All the hubbub about a hot market, and about $3, will get you a cup of coffee these days. Let’s keep an eye on what actually closes, that is where the real proof lies. Here’s a youtube tour of Solana Beach houses that closed in January, 2010:
Another Sunday cruise via youtube:
MLS Listings of Detached Homes in Carmel Valley, 92130:
ACTIVES: 111
$1,778,211 average list price, $399/sf, 132 Avg. Days on Mkt.
(25% of those homes on market more than 6 months)
PENDINGS: 63
$1,163,104 average list price, $336/sf, 76 Avg. DOM
(41 pending, 22 contingent)
DEC. 09 SOLDS: 47
$1,032,650 average sales price, $331/sf,
75 DOM, 96% SP:LP
DEC. 08 SOLDS: 20
$1,092,245 average sales price, $346/sf
46 DOM, 95% SP:LP
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In areas like CV, I think you can count the contingents as ‘likely-to-close-someday’, because the low inventory and quick sales are causing buyers to hang in longer, and pay more if needed – just to buy something, and conclude the hunt:
There have been 16 houses listed over $1,000,000 that have gone pending this month in Carmel Valley. In 2009, there were 121 closings over $1,000,000, averaging $338/sf.
Later we’ll take a look at some flippers around the normal beat, Carlsbad to La Jolla, but first let’s review the December stats in Oceanside’s 92057.
Northeast Oceanside was one of the first zip codes in the county to feel the full impact of the real estate collapse. We saw 50%-plus declines in value around 92057 over a year ago – is it a precursor to what will happen further south?
If so, might this happen in your area?
The mix of the 64 December SFR sales from 92057, and how the buyer financed:
REOs: 17 (10 conv, 6 cash, 1 VA)
Short Sales: 17 (7 FHA, 6 conv, 2 cash, 2 VA)
Regular Sales: 13 (8 conv, 2 cash, 2 VA, 1 FHA)
Flippers Selling: 9 (3 FHA, 3 VA, 2 conv, 1 Cal Vet)
Brand New Tracts: 8 (7 conv, 1 cash)
If you wanted to buy a regular house with a regular seller in 92057, you were limited to 23% of the resale market in 92057 last month.
Will this bank-dominated environment come to more areas of the North San Diego County Coastal region? Will 1 out of 6 resales be a flipper-finish, like it was last month in 92057?
Overall, the buyers used 52% conventional, 17% cash, 17% FHA, and 14% VA financing.
Statistically, it looks like a fairly stable market, year-over-year for 92057:
| Year | # of Dec Sales | Avg. $$/sf | Avg. SP | SP:LP | DOM |
| 2008 | $332,675 | 99% | 77 | ||
| 2009 | $345,246 | 100% | 66 |
Speaking of ooze, for Frank Zappa fans: I Am The Slime video
We’re past the holiday season, the Chargers have checked out, and February is ten days away.
Let’s review current market conditions:
Trustee Sales for North SD County Coastal SFRs (Carlsbad to La Jolla)
There are more properties on the NOTS auction list (444) than on the NOD list (337), which at casual glance might make you think we’re winding down.
But the NOTS list is loaded with a rolling group of old defaulters that get postponed each month – 82% of the properties on the auction list have had at least three postponements.
SINCE DECEMBER 1st:
New NODs: 122
New NOTSs: 88
Trustee Sales: 67
Trustee-Sale Cancellations: 75
MLS sales: 312
(255 regular, 35 REOs, 22 short sales)
The slow-drip system is working beautifully for the banks. Virtually all of the 444 auction properties have had a sale date since December 1st, yet only 142 had some resolution (32%), and that’s being kind – many of those cancelled will be getting back in line.
The blob of defaulted properties is impeding the foreclosure channels with delays and uncertainty. Buyers hoping to snag a trustee-sale deal will need to be very patient.
We are following twenty properties that already had sale dates this month, and only one ended up on the ‘steps (sold to a third party), and the rest postponed.
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Neg-Am Recasts
We’ve all seen the charts, there are $134 billion in option-ARMs that are expected to recast over the next two years. About 1 out of 3 option-ARMs are delinquent or in foreclosure now, so we’ll see boatloads of short sales and REO/flipper properties being offered for years to come.
How many in your area? I’m going to try and obtain more breakdowns by zip, but the last count showed that 5.5% of the properties with mortgage in Encinitas, Carmel Valley, and RSF had a neg-am or option-ARM.
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Flippers Are Active
With the lack of quality inventory available, flippers have an open playing field. But with postponements dominating the court house steps, there are only 1-2 trustee sales per day being bought by a third-party of properties from Carlsbad to La Jolla, which doesn’t sound like much. But when compared to December’s total of 238 SFRs sold on the MLS, we could see flippers wind up being 10% (or more) of the market in 2010.
I’m working on the count of recently-flipped properties.
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Sandicor’s New Public Website
Our local MLS provider, Sandicor, has had a new public-MLS website “in development” for the last two years, and should be ready in the next few months. According to sources, all they need to do is determine how to brand it, and who is going to pay for it – though that sounds nebulous.
The Houston Board of Realtors has pioneered the public-MLS, including a realtor-feedback feature, which Sandicor is considering. I heartily recommend it, as realtors we need to provide a way to police ourselves.
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Recent MLS Sales
Just in case there was some influence on early-December sales from the tax credit, here’s how the Dec 15 to Jan 15 period compares to previous years:
The basic sales stats look decent, in spite of the calamity.
The street shots in this youtube were taken a week ago, and added to remind folks what the weather is usually like, instead of the torrential downpour we’ve been having the last few days.
The rain isn’t stopping people from looking at houses though:
Next up is a ‘RE State of the Union’ report.
The low inventory is causing some buyers to cast a wider net, and those who venture out to places like Vista are finding some intriguing alternatives:
The new year is barreling down on us, and before you know it we’ll be in the ‘spring-kick’ season. How is it looking so far?
I want to update the previous stat check from a week ago – it wasn’t balanced due to fewer business days/more weekends. Let’s compare the first 15 days of January, that way every year will have two weekends included, instead of the previous Jan. 1-11 comparison.
We can refer to the 2003-2007 period as the ‘steroids era’ of mortgage lending, and consider those stats hyped up. All years are included below:
January 1-15
| Year | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Closings | 125 | 103 | 78 | 86 | 90 | 108 | 100 | 65 | 71 | 36 | 46 | 61 |
| $$/SF | $273 | $264 | $304 | $262 | $310 | $422 | $471 | $502 | $521 | $494 | $410 | $368 |
| DOM | 71 | 107 | 41 | 77 | 69 | 81 | 62 | 72 | 89 | 67 | 80 | 84 |
You can see a historic timeline just in these numbers. In 1997, Bush passed the $500,000 tax exclusion for couples who owner-occupied for two-out-of-five years, and by 1999, the specuvestors were flipping houses. They lost some steam after 2001 because the thrill was gone after the second move, and buyers were drying up, right in line with the usual 10-year real estate cycle – in fact, a downturn was overdue.
About then there was an audible gasp from the Calabasas area, and the next thing you know CFC was flooding the streets with neg-am mortgages – and by 2003 the market took off like a rocket. So let’s call the 2003-2007 period the ‘steroids era’ of mortgage lending, and not use those numbers for comparison.
Instead, let’s look at the 1999-2002 era as at least being more normal than any year since (but in reality we haven’t had a normal year around these parts since 1985!). In 1999, the flipper tax exclusion helped to boost sales, plus the interest-only mortgages were the loan du jour – and both are still available today. In addition, we have much lower rates, and higher loan limits today, so let’s at least call the 2010 market, ‘semi-juiced’, and compare to the 1999-2002 era which had some juice to it too:
| Year | 1999 | 2000 | 2001 | 2002 | 4YR AVG | 2008 | 2009 | 2010 |
| Closings | ||||||||
| $$/SF | $273 | $264 | $304 | $262 | $494 | $410 | $368 | |
| DOM |
So we’re not quite back to turn-of-the-decade numbers, but there is a slight resemblance with the number of sales. Could we call it ‘close-enough’, just because the ultra-low inventory is impeding sales? What are other factors? The number of sales should be higher once the late-reporters wrap up, that usually adds 10%. Currently there are multiple offers on every decent-priced listing today, and if it weren’t for the graft and corruption among agents, there would be more sales at higher prices, probably at least 70-90 sales for this period. But the price has to be right – look at the disparity between active and pending listings in North SD County Coastal:
1,124 Actives: LP=$680/sf, 121 DOM
289 Pendings: LP=$375/sf (x 95% = $356/sf SP), 71 DOM
There shouldn’t be any fear of additional foreclosures, in fact; the more, the better. They are the best chance of finding more reasonably-priced homes that you can buy!
Our old friend in La Costa Oaks keeps evolving. Out of the 20 homes on the street, four have been foreclosed, and two sold short (one of those is still pending). But on November 9th there was a sale of a 3,345sf house on the culdesac that was head-scratcher:
We’ve been following this story for years about the 16,330sf house in Olivenhain, and now it’s finally on the market, listed for $2,700,000. The basics are covered in the video, but this article fills in some of the extra details: Link to NYTimes article
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Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
