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Category Archive: ‘Sales and Price Check’

July Sales & Prices

Thanks to the folks who sent in the Property Radar press release yesterday regarding the July sales in California.  They mentioned that median prices fell in 13 of the state’s largest 26 counties:

https://www.propertyradar.com/reports/real-property-report-california-july-2014

But they didn’t say which counties!

According to our MLS, the median price of July detached-home sales in San Diego County rose 8% year-over-year, from $480,000 to $517,750 – though sales declined 19%.

Both sales and the median price in SD County look like they are topping out:

Month
# of Sales
Median SP
July 2013
2,402
$480,000
Apr 2014
2,126
$487,500
May 2014
2,161
$495,000
Jun 2014
2,116
$522,000
July 2014
1,942
$517,750

Are you thinking of selling and are worried you missed the prime market? It could get more sluggish next year – sell when everyone else isn’t!

Posted by on Aug 21, 2014 in Jim's Take on the Market, Sales and Price Check | 2 comments

Sales Effectiveness

When comparing active listings to pendings, we have called a 2:1 ratio ‘normal’.  It goes the same for total listings-to-solds; only half the listings sell in a normal market (which can be an abrupt lesson for sellers to realize that there’s a 50% chance of failure).

This isn’t a perfect measure below because it’s comparing the total listings taken in the same period as the sales closed (between Jan. 1 and July 31) but the sales include some listings from the previous period.  But to be able to gauge this year’s performance, it’s close enough – we’re comparing the ratios.

When the percentage gets around 60%, it’s frenzy time.

NSDCC Detached-homes Sold between January 1st and July 31st, and the Total Listings taken between January 1st and July 31st:

Year
Listings Sold
Listings Taken
Ratio of Solds/Total
2000
1,936
3,203
60%
2001
1,714
3,878
44%
2002
2,252
3,811
59%
2003
2,201
3,590
61%
2004
2,107
3,438
61%
2005
1,829
3,445
53%
2006
1,593
4,081
39%
2007
1,642
3,582
46%
2008
1,238
3,464
36%
2009
1,136
3,339
34%
2010
1,455
3,474
36%
2011
1,512
3,510
43%
2012
1,735
2,950
59%
2013
1,967
3,268
60%
2014
1,686
3,170
53%

We’ve had 14% fewer sales YoY, offset somewhat by 3% fewer listings.

For now, the market appears to be in good health – though our 53% is the same as it was in 2005. Note how the number of total listings tightened in 2003-2005, then popped loose in 2006 – will that happen next year?

Jumbo mortgage rates are in record territory, which should help keep the market alive the rest of the year:

Mortgage rates Aug 15

Posted by on Aug 16, 2014 in Inventory, Jim's Take on the Market, Sales and Price Check | 7 comments

More on July Sales

San Diego

Hat tip to Dennis for the cnbc.com report on July home sales in San Diego:

http://www.cnbc.com/id/101919762

Their report references the DQ report from Wednesday:

2014 July sales

Downer Diana noted that last month’s total was a three-year low, but didn’t mention that the frenzy started in the second half of 2012. As long as we are comparing to frenzy months, the 2014 totals will be lower – no frenzy now.

Let’s consider how last month’s sales of San Diego detached homes compare to previous years:

Year
# of SD Detached-Home Sales in July
2000
1,958
2001
2,291
2002
2,364
2003
2,871
2004
2,603
2005
2,338
2006
1,644
2007
1,470
2008
1,979
2009
2,170
2010
1,777
2011
1,900
2012
2,211
2013
2,402
2014
1,905

The July, 2014 sales look pretty good, given how high prices are now, and how fast they rose. Higher mortgage rates helped to cool off the frenzy too.

As a community, we should prefer a non-frenzy environment.

But the media insists that something is wrong. Diana said, “California is often seen as a barometer for the rest of the nation’s housing market. If that is the case, then housing this fall is not looking good.”

It looks good to me!

We know that when sales start declining, prices usually follow. But Rob Dawg noted this benefit here – payments are still cheaper than before:

The typical monthly mortgage payment Southland buyers committed themselves to paying last month was $1,602, down from a revised $1,616 the month before and up from $1,537 a year earlier.

Adjusted for inflation, last month’s typical payment was 34.4 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was 46.3 percent below the current cycle’s peak in July 2007.

http://www.dqnews.com/Articles/2014/News/California/Southern-CA/RRSCA140813.aspx

In some areas we will probably see a few homes sell for less – neighborhoods where long-time owners have loads of equity and can still make out nicely at 5% to 10% under comps. But with so little pressure, it’s more likely that sellers will cancel and wait until next year, rather than dump on price.

Sales will probably keep dropping with the only folks selling are those who deserve a premium price – the turnkey homes in good locations – which in turn will slow any price declines.

Posted by on Aug 15, 2014 in Jim's Take on the Market, Market Conditions, Sales and Price Check | 2 comments

Slowing Sales

We are still getting reports that year-over-year sales are declining, and that means something is wrong or bad.  Below they are comparing the counts to last year’s frenzy numbers and are crying wolf.  But what do you expect when the frenzy is over?

Our local stats look great – this year NSDCC has about the same number of July sales as we did two years ago, when prices were 20% lower (some late-reporters still coming too).

NSDCC Sales, July
# of Det. Home Sales
Median Sales Price
2001
291
$575,000
2002
347
$640,000
2003
430
$745,000
2004
351
$975,000
2005
281
$1,045,000
2006
220
$1,006,000
2007
255
$1,050,000
2008
222
$898,000
2009
237
$800,250
2010
223
$833,000
2011
231
$825,000
2012
258
$850,000
2013
297
$930,000
2014
250
$1,017,500

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

From the U-T:

http://www.utsandiego.com/news/2014/aug/03/housing-market-flashes-caution/

Persistent sales slowdown keeps the local recovery fragile, raising odds of relapse

A time-tested signal of weakness in the housing market is flashing yellow.

When you compare the number of home sales (which are highly seasonal) with those from the same month a year earlier, this key measure has declined in San Diego County for nine consecutive months through June — with five at double-digit rates.

Statewide trends are similar, with 11 straight months of year-over-year sales declines, according to the latest figures from DataQuick, a company that tracks transactions reported to county governments.

“My sellers are in complete shock. We’re getting no calls, no inquiries. It’s like the market just went away,” said Kimberly Dotseth, a San Diego real estate broker. “Buyers think prices are too high.”

An exception is the lower-priced segment of the market, where homes listed for $400,000 or less are still receiving multiple offers and quick sales. This supports the view that high price might be a primary factor discouraging many sales, rather than other factors such as tough lending standards or too few homes on the market.

In the history of housing markets, downturns typically have begun with sales weakness that sometimes ended up forcing down prices, but not always.

This holds back the wider economy, even if home prices don’t fall in the near future — as they have twice since 2006. That’s because low sales activity reduces a giant source of spending for remodeling, decorating and new construction.

Given the trauma of the last decade, the condition of the local housing market is a serious subject.

Read the full article here:

http://www.utsandiego.com/news/2014/aug/03/housing-market-flashes-caution/

Posted by on Aug 5, 2014 in Jim's Take on the Market, Market Conditions, North County Coastal, Sales and Price Check | 2 comments

New Peak

The North SD County Coastal region (Carlsbad to La Jolla) has 1,091 houses for sale currently – and 78% of them are listed over $1,000,000.  If you take Carlsbad out of the mix, then 90% of the homes for sale are listed over $1,000,000!

How do the 2014 sales compare?

graph (46)

Though the median sales price is at a new peak, sales remain strong. In spite of this year’s median SP being 20% higher, sales were 10% higher than in 1H11.

Here are the first-half (Jan-June) sales for each year:

Jan-Jun
# of Sales
Median SP
Avg DOM
# New Listings – 1H
2001
1,423
$570,000
52
3,297
2002
1,905
$619,562
159
3,171
2003
1,771
$690,000
61
3,063
2004
1,752
$935,500
47
2,920
2005
1,548
$975,000
58
2,891
2006
1,373
$990,450
65
3,547
2007
1,387
$1,000,000
71
3,119
2008
1,016
$936,250
76
3,009
2009
899
$795,000
78
2,877
2010
1,232
$825,000
75
2,966
2011
1,281
$845,000
84
3,046
2012
1,477
$815,000
86
2,545
2013
1,670
$919,950
51
2,790
2014
1,412
$1,014,000
50
2,700

The number of listings isn’t directly related to the number of sales, but is a great indicator. Look at how the number of new listings was declining until 2006, then as sellers sensed a peak, the inventory exploded. As long as new listings stay in check, buyers will probably stay in the hunt.

Posted by on Jul 15, 2014 in Jim's Take on the Market, Sales and Price Check | 0 comments

NSDCC Sales, June 2014

2014-06-24 13.01.41

The national media keeps questioning the strength of the housing market, but locally the sales and pricing couldn’t be much better – at least for sellers.

This is the early count – when the late-reporters are complete, the number of June sales should be close to what they were at the peak frenzy last year:

NSDCC Detached-Home Sales, June

Year
# of Sales
Median SP
Avg. $/sf
Avg. DOM
2010
257
$820,000
$384/sf
69
2011
251
$838,000
$373/sf
80
2012
339
$867,500
$368/sf
76
2013
333
$1,025,000
$453/sf
46
2014
297
$1,052,000
$482/sf
43

We are overdue for a cooling off period – will sales and pricing start to drift off?  Or will there be enough motivated sellers keeping their prices attractive that the market plows right through?

As long as rates stay around 4%, this could keep going!

Posted by on Jul 2, 2014 in Jim's Take on the Market, Sales and Price Check | 3 comments

Market Bifurcation

la jolla sunset1

The homes in the north coastal region from La Jolla to Carlsbad have always been relatively expensive.

Of the 1,052 houses for sale today, 81% of them are priced over $1,000,000.

(Take Carlsbad out, and 92% are priced over $1,000,000).

But only 51% of the 1,233 NSDCC house sales closed this year have been $1M+.

It gives us about a 7.5-month supply of homes for sale priced OVER $1,000,000, and a 1.8-month supply of homes priced UNDER $1,000,000.

Whether you are buying or selling, get good help!

Posted by on Jun 18, 2014 in North County Coastal, Sales and Price Check | 2 comments

Frenzy Addicts

Now the red team is drinking the ivory tower kool-aid too.

Here is their latest post, with the secondary headline that reads - Recovery Fueled by Investors is Stalled Until Traditional Homebuyers Step Up:

http://www.redfin.com/research/reports/real-time-price-tracker/2014/price-tracker-may-2014.html

They call this ”the most disappointing metric of the month”:

redteam disappointed

Maybe it’s because I’m such an optimist, but I am happy to see sales this high – heck, with the rapid rise in prices, sales could be a lot worse.

Buyers are being misled to think it is disappointing to not be at frenzy levels.

This year our local sales around the San Diego north county coastal region have been in line with 2010/2011 levels, which should be good enough, considering how much higher prices are:

graph (44)

We know that sales are the precursor to the market’s direction, and as long as they stay relatively stable and similar to previous years, pricing might hold.

But the average pricing has been a bit erratic so far in 2014:

graph (45)

Buyers who read the mass media are starting to believe the market is ‘disappointing’, when really it’s been terrific for a post-frenzy period.  In most areas, we are at record prices and sales are holding up!

Posted by on Jun 13, 2014 in Jim's Take on the Market, Sales and Price Check | 3 comments

SD County Sales & Pricing

may

Two things you don’t hear when ‘analysts’ are describing 2014 home sales:

1. We are comparing Y-o-Y numbers to one of the hottest frenzies of all-time.

2. Sales are down because sellers are asking too much.

Instead, we get this explanation below: We have higher inventory, but supply falls short of demand so we have lower sales. (?)

From DQ:

http://www.dqnews.com/Articles/2014/News/California/Southern-CA/RRSCA140611.aspx

La Jolla, CA—Southern California home sales lost momentum in May, falling from both April and a year earlier as investor demand fell and buyers continued to face inventory, affordability and credit constraints. Prices climbed again but at roughly half the year-ago pace, a real estate information service reported.

A total of 19,556 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 2.3 percent from 20,008 sales in April, and down 15.1 percent from 23,034 sales in May last year, according to San Diego-based DataQuick.

On average, sales have increased 5.8 percent between April and May since 1988, when DataQuick’s statistics begin. Sales have fallen on a year-over-year basis for eight consecutive months. May sales have ranged from a low of 16,917 in May 2008 to a high of 35,557 in May 2005. Last month’s sales were 23.0 percent below the May average of 25,393 sales.

“We expected rising prices to unlock more inventory this spring and that’s happened. But the supply of homes for sale still falls short of demand in many markets, contributing to a rise in prices and a below-average sales pace. The drop in affordability has also hampered activity, helping to explain how sales could be lower now even though today’s inventory is higher than a year ago. The recent dip in mortgage rates will help fuel demand, adding pressure to home prices. But the sort of price spikes we saw this time last year – annual gains of 20 percent or more – are less likely today given affordability constraints, higher inventory and the drop-off in investor purchases,” said Andrew LePage, a DataQuick analyst.

Posted by on Jun 12, 2014 in Jim's Take on the Market, Sales and Price Check | 10 comments