(the title should have been ‘Jan-plus Sales Roundup)
Let’s keep the stats coming; here the updated Y-O-Y comparisons for the period Jan. 1 thru Feb. 18 (and 2010 will have some additional late-reporters):
Town or Area
2009 SOLDS
2010 SOLDS
2009 $/sf
2010 $/sf
Carlsbad
56
64
$269/sf
$276/sf
Carmel Valley
31
38
$348/sf
$342/sf
EncinitasCrdff
38
40
$354/sf
$375/sf
La Jolla
20
18
$815/sf
$541/sf
RSFDMSB
26
44
$524/sf
$503/sf
RB West
36
40
$258/sf
$272/sf
The inventory has been lower during the latest counts, yet the sales are improved in all but La Jolla, which was only off by two. In my opinion, this is a strong indicator of a healthy market, and why I think that if there were more inventory, the sales would be even better/stronger.
The ratio of active listings to pendings has been a decent gauge of the market’s relative health.
Here’s our scorecard, historically, of the ACT/PEND ratio:
0-2 Hot market
3-4 Regular market
5-6 Market in trouble
7-8 Too many choices
9+ Freefall
Here are the active and pendings listings:
Town or Area
ACT Reg
ACT SS
ACT Reo
ACT Total
CONT/PEND
A/(C+P)
Carlsbad
236
24
6
266
60/151
1.21
RB West
123
28
3
154
48/54
1.51
Carmel Valley
112
7
3
122
22/47
1.77
EncinitasCrdff
181
12
5
198
25/68
2.13
La Jolla
182
8
2
192
15/33
4.00
RSFDMSB
377
6
7
390
23/42
6.00
The market is smoking hot when actives-to-pendings ratios are under 2:1 in a number of areas. The restricted inventory is the cause, and now a primary market indicator. But if inventories start to increase, some pent-up demand may gobble them up – where does it start to balance (or tip over)?
For those watching the new listings that are hitting the MLS these days, it may seem familiar. So far, the 2010 Spring Kick is looking much like last year’s.
Courtesy of our friends at Housingtracker.com, we’re seeing the usual uptick in new inventory, similar to recent years:
But during the Spring Kick season last year, the median list price of higher-end new listings went ballistic –between February and June, the median asking price rose from $663,000 to $865,958, an increase of 30%:
We haven’t seen that happen in recent years, did it cause the higher-end pricing to increase? Below is the graph of just the 75th percentile of North SD County Coastal region monthly median sales prices, showing relatively-flat pricing:
In 2009, the monthly detached sales for North SD County Coastal looks relatively normal – the usual increase in closings between May and August, with some extra pop in September and October, once sellers got off their high horse:
Look for a flood of overpriced higher-end homes coming on the market, but a relatively dull Spring Kick, because the buyers aren’t going for it. Either homesellers price it right, and sell, or they don’t.
When examining the pricing maze, you can also see a couple of bad comps throw a seller or buyer for a loop if they’re not aware of the background.
In a family-friendly, beach-close area like Terramar, where there has always been very low turnover, the last two sales on Los Robles could under-state today’s value, and the relatively under-satisfied demand around the beach (for cheaper homes) could surprise the next sale.
There’s also a follow-up to the Black Swan open house at the end of this video:
Home sale prices in Southern California showed fresh strength in January, bouncing 8.6% from the same month one year earlier — a period when the market was inundated with steeply discounted bank-owned properties.
But compared with a particularly strong December, the median fell 6.1% to $271,500 in January, ending eight consecutive months of price appreciation or stability in the Southland, MDA DataQuick, a San Diego real estate research firm, said Tuesday.
The month-to-month decline was attributable in part to the higher percentage of cheaper Inland Empire homes that sold in January compared with December as buyers in pricier locales stopped searching during the holidays and investors and first-time buyers made up a larger share of shoppers.
“The [January] numbers reflect, for the most part, people who would be out shopping in the middle of the holidays anywhere from late November to early January,” DataQuick analyst Andrew LePage said. “So it doesn’t surprise me that the concentration shifts a little bit back toward investors and first-time buyers, who probably feel the most urgency to snag what they consider a deal. A lot of other potential buyers would have been focused on other things during the holidays.”
We know that when you hear that the median price went up, all it means is that more higher-end houses were selling. The media makes it out that prices are rising, and that is not true.
(I spoke to the reporter Alejandro, but didn’t get off any pearls of wisdom. Got one in here though, with the Financial Times – and I was quoted before I saw CR say the same thing.)
From the FT:
After spending most of the past year focusing on largely ineffective loan modification plans, BofA, Wells Fargo, JPMorgan Chase and other large banks said they were ramping up short sales as a means of dealing with the housing crisis.
“If 2009 was the year of the loan modification, 2010 will be the year of the short sale,” said Jim Klinge, a real-estate broker in San Diego, California.
Some of the largest mortgage servicers are scrambling to make the most of this shift. Wells Fargo is holding seminars to teach real-estate brokers how to conduct short sales. Citigroup created a unit to expedite short sales and recently announced a pilot programme that gives homeowners who turn in their deed to the bank – known as a deed-in-lieu transaction – at least $1,000 towards relocation expenses.
BofA has hired additional staff to handle the increased volume, which is running at about double the level of a year ago. “Short sales are growing faster than REOs [real estate owned transactions] and that’s a new development,” said Matt Vernon, a BofA executive recently named to a new position of overseeing short sales.
The guys who made the video that aired on February 8th describing the IndyMac/FDIC/One West deal have responded to the FDIC’s press release, and are standing by their story:
Apparently the FDIC doesn’t pay a penny to One West unless losses exceed $2.5 billion, but who knows if that’s possible, or how close they are to hitting that number. There isn’t a smoking gun yet, and until CR lends some credibility to this story, it going to sound like a nothing-burger to me.
The worst thing that is going to happen is that one day it’ll slip out that the FDIC passed a few billion dollars to One West to honor the agreement, and there will be outrage for a day or two.
By then, we’ll be numb to it (if we’re not already?).
Jinx wondered if pricing was going to be flat for a while, and I think it’ll depend on the area in question. Some neighborhoods may look like they are going up in value, and others down.
The low-inventory conditions makes it harder to track the actual trends – either there aren’t enough comps to support a case either way, or the few comps are masking the real story. Plus the shadow inventory of defaulters is haunting the market – will there be a flood of REOs one day, or not?
Let’s highlight a few areas where buyers should proceed with caution.
The mid-Carlsbad market has shadow inventory of a different nature – new product waiting in the wings. Currently there are 150-200 homes underway around the Poinsettia/El Camino Real area, plus Robertson Ranch will add over 1,000 homes once it is built out – that’s a lot of Mello-Roos!
Two weeks in a row with a surfboard in a Porsche – will that be the new ice-cream truck? A bubbleinfo t-shirt to the first person to name that band!
Here’s a snapshot of reality – though somewhat extreme, even by today’s standards.
The first clip shows the difference between sales of a single-story, and a two-story house on the same street, that closed a month apart.
The second shows a new short-sale listing that has an extra kicker. The two mortgages exceed $1.1 million, and will be an agonizing grind to complete. When/if the short-sale is approved (which might be a stretch at the low asking price), the buyer will be asked to sign a form stating that they are not aware of any side agreements:
