What are the ingredients for a double-dip?
We could say that declining sales would be a precursor, and a downward trend in pricing would be an obvious sign. But the best signal would be houses on the market but not selling, listed for the same of lower prices than recent comps – or last year’s comps.
| Town | Zip | Oct ’09 Sales/$persf | Oct ’10 Sales/$persf | ACT listings/$persf, LP |
| Cardiff | 92007 | |||
| Carlsbad NW | 92008 | |||
| Carlsbad SE | 92009 | |||
| Carlsbad NE | 92010 | |||
| Carlsbad SW | 92011 | |||
| Del Mar | 92014 | |||
| Encinitas | 92024 | |||
| La Jolla | 92037 | |||
| RSF | 67+91 | |||
| Solana Bch | 92075 | |||
| West RB | 92127 | |||
| RP | 92129 | |||
| Carmel Vly | 92130 | |||
| Scripps Rch | 92131 | |||
| Total | All |
The average list pricing shows how insane most active (un-sold) sellers are – they are way above market. What is worse is that no one really knows what list price it would take to be attractive to a buyer – all we know is that their current list price is wrong.
Take a good look at 92009, 92010, 92129, and 92131 – areas where the current average list pricing is within striking range of the last two Octobers, yet a lot of homes not selling.
Jim looking at the numbers it does seem to show one other thing to me. The total number of sold property (300/269) and ($368/$334) price/sf is reflected of the actual market condition correct. So aren’t there just so many organic sales possible no matter what price the homes are offer at. Look at 92307/ RSF/92014 home for sale prices are 20-40% above actual sold comp with the numbers of sold home the same YOY. I think there still would not be many more sales if these sellers drop there price closer to the current market. Maybe there are not enough people with income and or down payment to purchase much more of this inventory. There more sellers chasing far less buyers in these zip code at $366+/sf price point no matter the list price. You still must look at demographic and jobs, there just some many high income earner looking to buy or trade up at any giving time in San Diego. However you are right if it is price right then you should get one of those buyer in the door. If it’s to high you probably will not get even lookers.
In OC , it is still about 10% to 20 % too high especially for the older houses along the coast.
Even those about 20 to 40 years old house,they are all so dated. I see first time buyers ( with job) thinking it is the bottom; borrowing money from mom and dad and struggling to jump thru various hoops to buy 2000ft2 plus house here for $700K.
You still must look at demographic and jobs
I’ve never met Mr. or Mrs. Demographic, but I’ve heard a lot about them. Can you pass along my number, I’d like to sell them a house!
There are plenty of all-cash, and big-down-payment buyers that thwart the jobs argument.
I’ll cover them next, but for starters there were 50 of the 269 sales that were all-cash.
Sellers losing their jobs, and not able to make payments? They get a year of free rent to figure it out. If they want to stay in the same area, renting isn’t cheap in any town mentioned above, so either they need to leave town, or buck up.
I can only give you a single anecdotal story, but a friend of mine lost his job and took a much lower paying one earlier this year; he stopped paying his mortgage last summer.
He moved to Utah about 2 months ago when he couldn’t find a better job. His living expenses are about 1/2 what they were. He misses the beach.
I know lots of people that want to buy, are working, but are priced out. I know owners that would like to move but are underwater. I also know buy and bailers that have no problem screwing others as long as they get what they want.
With banks not foreclosing the market is at a stand still.
If the banks don’t start foreclosing then more and more homeowners, especially those underwater, will come to the conclusion that there’s no consequence for not paying their mortgage and will stop paying the banks.
What they really need to do to fix this is to fast-track foreclosures. If they could streamline the process from start to finish then the economy will get out of this ‘housing crisis’ much faster.
What we have now is an hemophiliac-economy constantly being poked with a needle.
I don’t think I would call this a double dip … more like a continuous decline. Just a casual glance at the numbers tells me that prices are down around 10% from this time last year. This is pretty much exactly what I am seeing in my neck of the woods as well. Furthermore, the buyers are being very selective and pretty much ignoring the inferior properties even if they are attractively priced.
Very interesting indeed.
My wife and I were looking at a home near our area.
The home was sold in 2005 to knife-catchers for $785K and now is on the market for $649K.
The area commands about $380/sqft so we were going to put in an offer for it at $600K. Our agent spoke with the seller’s agent prior to putting in an offer and the sellers agent stated that ALL offers were over asking
I didn’t believe it. So I asked another agent to look into it (without my agent getting involved as WE found the house anyway). The second agent I spoke with also contacted the seller’s agent and came back to us and said there was an accepted offer in excess of $690K.
I STILL didn’t believe it…I felt the seller’s agent was lying for some reason…a 1600 sqft home with $40K over asking bids? In this market? They’re nuts.
So I contacted yet another agent a few days later and he also contacted the seller’s agent….he came back with some information stating that that an “alleged” accepted offer was for $629K.
When I heard this, I was extremely pissed. Because we had a good shot at this house.
So I went back to our original agent and told him what I’d found out. He didn’t believe me and was curious as to where I got this information from. I told him that it wasn’t important…what was important was that the seller’s agent TO ME was lying through her teeth to garner bids and overbidding.
The seller’s had one stipulation on the sale…they needed to find a replacement home prior to selling the home…a fake excuse if you ask me.
As it turns out, the BUYERS whose offer was “accepted” canceled the deal and the house has since been removed from the market because, according to the seller’s agent, the sellers now want to first find a replacement home before putting the house on the market.
I smell a rat….I personally think the best offer the sellers got was $629K and they go pissed and removed the home from the market. Our agent has no way to prove what part of the story is being told truthfully by the seller’s agent but the whole thing smells like a scam to either make people overbid (I don’t personally believe there were any over-list offers) or the sellers were simply testing the waters and the buyers canceling never existed.
Noz,
I’ve experienced the same type of thing several times. It’s funny that you turned the tables on them by using several different listing agents. Realtors are funny if they smell desperation in any form they’ll try to exploit it. Ethics and who is paying them for their services don’t always matter. Jim is different I think that’s why people come here.
Noz, sounds like you should’ve asked Jim to be your agent…
I’m not local to Jim so Jim would not be able to help unfortunately.
*BIG* move up in interest rates today. I am assuming that will hurt market long term as it will make homes less affordable. Short term, do you think it will push buyers off the fence and spur them to finally buy?
From today’s U-T:
San Diego housing faces 8.5% price reduction
http://www.signonsandiego.com/news/2010/nov/15/san-diego-housing-faces-85-price-reduction/
No it won’t push buyers off the fence….why should it? Prices are still too high. The price of the home is far more important than the interest rate if you ask me.
Better to buy a cheaper home at a higher interest rate than a more expensive home at a lower one.