Even though the inventory of decent buys seems to get more bleak with every passing day, the number of closings have been holding up pretty well around North San Diego County’s Coastal region.
With all the commotion in the stock market, there is sentiment on Wall Street that now is a bad time to sell……stocks.
Don’t let that spill over to decisions about selling real estate around NSDCC – we need inventory!
Detached closed sales between August 1-15:
| Year | # of Sales | Avg $/sf |
| 2005 | ||
| 2006 | ||
| 2007 | ||
| 2008 | ||
| 2009 | ||
| 2010 | ||
| 2011 |
For those potential sellers who might think, “maybe I should wait until things pick up a bit”, let’s note that 30-year mortgage rates are now the lowest they have been in 50 years, and that the media will insist on pushing more economic drama. When Europe takes its next tumble, it’ll put a chill in the market here.
That’s a huge spike in price/sqft.
Looks like a big change in the mix from big bombers in the boonies to smaller houses in better locations.
Do you have the data on the median square feet and geographic location shift between 2009 and 2011?
All medians:
2009 – $802,003, 2,586sf, 55 DOM
2010 – $852,000, 2,593sf, 32 DOM
2011 – $837,500, 2,605sf, 53 DOM
Geography?
Let’s take Carlsbad out of the equation – sales and $/sf for Cardiff to La Jolla between August 1-15:
2009 – 49, $420/sf
2010 – 60, $463/sf
2011 – 60, $538/sf
Granted, it’s only 60 sales, but that’s a 28% increase in avg. $/sf in the last two years.
Carlsbad:
2009 – 43, $278/sf
2010 – 37, $269/sf
2011 – 38, $275/sf
According to a research note published this week by Credit Suisse, first-time homebuyers are capitalizing on ultra-low mortgage rates. Analysts who recently visited multiple new home communities found “sharply diverging trends at different price points.”
Despite an uptick in new home cancellations in mid- to higher-priced homes, “At the low end, we saw buyers taking advantage of the strong affordability, proceeding with the purchase,” lead analyst Daniel Oppenheim wrote. “In most cases, this decision was based on the affordability vs. renting.”
The analysts observed several examples of buyers combining a Federal Housing Administration-insured mortgage with the California Homebuyer’s Downpayment Assistance Program, which enables a buyer to purchase a home with the greater amount of $1,000 or 1% of the purchase price.
“We’re fully supportive of efforts to encourage homeownership, but we wonder if programs to allow down payments of just 1% are actually helpful to either the borrower (the homebuyer) or the lender,” Oppenheim wrote. “In many cases, owning is less expensive than renting on a monthly basis, but looking just at the monthly payment does not give adequate consideration to the risks involved with owning rather than renting.”
“Our main concern is that in an environment of job losses and falling home prices, many of these buyers would likely have difficulty with their mortgages,” he continued.
From your figures, median $/sf
2009 – $310
2010 – $329
2011 – $321
That paints a different picture than the average (arithmetic mean.) Seems to fit with the “sharply diverging trends at different price points.”
If you’d like to point out those sharply diverging trends at different price points around NSDCC, feel free.
I pay pretty close attention to 92126 just because I like it as a good middle of the road gauge. It’s similar to 92117 which would be probably as good but volume is better in 92126. What I’ve seen so far this year is slightly weaker sales and slightly weaker prices compared to last years tax credit stimulus but nothing to get excited about. June 2011 was an odd ball with very light sales but it picked back up in July so I’ll just call it an outlier.
Biggest difference is months of inventory which went from about 2 months last year to about 6 months this year. The buying pool seems to have thinned from I want/need any house to I need the right house at the right price. I’d call the mid/low market normal at this point. Certainly cooler than last year’s, hot, beat the tax credit deadline, but nothing like 2008.
I think the limiting factor is jobs and downpayments. It takes a while for buyers to shift to 10% down 30% front end ratios from 0% down 40-50% front end ratios. You might want a house but it takes some time to save $30-50K if you were expecting to buy with < $10K in that <$400K market.
Interesting picture. Does it imply just holding on or just about to drop?
I was just pointing out that the luxury end of the market appears to have rising prices y-o-y while the middle pencils out flat to slightly down. That is in line with the statement from Credit Suisse that they observed different trends at different prices. Whether the divergence should be characterized as “sharp” or not is not central to the question. As long as the transaction rate stays in a normal range, the market is healthy.