“How’s the market?”
It depends where you are looking! Consider these three popular areas in North SD County Coastal:
Carlsbad, 92009 detached:
Encinitas, 92024 detached:
Carmel Valley, 92130 detached:
In SE Carlsbad and in Encinitas, buyers have been reluctant to chase the higher list prices.
But in Carmel Valley, people are more willing to pay what it takes to get in!
JTR – what I find most “impressive” is how quickly sellers in 92009 reacted to demand and dropped their prices between summer 2010 and Feb 2011. Typically sellers are more slow to react.
Must have been a spike in motivated sellers vs standard sellers.
Agreed, and unusual that they moved downward so quickly after the spike in sold pricing.
It’s probably an indicator of quality – all of the best-quality homes sold in spring 2010, even if buyers had to pay a little more.
Then the inferior homes had to tank on LP to garner an audience – apparently the sellers knew what they had!
But what looks like a dump is really just getting back to normal. My rules-of-thumb:
92009: $250/sf
92024: $300/sf
92130: $330/sf
Dear Jim,
How will your market fare without buyers having access to the Mortgage Interest Deduction? Are you willing to find out? Even if we all agree that serious debt reduction considerations need to be made by Congress this year, do you think that the housing market can withstand further significant disruption that prevents buyers from entering the market?
Many of your fellow REALTORS® have already contacted their Representative in Washington, D.C. to let them know that they expect Congress to Preserve, Protect and Defend the Mortgage Interest Deduction (MID).
Taking action is easy. Just click on the link below or on the blue “Take Action” button to the right.
When you get to the take action form, it should be pre-populated with your name and contact information. Our advocacy software will automatically connect your letter to the appropriate Member of Congress based on your address. All you need to do is click on the “Send this Message Now” button.
If you wish to personalize the letter you are free to do so but it is not required. It is that easy. It takes only two clicks and no more than one minute of your time.
The housing market is slowly stabilizing and slowly improving, but the housing market crisis won’t end if we gut one of the most sacred tenets of achieving the dream of home ownership. Please act NOW and tell Congress to Preserve, Protect and Defend MID.
As REALTORS®, we need to come together and make our voice of experience heard on Capitol Hill. Please contact Congress today.
Thank you for your support,
NAR Government Affairs
Jim, about the $250/sf for 92009…Is it much cheaper for the homes in that zip that are in the San Marcos school district? Or now that SM schools have improved is it more even with the Cbad and Encinitas zones?
The 92009 has all three school districts – Bressi is Carlsbad schools – so we’d have to break it down further to know for sure.
But here’s a simple comparison for this year’s detached closings:
92009: 211 sales averaging $255/sf
92078: 181 sales averaging $202/sf
(92078 is S. San Marcos)
I think that Duck Pond Ranch in 92130 really pumped the sold number Jim.
On the letter from the NAR, consider that the mortgage interest deduction is a subsidy for the coasts from the interior. For example the median home price in Indianapolis is $123k Assume then a mortgage of $110k, which today has interest of less than 5k. For a married couple with just taxes as a deduction it is likely that they will barely if at all clear the standard deduction. (maybe saving $200 from the mortgage interest deduction) while on the coasts with $450k and up mortgages the interest is 20k or so which is likely mostly above the standard deduction. However the media don’t talk about this hidden subsidy for the coasts.
Lyle: there is no hidden subsidy for the coasts. California gets 78 cents back from every dollar it sends to DC. Indiana gets 1.05 for every dollar it sends. We’re supporting them. http://www.visualeconomics.com/united-states-federal-tax-dollars/
Joe- great info regarding tax allocation, thanks.
Elimination of the mortgage deduction will not occur….it’s political suicide….unless they cut tax rates down to 20% for all brackets.
What I do see happening is lowering the $1M mortgage limit to $729k or something like that. $500k is too low, since too many average coastal properties easily clear $500k.
Agreed with Jeeman….they will chip away at the limit or leave it at $1mm BUT gradually lower the credit from 100% down to say 25% for every dollar over $500k or so. Thus the say a 25% credit for interest expense from $900k -$1mm.
Thus they can claim the headline that we didn’t lower the MID…
It is generally accepted that the tax code needs to be re-written and loopholes eliminated. But every interest group claims that their loophole, be it tax break or subsidy, is critical for the economy and is sacred. The list is long. Realtors, agriculture, oil and gas, ethanol, insurance, financial institutions, elderly, R & D, etc.
I like to think that sooner rather than later, all the sacred cow tax provisions are taken out and eliminated in one fell swoop as part of a real deficit reduction plan. I can dream, can’t I?
Don’t property taxes eat up most of the MID. It seems like it’s trading federal taxes for state taxes when you get down to it. I suppose you could say a renter indirectly pays for property taxes.
Americans need to start understanding that government borrowing, now 40% of the US Federal Budget, is really just deferred taxation. In effect, your government is “already” taxing you at almost twice what you think you are paying on your tax returns…
And for those of you who don’t pay anything (currently 50% of Americans), the beauty of government borrowing is that you can’t escape, you are just as liable as the rich guy in La Jolla… all of you are on the hook for the debt.
Sleep tight.