This guy has been tempering his remarks the last couple of years, but he cuts loose today with one of the more irresponsible comments heard in quite a while – from the latimes.com:
“The stimulus has worked,” said Rick Hoffman, president of Coldwell Banker Residential Brokerage in San Diego and Temecula Valley. “Buyers are confident that we have seen the bottom of the real estate market and that we are on the way back up.”
He can’t speak for buyers – and he should have more respect for his agents who are trying to properly advise their clients.
Proceed with caution, and buy only if you find the right house, at the right price.
To qualify for the $8,000 federal tax credit, buyers have to secure a “binding” contract by the end of today, and close escrow prior to June 30th.
Has there been a mad rush over the last week to lock down a contract? Yes, buyers are looking feverishly, but it doesn’t look like many are buying just because of the tax credit – it still has to be the right house.
Here are the numbers of detached listings that have been marked pending over the first four days of this week, compared to all five days of last week – we’ll check back next week to see how many were marked pending, dated today (or backdated over the weekend):
# of PENDS
NSDCC
SD Co.
Last Week
56
501
This Week
46
414
In the end, both the federal and state tax credit will be bonus money for buyers who happened to be in the right place, at the right time.
There has been a real push to extend escrows that were originally planned to close in April, into May to be eligble for the state tax credit too. In a couple of weeks we’ll look back and see how the first-week-of-May closings compared to last year, but it’ll be hard to determine how many closed just because of the state tax credit – because in North SD County Coastal the detached sales have been much stronger this year overall:
SOLDS 1/1-4/23
NSDCC
$$/sf
SD Co.
$$/sf
2009
459
$399/sf
6,164
$214/sf
2010
660
$381/sf
5,784
$244/sf
A 44% increase in North SD County Coastal detached sales, year-over-year!
I’ve been doing my own research project too, see the youtube review below. But in the video I screwed up – I was blabbing about the ’69 Camaro Indy 500 Pace Car model and by mistake called it a California Special, a real insult. I apologize to Camaro lovers everywhere.
Clarification:
A white ’67 Camaro convertible paced that year’s Indy 500 and some 100 examples were built for speedway use, but it wasn’t a special edition.
When the Camaro again was invited to pace the ’69 race, Chevy determinedly exploited every aspect of the expensive opportunity. Thus was born regular production option Z11, a $37 striping package that recast a Camaro convertible into a Pace Car.
That $37 price is deceiving, because the RS trim package (which included hidden headlamps) and the SS trim package (with the Z/28-style Cowl Induction hood and decklid spoiler) also were required. Furthermore, the Pace Cars had their own special interior with orange and white hound’s-tooth upholstery complementing the orange stripes and white paint. Buyers could choose either the 350-cubic-inch/300 horsepower small-block V-8 or one of the four 396-cubic-inch big-block V-8s with outputs ranging from 325 to 375 horsepower (the latter with aluminum cylinder heads and an 11.0:1 compression ratio). The car 1960 Indy 500 winner Jim Rathmann drove at the head of the 1969 Indy field was powered by the 375-horse 396, but the vast majority of the 3675 replicas were 350-powered.
A listing agent in Carmel Valley said the other day, in response to an offer that was 5% under the bottom of his price range on a listing that was 53 days on market:
“CV is buzzing. The summer is warm and real estate is on. The gold rush is here again man, I suggest you put your pan in the water and get some!”
He has two sales closed this year, so take it all with a grain of salt. But the sentiment was accurate – the CV market is very competitive, and statistically holding up well. Last year the average sales price for detached homes in 92130 was $982,702, and so far in 2010 it is $983,485:
As we saw in the last video, people are out buying houses! Are they reading articles like this one today in the U-T and figuring now’s the time?
San Diego County’s housing market was the strongest in the nation in February, the widely watched Standard & Poor’s/Case-Shiller Home Price Index reported Tuesday.
The price index for San Diego was up 0.6 percent from January, the only market out of 20 surveyed nationally with an increase. The index locally was up 7.6 percent from February 2009, second only to San Francisco.
Those who have a deep desire to buy will shrug off the overly-negative blogs and gravitate to glowing reports in the mainstream media. People want to buy, and they tend to focus on news that supports that decision.
Here’s more:
Alan Gin, an economist at the University of San Diego, was at a loss to explain San Diego’s Case-Shiller numbers.
“It’s very unusual that every other market is down,” Gin said, noting that the unemployment rate of 11 percent here is worse than the national average.
The Case-Shiller figures indicated that prices were up in the top and bottom thirds of the local market but down in the middle, priced between $308,000 and $461,500. Gin speculated that’s because there are relatively few bottom-end sellers to buy mid-level move-ups.
To the layman, Alan is a familar authority because he gets quoted every month, right or wrong. When he can’t explain the appearance of a stronger market, people want to read it as good news too. As he notes, the local unemployment hasn’t slowed down the real estate market, and even with the Fed out of the MBS business the mortgage rates are holding – if they just stay in the 5% to 6% range, we should be alright.
Sellers will have to get off their high horse and lower their unrealistic list-prices as the spring/summer market unwinds, but if there are still enough buyers with cash and jobs, there doesn’t appear to be any other obvious bad news coming our way to stop them from buying.
It would take a major unforeseen event to rattle the market over the next few months, because the reports keep coming out positive. Your not going to see any real estate companies or financial institutions issuing any report to the contrary – most everyone is talking it up now. Tread carefully.
I think you can still rely on the same markers we’ve used over the last year:
You did pretty good these days if you bought a quality house in Carlsbad for around $250/sf, and in Carmel Valley for $300/sf.
Today’s averages for April, 2010 detached closings are $285/sf for 67 sales in Carlsbad, and $342/sf for 24 sales in Carmel Valley. We’re pushing to buy at 10% or more below the average.
Here’s how detached-home buyers have financed their purchase over the last 30 days:
Fin. Type
SD County
Percent
NSDCC
Percent
Conv
702
46%
135
67%
Cash
278
18%
49
24%
FHA
386
26%
15
8%
VA
145
10%
3
1%
Total
1,511
100%
202
100%
San Diego County overall is fairly reliant on the govies, with 36% of all houses purchased over the last month being bought with FHA or VA financing. North SD County Coastal not so much – which means that if there are more govie defaults ahead, hopefully the coastal area will be less impacted.
