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An Insider's Guide to North San Diego County's Coastal Real Estate
Jim Klinge, broker-associate
858-997-3801
klingerealty@gmail.com
Compass
617 Saxony Place, Suite 101
Encinitas, CA 92024
Klinge Realty
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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’

San Diego Tiered Pricing Graph

No surprise the trend shows the higher the price, the softer the price increases.

The lower-end market keeps humming along, while the higher-end market isn’t – and the connection between the two is getting fuzzier by the day.

With the struggle of moving up or down being very real, we could see more disconnect between markets.

Let’s keep this in mind when analyzing trends – it’s more complex than ever.

https://journal.firsttuesday.us/san-diego-housing-indicators-2/29246/

Posted by on Jan 17, 2019 in Jim's Take on the Market, Sales and Price Check, Same-House Sales | 2 comments

Real Estate Cycle

www.sacramentoappraisalblog.com

Ryan posted the history of real estate cycles in Sacramento County, so here are the same years for North San Diego County’s coastal region for comparison.  Human nature tends to flow in the same direction everywhere, and as a result, our history looks a little like his:

Year
Number of Sales
Median Sales Price, Annual
Change
1999
3,236
$475,000
+8%
2000
3,285
$555,000
+17%
2001
2,926
$570,000
+3%
2002
3,717
$630,000
+11%
2003
3,932
$732,500
+16%
2004
3,363
$948,000
+29%
2005
3,014
$1,000,000
+5%
2006
2,626
$985,000
-2%
2007
2,479
$1,000,000
+2%
2008
2,037
$890,000
-11%
2009
2,223
$817,000
-8%
2010
2,461
$830,000
+2%
2011
2,562
$825,000
-1%
2012
3,154
$830,000
+1%
2013
3,218
$952,250
+15%
2014
2,850
$1,025,000
+8%
2015
3,079
$1,090,000
+6%
2016
3,103
$1,160,000
+6%
2017
3,084
$1,225,000
+6%
2018
2,797
$1,325,000
+8%

At the time it seemed like sky was caving in, but looking back we only had two bad years (2008 and 2009) in the last twenty. There was some scuffling around as we found our way in 2006-2007, and 2010-2012, but given that our market had been injected with the most exotic financing ever known to man, and then tanked by foreclosures and short sales, I think we did pretty good to survive it as well as we did.

Now what?

With 90% of the NSDCC active listings priced over $1M, all we need is wealthy people to keep coming here to buy their forever home.  We’re still cheaper than the LA/OC and Bay Area, so we look attractive to downsizers.

Our pricing may bounce around, but without brainless bank clerks dumping properties for any price, who else is going to cause a collapse?  We could run low on the number of buyers – and if we did, all it would do is cause a protracted descent; re: soft landing over years.

Boomer liquidations?

Here’s a conversation I had yesterday with a guy who is 80+ years old and who has lived in his house since the 1960s:

Him: Convince me why I should sell my house.

Me: How are you getting around?

Him: I ride my bike to the store.

Me: Do you need the money?

Him: No.

Me: Have you ever dreamed about buying a house on the lake and fishing the rest of your life?

Him: No.

Me: Are you married?

Him: No.

Me: Did you know that if you did sell, you’d have to pay six-figures in taxes?  How would that make you feel?

Him: What?  I only paid $19,500! I’d never pay that much in taxes!

Me: What happens upon your demise?

Him: My daughter will inherit – she grew up here, and will likely move back in.  But I told her if she doesn’t move in, it’s ok with me to sell it.

Me: Do you have a family trust?

Him: Yes.

Me: Did you know that if she sells the house, she will pay no tax?

Him: You’re kidding? If I sell it, I have to pay the tax man six-figures, but if she sells it, she pays nothing?  Jim, I think we have the answer!

There will be occasional sales where sellers hire bad agents and get taken advantage of, but there won’t be an avalanche of desperate sellers dumping for any price.  It would take a tsunami, earthquake, or terrorist event at the border to cause a drastic shift in housing – which could happen!

Here’s the latest photo of the nuclear waste being stored right on the surf at San Onofre.  All we need is one crack in a storage cask…..

Without a catastrophic event, what’s the worst we can expect?

Maybe 5% drop in pricing in the short-term?

Any more than that, and sellers will just wait it out.

Posted by on Jan 11, 2019 in Boomer Liquidations, Boomers, Jim's Take on the Market, North County Coastal, Sales and Price Check, Slowdown | 6 comments

NSDCC December Sales

December sales were down 14% year-over-year, and 19% below the average of the last five years:

Year
# of Sales
Median SP
Avg. Cost-per-sf
Avg. DOM
S/BD*
2013
211
$1,075,000
$485/sf
60
10.0
2014
250
$1,052,075
$482/sf
61
11.4
2015
258
$1,094,500
$477/sf
56
11.7
2016
240
$1,150,000
$502/sf
55
11.4
2017
222
$1,212,500
$562/sf
47
11.1
2018
192
$1,414,000
$548/sf
50
9.6

*S/BD = Sales per business day, which had the same 14% YoY decline.

This far into January means there won’t be many more late-reporters to come.

At least pricing……oh never mind. There’s nothing price can’t fix.

Posted by on Jan 9, 2019 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 4 comments

Fed Hike?

A pause in the Fed hikes was looking good.

First, the WSJ posted an editorial on Sunday – a snippet:

If you think your job is tough, consider Federal Reserve Chairman Jerome Powell. He’s signaled for months that the Fed will raise interest rates again this week, but economic and financial signals suggest he should pause. Meanwhile, Donald J. Trump is beating him up almost daily not to raise rates.

What to do? The right answer is to ignore the politics, inside and outside the Fed, and follow the signals that suggest a prudent pause in raising rates at this week’s Open Market Committee (FOMC) meeting. Get the monetary policy that best serves the economy, and the politics will work itself out. Get the policy wrong, and Mr. Trump will be the least of Mr. Powell’s political worries.

Josh agreed in his tweet above, and it looked like we had a shot!

Trump could have just let it go…..but noooo, he had to tweet one more time:

In case the Fed is looking around for evidence, consider our recent home sales:

End-of-Year Detached-Home Sales and Pricing

Category
2017
2018
% change
NSDCC # of Sales, 10/1 – 12/15
600
537
-11%
NSDCC Median SP, 10/1 – 12/15
$1,200,000
$1,350,000
+13%
SD County # of Sales, 10/1 – 12/15
4,637
3,886
-16%
SD County Median SP, 10/1 – 12/15
$615,000
$640,000
+4%

The Fed is going to be tempted to make their rate decision based on politics, and show Trump who the boss is. Median pricing is like politics – it makes you want to make decisions based on less-relevant data.

Keep your eyes on sales – they are the precursor of what’s ahead.

Even if the Fed skips this rate hike, we are still going to see sales plummet next year.  They could help make it a softer plummet though!

Posted by on Dec 18, 2018 in Forecasts, Interest Rates/Loan Limits, Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

Home Sales 2019

The pundits are chiming in on their housing expectations for next year, and the opinions revolve around one topic:  Higher mortgage rates are changing things.

Here are two experts who don’t think the number of sales will change much:

“As we look toward 2019, we are anticipating home sales to decline around 2%. We’re expecting it to be another slightly slower year as buyers continue to wrangle with higher mortgage rates after contending with several years of rapid price growth.” — Ruben Gonzalez, chief economist at Keller Williams

“We’re going to have the same number of transactions, but…rates are going to nudge up to 5 percent; market times are going to expand out to 30 days. You’ll have to have a different set of skills.” – Brian Buffini

For sales to stay the same, then buyers will have to agree that the sellers’ prices are about right. Will sellers list their homes attractively enough, especially early in the selling season?

Or is it more likely that they will add a little mustard to their price in spring, just because they’re not going to give it away?

I want to compare a full 12-month history to prior years, so let’s examine the December 1st to November 30th period – let’s have history guide us:

NSDCC Detached-Home Sales

Year
NSDCC Sales, Dec 1 – May 31
NSDCC Sales, Jun 1 – Nov 30
2013
1,631
1,670
2014
1,319
1,492
2015
1,463
1,608
2016
1,470
1,651
2017
1,466
1,636
2018
1,339
1,484

The 2018 sales are similar to those in 2014, which happens to be the last time rates had popped up 1%.

But then the rates started declining right away, and by the end of 2014 they were back in the 3s, which powered the strong sales between 2015-2017:

(click to enlarge)

But today, rates are much higher – and so are prices:

Something has to give, doesn’t it?

Sellers aren’t going to bend much on price, especially early in 2018 – they won’t believe their prices are wrong until they try them out for months, and maybe longer.

So if most buyers wait-and-see, then sales have to give.

I’m sticking with my prediction that 2019 NSDCC sales will drop 20%, YoY.

Posted by on Dec 7, 2018 in Forecasts, Jim's Take on the Market, Sales and Price Check | 0 comments

NSDCC November Sales

The slowdown started in July, so the November sales count is surely going to reflect the impact – and it does. Sales were down 11% year-over-year:

Year
# of Sales
Median SP
Avg. Cost-per-sf
Avg. DOM
Avg. SF
S/BD*
2013
187
$1,030,000
$474/sf
58
2,960sf
10.4
2014
173
$985,000
$489/sf
63
3,071sf
10.2
2015
196
$1,173,750
$518/sf
54
3,067sf
10.9
2016
244
$1,235,908
$531/sf
51
3,046sf
12.8
2017
218
$1,200,305
$522/sf
46
3,093sf
11.5
2018
194
$1,310,000
$568/sf
55
3,067sf
10.2

*S/BD = Sales per business day, which had the same -11% YoY decline.

Let’s put away the panic button for now.

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

November Panic?

If sellers were feeling a sense of panic about the market – and prices – we would be seeing more new listings hit the market.

Let’s boil it down to one simple comparison.

Are there more listings than usual coming to market?

NSDCC Listings, November

Year
November Listings
Median List Price
# Sold
Percentage Sold
2013
223
$1,159,000
137
61%
2014
267
$1,199,000
167
63%
2015
299
$1,399,000
163
55%
2016
284
$1,354,999
163
57%
2017
252
$1,600,000
162
64%
2018
292
$1,499,500

I wouldn’t be too concerned about the median list price being lower. The list prices don’t mean much, and if it weren’t for an extra 13 lower-end listings then the 2018 median LP would have matched last year’s.

More listings, longer market times, and higher failure rates are in our future – and we can handle it!

There have already been ten listings from last month close escrow – five were sold off-market – and another 54 are pending, so somebody’s buying something. Here are three examples:

1. This 2-br house sold for $1,400,000 in March, 2018, and then was advertised as a Coming Soon for $1,695,000. It closed for $1,650,000 a month ago:

Link to Listing

2. Amy and Susan sold this CV house for $51,000 over list, and closed this week:

Link to Listing

3. This Cardiff house backs to the freeway but it does have ocean view – it just closed this week for $1,950,000, which was above the high-end of the range:

Link to Listing

Here is the sales history of the same house:

If sales dropped 20%, we’d still have 80%!

Posted by on Dec 5, 2018 in Coming Soon, Jim's Take on the Market, North County Coastal, Sales and Price Check | 0 comments

October Sales in San Diego County

October sales in San Diego County were down 12% year-over-year, and the freefall should continue.  While the experts will keep pointing to housing being not as affordable now that rates and prices are up (this article states that the median-priced San Diego home in October costs an additional $321 per month this year), the plummeting sales can also be attributed to sellers being comfortable waiting for that perfect couple with 2.2 kids to come along.

This article also mentions that the current inventory is 46% higher than it was last year, but on the MLS the total number of 2018 listings for the county is only up 8% YoY, which demonstrates more standoff conditions – sellers are waiting and listings are stacking up.

Add the buyers’ unaffordability to lowly-motivated sellers and we have the perfect ingredients for standoff stew.

From the U-T:

In October, the median home price was $558,000, down by $25,000 from the all-time peak reached in August, but still up 5.4 percent for the year. Sales were down 12 percent compared to the same time last year and at their lowest level since 2011. There were 3,162 home sales in October, down from 3,592 in 2017, 3,597 in 2016 and 3,356 in 2015.

“I think the boom is over,” said financial analyst Rich Toscano, who predicted the housing crash in November 2005 on his housing blog Professor Piggington’s Econo-Almanac.

Read More

Posted by on Dec 1, 2018 in Jim's Take on the Market, Market Conditions, Sales and Price Check, Slowdown | 2 comments

Selling Early

Earlier we saw how a fresh new listing gets more traffic, and that buyer interest dies off quickly:

http://www.bubbleinfo.com/2018/11/02/selling-your-home-in-2019/

Yet historically about 3/4s of the sellers insist on testing the market for weeks or months, just to make sure. Buyers don’t mind waiting, because they usually get a better price when they do.

Realtors get criticized for just wanting a quick sale, but the data shows that selling earlier in the listing period means getting closer to the list price.

The first group here are those houses that sold during their first 10 days on the market, and the second group are those that sold after 11+ days:

NSDCC detached-homes sold between September 1st and October 31st:

Year
#Sales DOM 10-
Avg SP:LP
Med SP:LP
#Sales DOM 11+
Avg SP:LP
Med SP:LP
2014
114
99%
97%
366
93%
96%
2015
115
99%
100%
356
95%
98%
2016
148
98%
101%
390
93%
96%
2017
141
99%
101%
377
95%
99%
2018
115
97%
100%
327
94%
97%

Buyers are demanding a slightly larger discount today, plus sales are also down 15% YoY so a few sellers aren’t budging – but they’re not selling either.

It’s probably never been so important to be sharp on price. Just don’t add any extra mustard!

Posted by on Nov 16, 2018 in Jim's Take on the Market, Listing Agent Practices, Sales and Price Check, Why You Should List With Jim | 3 comments

NSDCC Monthly Sales History

Yesterday we heard the ‘stunning’ news that September sales dropped 13% year-over-year in Southern California.  What about locally?

There were 208 detached-home sales between La Jolla and Carlsbad this year, which was 20% below September, 2017. But once you factor in the extra business day, it was really -12%, which isn’t outrageous.

The sales and pricing stats will be more bouncy now that we’re pulling into Stagnant City.  We already had two other months this year (May and June) that had -20% sales YoY, and we bounced right back and had more sales the next month (July was 271 vs 260) and about the same in August (275 vs 279).

The NSDCC sales last month (Happy November!) have already matched those in 2015, and once the full count is in, should be close to those in 2017 (we did have an extra day this year). I bet that won’t make the doom-doom report!

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