’t like the price, they just pass on the house, instead of making a low offer.
  • Rarely is a seller motivated enough that they might consider a lowball offer. You’re lucky if you get a call back, let alone a counter-offer.
  • Agents are looking to provide less service, not more.  The trend is to capture the consumer’s contact info, send it to the call center, and have dialers hound them until they buy or die.

  • Buyers are so used to pressing a button to transact everything else that they don’t even know they need good help.  All buyers and newer agents know how to do is to find a decent house and process the order.
  • With traditional, discount, and disrupter agents all offering less expertise, the fixers stand virtually no chance of selling – they are too much of a turnoff to buyers who are essentially do-it-yourselfers.  It’s too easy to skip them.
  • If fixers aren’t selling, then just the good-to-excellent homes have a chance, and buyers are typically willing to pay close to list for those.
  • If there were a couple of sales in the neighborhood that were lower, the vast majority of potential sellers would quit, rather than panic. When their motivation is already suspect, it won’t take much for them to wait until some mystical time in the future when they can sell for that extra 5% to 10%.
  • Buyers who go straight to the listing agent are in effect, unrepresented, and will just end up paying retail.
  • Off-market properties would only sell if they get their price.
  • Sellers who can’t get their price can always rent for astronomical prices, and try again next year.

Combine those together and it’s easy to see how prices will stall, or could even drift upward with only the creampuffs selling.  The inventory counts won’t matter either, because if they grow, it will just mean a sea of OPTs lying around, nothing more.

With a healthy economy and no foreclosures, there isn’t any pressure on sellers to dump and run. Besides, where are they going to go in such a hurry?

It will be a binary market – buyers will say yes or no.  Pricing should stay about the same, but if buyers were to dig in, then sales could be affected.  Keep an eye on the sales count – they are the precursor, and they’ve been holding up nicely the last couple of months (at least between La Jolla and Carlsbad).

Posted by on Sep 9, 2018 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 1 comment

NSDCC August Sales

The NSDCC sales in May and June were down 20% YoY, but July and August bounced back nicely this year.  We had 11 more sales in July this year, compared to July, 2017, but there was one extra day in 2018.  How did we do in August (which had the same number of business days as last year)?

NSDCC Detached-Home Sales, August

Year
# of Sales
Avg. $$/sf
Median SP
Median DOM
2013
324
$437/sf
$953,750
21
2014
246
$500/sf
$1,050,000
26
2015
278
$470/sf
$1,030,000
19
2016
288
$487/sf
$1,199,500
25
2017
279
$549/sf
$1,245,000
25
2018
270
$536/sf
$1,325,000
25

It’s remarkable that we’re hanging this close to last year!

Posted by on Sep 6, 2018 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

NSDCC Sales, August First Half

We saw the NSDCC sales in May and June be 20% fewer than they were in 2017. We had 11 more sales in July this year, compared to July, 2017, but there was one extra day in 2018.

How are we doing so far in August? Can we just hang close to the mean this month, have a decent September, and cruise into the holidays?

NSDCC Detached-Home Sales, August 1-15

Year
# of Sales
Avg. $$/sf
Median SP
Median DOM
2014
133
$478/sf
$1,060,000
24
2015
133
$460/sf
$1,050,000
17
2016
115
$480/sf
$1,169,000
17
2017
138
$547/sf
$1,282,500
25
2018
125
$539/sf
$1,300,000
22

If sales stay within 10% of the previous year, we should be fine. We’re looking for disaster signs, not just the usual bouncing around (see previous years).

Posted by on Aug 24, 2018 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

San Diego Tiered Pricing

These are through May, and though all three are at new record levels, we should see the usual year-end leveling the rest of the way:

Posted by on Aug 10, 2018 in Jim's Take on the Market, Market Conditions, Sales and Price Check, Same-House Sales | 0 comments