The spring selling season has certainly been lively – there were healthy increases in the number of sales around most areas in 2Q12. But in the end it might just look like another bounce along the bottom for pricing, as measured by the average $/sf.
Here are the second-quarter detached sales, and average cost-per-sf:
| Town or Area | |||
| SE Carlsbad, 92009 | |||
| SW Carlsbad, 92011 | |||
| Encinitas, 92024 | |||
| RSF, 92067/91 | |||
| Del Mar/Solana | |||
| Carmel Vly, 92130 | |||
| NSDCC |
If the 2012 market does the same as last year’s we should see it taper off from now until January.
prices look kind of flat from that data.
Agreed, and I’ll add the median prices later which may show a bigger pop but are less reliable as a real indicator.
Aren’t buying frenzies usually an indication of a top in both sales and prices?
Yes, looks more and more like a standoff with both sides entrenched. Lower inventory would normally mean a decrease in supply which given a constant or even rising demand an increase in prices.
The problem with this analysis is that demand is clearly very price sensitive so the demand falls off dramatically with even a slight uptick in prices just like the supply curve fell dramatically earlier this year when prices ticked down last winter.
The perturbation in interest rates has not been enough to get us out of this holding pattern but seems to have put a floor under pricing. It will likely take a huge jump in demand driven by fundamental economic improvements to start a sustained upward trend in prices.
Hello again cdcrez!
Maybe in the past, but these days, who knows?
The shortage of well-priced, quality inventory is a big hurdle to figuring this out. Is there demand waiting on the sidelines, but not obvious because there’s nothing good to buy for a decent price?
I think there is.
It is being stymied further by the increasing arrogance of listing agents. Here are some of the examples of the barriers to sale:
1. It is common now to note in the MLS that the home doesn’t have a lockbox, when it does.
2. More listing agents want their lenders to screen the buyers prior to showing the home.
3. After a listing is inputted, there are no showings for X days, and can be 1-2 weeks. Then they note the day that they will be entertaining the offers, which is another 5-10 days later. Buyers want to buy a house today.
4. Terrible photos, if any. How hard can it be?
5. Arrogance throughout the remarks, like they are doing you a favor.
6. There is a field where the directions to the property can be entered, which can come in handy at the last couple of turns. But many LAs will input “mapquest” or “google maps”, or the all-timer last week “use your GPS, it’s 2012”.
7. See a hot new listing? Try to get somebody on the phone who can answer specific questions about the property or making an offer. It is nearly impossible.
Jim,
What’s the going rate for homeowner’s insurance around NCSD?
o/t. I don’t know if you saw this article from “Poor Gretchen” in yesterday’s NYT or not.
http://www.nytimes.com/2012/07/15/business/for-many-home-equity-loans-payment-shock-is-near.html
She’s decrying the fact that banks who wrote down 1st mortgages weren’t required to write down 2nds (including HELOC’s) at the same time:
“The negative equity position of many borrowers would be dramatically improved if the second lien was eliminated or reduced more in line with the seniority of the lien,” Ms. Goodman told Congress. “Indeed, loan modification programs would be markedly more successful if principal reductions were used on the first mortgage and the second liens were eliminated completely.”
But that didn’t happen. The Treasury didn’t force the banks to write down these loans, and billions in balances remain outstanding.
Payment shock for borrowers is nigh. For those who are already struggling to pay their mortgages, this is an unwelcome burden. And it is one that might have been avoided.
I can’t decide whether I want to bang my head against the wall or box Poor Gretchen’s ears more, if Tanta were still here, I’m pretty sure I know which option she would counsel.
Go ahead deadbeats, keep the boats, SUV’s, RV’s, pools, and vacations for free! The dumb responsible suckers can pay for those too.
Jim,
You mentioned photos. I’ve noticed a lot of listings where the photos aren’t just poor, they seem to be deliberately so. What is going on? Are the realtors trying to make the house look bad on purpose? Are they all foreclosures that the realtor is trying to swing to a friend? Even “reputable” realtors are doing it, like this one for example…
http://www.sdlookup.com/Pictures-120022851
There are too many examples for it to be unintentional.
are lowballers pretty much out of the game now?
For everyone looking to buy now is the time to start looking more actively. Also keep tabs on the properties that delist without a sale.
The properties that haven’t sold by now are going to have to cut on prices if they want to sell before the school year.
Just like spring / early summer is Sellers time. Now through the winter is the buyers time.
are lowballers pretty much out of the game now?
There’re around but sellers are over-confident. Look how nasty this election is getting, we could be in for a long cold winter for sales.
LOL, “use your GPS, it’s 2012?…
Technically it should say smartphone. But seriously, it would be asking too much for LAs to actually do their job, right?