It was mentioned that these listing agents might be giving the sellers a holiday break, but most of these were marked pending in the first week or two of December. Hanukkah maybe?
I guess it’s possible, we will have to see what happens right after the holidays. Let’s follow-up in a few weeks. The house on Stone Haven (with moving van in front) closed today for $1.38 – list price was $1.449M.
Here are a few more:
“…after the Chargers win the Superbowl.”
Are you asking to be hacked again? 🙂
The prices and sales boom are insane. Is this the emergence of a mini-bubble? Will SoCal be worse off in a couple of years if the market collapses once again?
You’re not the only one flabbergasted.
All I can think is that some people with good jobs & better savings are buying the whole “recovery” meme and deciding they need to jump.
I live in the same neighborhood as the Santa Dominga house from the clip which just closed for $1.6M. The house across the street which also has ocean views and is 4200 sq ft closed for $1.075M in Sept…(relocation company sale) Just shows the difference between motivated sellers and those who will wait a year to get their price.
I still say that the somewhat updated Piggington has the biggest reasons why housing is selling. I found his August data, an update from what I previously could find. This is for San Diego as a whole, and we can’t say it applies to the entire market (some areas may have further to drop) but it shows what buyers are thinking. They are thinking that houses are reasonably affordable, especially when you factor in record low mortgage rates. We’re at price/income ratios not seen since 2001 and price/rent ratios not seen since 1999. On a monthly payment/rent ratio for 20% down 30 year fixed loans we’re sitting at the lowest recorded (1977)
Piggington
I will add the caveat that if interest rates go up these numbers won’t work out and we’ll likely see housing prices going down. Despite that, we may see an increase in monthly payments which is how many people afford their homes. Considering we haven’t seen prices this affordable in 8 years, a decade or since 1977 (depending on the metric) it’s no small wonder that there’s demand.
There is NO inventory right now. The market feels exactly like it did in spring 2004.
Looks like things are getting back to SNAFU/Normal in SoCal.
Jim, is this phenomenon strictly a San Diego County happening or is it all of So Cal? If it’s all of So Cal I’m sprucing up the old crib and planting the sign in the yard.
I’m not Jim but I don’t think the weird inflated pricing is *all* of southern Cal. Inland Empire is considered SoCal – and that area is behaving quite differently.
Coastal So Cal is it’s own eco system when it comes to irrational real estate markets.
It’s all about micro-markets. Once you get within viewing/walking distance of the water, all bets are off. They aren’t making more coastlines.
The buyers of most of these houses, especially the 3700sf and the 1200sf ones will NEVER(10-20 years) see any appreciation on their purchase. 20 years from now, incomes will not have gained enough to justify any higher price for those size/age houses. Thus, why in the world would anyone buy those houses when they could rent the equivalent for a third or half of the monthly cost? There is no shortage of idiots out there.
JordanT – I have to agree with your comment. People come up with all sorts of explanations, but sometimes the simplest explanation is the best.
Right Wow, the buyers are all “idiots” and they won’t see any appreciation for up to 20 years. Speaking of idiots…..
Transactions like the one on Santa Dominga definitely impact inventory significantly…owners who see that deal will either list at a crazy price or just pull off the market to wait for the “perfect buyer”
would not be surprised if “Wow” is actually closer to being correct than more people may think.
Prices will eventually decline to year 2000 levels – there is no way around it. then there will be many years of stagnation.
Prices will eventually decline to year 2000 levels – there is no way around it. then there will be many years of stagnation.
As a whole, we’re already there on a price/income ratio and a price/rent ratio. On a monthly payment/rent ratio we’re lower than 1977 levels due to the low interest rates. That’s not to say it won’t go down further, but to act like San Diego home prices are out of whack with the historical norms for the area is ignoring the evidence.
It’s funny to see quotes like ” rent the equivalent for a third or half of the monthly cost”.
It seems so 2006.
the areas that are out of whack are the high end areas. The La Jollas,Del mar’s , RSF of the world are the ones that really have to be concerned. They will go back to year 2000 pricing(not adjusted for inflation).
The under 400k area is most likely near bottom- with at most a chance for a additional 10% haircut(from early 2009 levels) and I feel that this will not happen till 2011 at earliest due to expected spring fling with the housing credit coming next spring.
Jim, is this phenomenon strictly a San Diego County happening or is it all of So Cal? If it’s all of So Cal I’m sprucing up the old crib and planting the sign in the yard.
rodeman | December 22nd, 2009 at 8:00 am
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There are reports from all around the country and all around the globe about the surge in speculative RE purchases. It is not about the ocean, it is not “special” here.
Buyers from ????? are buying up everything they can get their hands on all around the world. Speculation is back, and it might be even stronger than during the peak of the bubble, IMHO (not just MLS listings). Either they know something that we do not, or they’re likely to get burned. Only time will tell if they are making the right move.
the areas that are out of whack are the high end areas. The La Jollas,Del mar’s , RSF of the world are the ones that really have to be concerned. They will go back to year 2000 pricing(not adjusted for inflation).
I try not to comment on the high end. I feel that the available data doesn’t apply to it, and I don’t run in those circles to get a feel at all as to their financial situation. It also seems like the high end rarely follows the fundamentals the rest of the market does like price/rent ratios.
I’m still sticking by my guns and saying that extremely low interest rates and affordability is causing normal people to buy real estate. Even if the “Chinese” buy all the real estate, who’s buying it from them? Or are all those properties sitting empty?
Just to give some perspective on a similar market on the east coast, my old home town, Palm Beach County Florida is still stuck in a free fall in price with sales just starting to sputter to life at 50% off peak at all price ranges. Rents are off 20% and getting softer. The North County Coastal market seems like a red hot locomotive in comparison. On a personal note, after spending a month in Florida taking care of some business and visiting lifelong friends, I was elated to arrive back in Carlsbad. I have a friend and his daughters spending the holidays with me. They spent a whole day here in North County before declaring their intense desire to relocate here. The magic is here and it is going to attract people with money to spend. The whole “affordability” formula is not valid west of El Camino Real.