‘Deals’ in Carmel Valley
For those looking for ‘deals’ in the 92130, there are houses that have been purchased recently that have closed for less than $300/sf. What do you get?
Buy When Jobs Improve?
From an article in the WSJ, and four excerpts (with JtR’s comments underneath):
1. Sales may have been even worse if mortgage rates hadn’t been so low, said David Berson, chief economist at PMI Group Inc., a mortgage insurer in Walnut Creek, Calif. Low mortgage rates won’t hurt, he says, but “they will give you less traction in the market than we would normally get.”
2. How long the hangover from the tax credit will last depends on how long the economy takes to recover. Tuesday’s housing report was “a wake-up call to anyone who’s trying to understand why housing has not been recovering,” said Ivy Zelman, president of housing-research firm Zelman & Associates. “The artificial boost from the tax credit masked the impediments.”
3. One troubling sign for the market is that banks appear to be listing more homes for sale, just as demand has dropped. The number of bank-owned listings increased 12% in August from the previous month.The figures, tracked by Zelman & Associates, include listings for the top 10 U.S. banks in 20 states and from mortgage companies Fannie Mae and Freddie Mac.
4. “I’m in no rush,” said Steve Hamilton, who sold his Carlsbad, Calif., home two years ago and has been on the sidelines since. He said he was happy to continue renting a home that costs half of what the monthly mortgage payments were just a few years ago. “The tide is still going out,” said the 41-year-old commercial-real-estate investor. “When I see a steady increase in local jobs, that’s when we’ll step back into the market.”
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My thoughts on their remarks, in order:
1. Less traction than normal? What I wished he would have said: “If your house isn’t selling when rates are 4.5%, then your price must be wrong.”
2. “The artificial boost from the tax credit masked the impediments.” I don’t think the tax credit was an artificial boost. It was free cheese for buyers who bought the listings that were priced right, and the supply of right-priced listings has been exhausted. Today’s listings are priced higher than April’s, and that’s why they aren’t selling, not some mysterious masked impediments. I still keep running into multiple offers on well-priced new listings.
3. August isn’t over, yet we’re claiming a 12% increase in REO listings this month? Shouldn’t we take the count in a couple of weeks? Here are the REO listings for San Diego County, by month:
706+715+783+805+664+715+674+440 = 5,502 REO listings in 2010, YTD.
Jan-Aug, 2009 = 6,307.
It looks like August will probably exceed July, unless bankers go on vacation. If they do increase REO listings, hooray, let’s move some product. But I’ve seen some high-priced REOs lately – remember how they used to get multiple offers the first week? Only 53% of July’s REO listings have found a buyer.
4. Steve is clearfund, and I introduced him to Nick at the WSJ – thanks for participating.
Let’s ask Mr. Hamilton:
a. If you saw a steady increase in local job next year, would you buy a house?
b. If you never saw a steady increase, would you never buy a house?
I think Steve, like vegasandre, Tony Robbins, and the rest, have specific markers and guideposts to assist them with following the market, which is good. Steve enjoys extensive knowledge and experience in his designated target market, and can comfortably afford to buy if the right deal came along. Are you saying that if you saw the right house that you could buy at the right price, that you wouldn’t buy it?
We made a silly bet that I don’t want to muddy the waters. I’ll just say that I think there will be enough good deals drop in his lap over the next 1-2 years, that one will be irresistible. And one is all it takes.
Sky Falling, Or…Not?
This video has Yunnie saying that the sky may not be falling, which proves that he reads here.
Larry, the next time they stick a microphone in your face, say that the problem with the record-high inventory is that the sellers are crazy about their list prices! Lower prices will fix anything!
Local Market Stats, 2-Month
At 7am this morning the NAR existing-home sales data for July is due out, and everyone expects a bloodbath. Pundits will be guaranteeing the double dip, and calling for home prices to plunge throughout the land. There will also be remarks about how the tax credit pulled demand forward.
The NAR number is measuring the national drop in sales between June and July, but everyone has been saying for weeks how the tax credit was responsible, so how much does today’s number really mean?
To get a better read on the local market action – and to smooth out the noise – let’s compare the year-over-year change in the number of detached and attached sales, and avg. cost per sf for the two-month, June/July period in each area:
| Area-Zip Code | 2009# | 2010# | diff | 2009$ | 2010$ | diff |
| Cardiff | +53% | $463 | $440 | -5% | ||
| C-bad 008 | -17% | $286 | $316 | +10% | ||
| C-bad 009 | +27% | $253 | $258 | +2% | ||
| C-bad 010 | -26% | $239 | $252 | +5% | ||
| C-bad 011 | +8% | $287 | $295 | +3% | ||
| Del Mar | -11% | $610 | $506 | -17% | ||
| Encinitas | -22% | $344 | $350 | +2% | ||
| La Jolla | -12% | $527 | $548 | +4% | ||
| RSF 92067 | +207% | $467 | $417 | -11% | ||
| Solana Bch | -8% | $491 | $443 | -10% | ||
| RSF 92091 | -44% | $383 | $392 | +2% | ||
| PB/MB | -5% | $442 | $461 | +4% | ||
| West RB | +26% | $255 | $261 | +2% | ||
| RB 92128 | +2% | $256 | $259 | +1% | ||
| RP 92129 | -1% | $249 | $265 | +6% | ||
| CV 92130 | -4% | $340 | $346 | +2% | ||
| Scripps Rch | +2% | $266 | $270 | +2% | ||
| Above total | 1,276 | 1,312 | +3% | $329 | $330 | flat |
| All SD | 6,563 | 5,963 | -9% | $228 | $244 | +7% |
The sky might not be falling just yet, especially in North SD County Coastal, where the Y-O-Y numbers look pretty similar. There is only two areas, Del Mar and Solana Beach, where both sales and pricing were negative, Y-O-Y. But hopefully the sellers are just gleaning the headlines today!
Sky Will Fall Tomorrow
Everyone is looking forward to the existing-home sales data coming out Tuesday:
CV Down Payments
More review of the 101 SFR sales between June 1st and August 17, 2010, in 92130.
These are from the tax rolls, and include new-home sales, FSBOs, and deals not on the MLS:
1. There were 28 of the 101 that sold for less than they paid, at an average drop of 12%.
2. Five of the 28 sold for a loss of at least 20% or greater. (73 sold for more than they paid)
3. There were nine new Pardee homes sold, between $764,000 and $805,000 (only one on MLS).
4. There were 92 sales on the MLS, plus the one dirty deal on Winstanley.
5. There were 8 short sales, 2 REO listings sold, and one flipper – Adam!
Here’s how the buyers financed their purchases:
| Down Payment | # of |
| Zero | 1 (this was a no-down doctor loan) |
| 3.5% FHA | 4 |
| 5% | 1 |
| 10% | 4 |
| 20% | 23 |
| 25% | 10 |
| 30-40% | 19 |
| 41-50% | 19 |
| 51-75% | 12 |
| 100% all-cash | 8 |
Over 90% invested at least 20% down, and 58% used a down payment of at least 30%.
For those homebuyers looking to purchase in an area that has a lower threat of foreclosures in the future, Carmel Valley is about as safe as it gets – at least on the surface. These buyers must have felt pretty comfortable with their personal financial situation to invest as much as they did, and it’s been the trend that we have seen lately in the CV!
Is Carmel Valley the Hottest?
The other day we sampled a few recent home sales in Carmel Valley, 92130.
Some wondered, “why does CV seem to be beating the odds?” Besides the top-notch schools, another reason is because it’s the only place in North SD County Coastal where there are loads of newer houses. Most home buyers are not experienced in home repair or improvements, and they get the impression that a newer CV tract house would be the best way to avoid a “money pit”. Home sellers in general would be smart to take a page from the CV playbook, and dial in their house before putting it on the market – today’s buyers are picky and are holding out for the gems.
In particular, the affluent buyers want it all, and it appears that 92130 is a primary destination for those with money. Here are the tax-roll stats on the SFR sales between June 1 and August 17th:
| Area-Zip Code | 2009 | 2010 |
| DM 92014 | ||
| RSF 92067 | ||
| SB 92075 | ||
| LJ 92037 | ||
| CV 92130 |
But there are cheaper homes in CV, how does 92130 stack up with the other high-end areas? Here are the number of SFRs that closed over $1 million between June 1 and August 17th:
| Area-Zip Code | 2009 | 2010 | DM 92014 |
| RSF 92067 | ||
| SB 92075 | ||
| LJ 92037 | ||
| CV 92130 |
Carmel Valley nudged out La Jolla and Solana Beach (which includes Fairbanks Ranch and the Crosby) to have the most sales over $1,000,000 this summer so far. Next we’ll look at the recent down payments used to purchase these houses in the CV!
Architectural Photography
Julius Shulman, who passed away last year at age 98, captured the work of nearly every modern and progressive architect since the 1930s including Frank Lloyd Wright, Richard Neutra, John Lautner and Frank Gehry. His images epitomized the singular beauty of Southern California’s modernist movement, and brought its iconic structures to the attention of the general public. A documentary about him, called Visual Acoustics, has been running on the Sundance Channel – more at this link: http://www.juliusshulmanfilm.com/
Buyers vs. Sellers
Mansion Squatters
Thanks to SM for keeping an eye on this story:
By this chapter of this curious tale, Mark von der Burg surely is wondering: Why me? What did I do to deserve this? He’s the Eastside real-estate agent who, two months ago while prepping for an open house to sell a $3.3 million mansion in Kirkland, was stunned to find that complete strangers had moved in and were staking a tortured legal claim to the foreclosed property.
Von der Burg says that while the mansion-squatting story may have been entertaining — it ended when police retook control of the house for the bank that owned it — it cost his client, a bank, $35,000 in legal fees and bills for locksmiths, security and cleanup. So count him as not amused that this week, the same team of squatters apparently attempted to stake claims to three new mansions on the Eastside — including a $2.2 million, 5,000-square-foot Craftsman in Bellevue for which von der Burg is, once again, the listing agent.
“These people need to be stopped,” he said. “How long are we going to let this go on?”
Police say no one has as yet moved into any of the houses. But all three had letters tacked to the front doors ordering anyone claiming ownership “to surrender possession within three days.” And then threatening “judicial proceedings” against anyone who doesn’t comply.
The name and signature of James McClung was on all three letters. He’s a former Bothell real-estate agent and owner of NW Note Elimination, a company he runs with Jill Lane — the woman who was arrested for squatting in the Kirkland mansion in June.
Neither McClung nor Lane got back to me this week. But both said in June that despite being kicked out of the Kirkland mansion, they had a list of at least 10 other houses in the Seattle area to which they intended to stake claims. All the houses were tied to bank failures — the bank holding the loan on the properties had gone under and had its assets transferred to another bank, or to the federal government.
The pair hopes that the actual documentation of who owns these properties was mislaid or improperly recorded as mortgages were divided and resold on Wall Street during the bubble years. It has become a strategy in foreclosure cases around the country to force banks to “show me the note.”
Jim Klinge
Klinge Realty Group
Broker-Associate, Compass
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