While it seems like the local market has been cooking this year, when you look at the basic stats it’s hard to be impressed. Here are SD County detached-home sales for Jan 1 to Oct 14th:
Year
# of Sales
Avg $/sf
DOM
2011
16,775
$237/sf
75
2012
19,263
$238/sf
72
Sales are up 15% this year, but the avg. cost-per-sf and days-on-market are similar – ho-hum, right?
The reason it feels so hot is because of the speed in which the attractively-priced new listings are finding a buyer. There isn’t a way to research previous time periods, but this looks spectacular compared to the 72 DOM average:
SD County Detached-Homes Listed Between Sept. 15-30:
Total Number of Houses Listed between Sept. 15-30: 1,263
Number Already Marked Contingent, Pending, or Sold: 655
More than half (52%) of those new listings have already found a buyer! It shows how efficient the market is when more than half of the sellers can get the price right in the first 2-4 weeks.
Frank Lloyd Wright (born Frank Lincoln Wright, June 8, 1867 – April 9, 1959) was an American architect, interior designer, writer and educator, who designed more than 1,000 structures and completed 500 works. Wright believed in designing structures which were in harmony with humanity and its environment, a philosophy he called organic architecture. This philosophy was best exemplified by his design for Fallingwater (1935), which has been called “the best all-time work of American architecture”. Wright was a leader of the Prairie School movement of architecture and developed the concept of the Usonian home, his unique vision for urban planning in the United States.
His work includes original and innovative examples of many different building types, including offices, churches, schools, skyscrapers, hotels, and museums. Wright also designed many of the interior elements of his buildings, such as the furniture and stained glass. Wright authored 20 books and many articles and was a popular lecturer in the United States and in Europe. His colorful personal life often made headlines, most notably for the 1914 fire and murders at his Taliesin studio. Already well known during his lifetime, Wright was recognized in 1991 by the American Institute of Architects as “the greatest American architect of all time.”
I’m not sure if this displayed previously, but it was researched by one of the big data gatherers (initials C-L) about the Carmel Valley zip code 92130:
Total number of homes in that zip code: 14,331
Total number of Neg Am loans: 282
Total number of SFRs with neg-am: 170
No wonder we haven’t seen many foreclosures around CV!
There have only been 15 detached REO listings close this year in the 92130, and only one was over $1,000,000 – the one we saw in Collins Ranch for $1,061,000. This is a zip code whose average sales price this year is $1,023,763, and 132 of the 373 sales (35%) have closed over $1,000,000.
When the commission war starts, how will these guys survive? They are heavily in debt, and now that they are slaves to the shareholders they won’t be able to adjust. Why do you think they IPO’d?
Hat tip to daytrip for sending this in:
Realogy (NYSE: RLGY) dared to challenge the choppy IPO waters by going public today.
It’s winning.
Realogy may not ring a bell, but you may be familiar with many of its real estate services. This is the company behind Coldwell Banker, ERA, Century 21, Sotheby’s International Realty, and several other providers of real estate franchising, brokerage, relocation, and title services.
It’s been a well-received debut. Realogy was expecting to sell a whopping 40 million shares between $23 and $27 apiece. Underwriters were able to price the deal at the high end of that range last night, and that’s good news for Apollo Global Management, which took the company private in a leveraged buyout five years ago.
However, even $27 for Realogy wasn’t enough. The stock opened 22% higher at $32.85 this morning, moving even higher later in the day.
Realogy’s financials aren’t befitting of a hot IPO. Revenue clocked in flat last year at $4.1 billion and adjusted EBITDA declined by 11%.
For a company that generated 72% of its revenue last year from gross commission income, one would think that home prices inching higher this year and an inviting mortgage market given dirt cheap borrowing rates would be major growth catalysts.
Well, that is starting to play out this year, but perhaps not as vividly as housing bulls would expect. Revenue climbed 9% through the first six months of 2012, and adjusted EBITDA climbed 14%. However, Realogy is still posting losses, weighed down by the heavy interest expenses incurred given its highly leveraged ways. Today’s IPO will help Realogy pay down some of that burdensome debt, but this is still an offering that can quickly sour if interest rates start heading higher and the real estate resale market cools down.
Naturally, the market doesn’t see it that way. It has seen shares of leading homebuilders soar. It also only helps that dot-com real estate debutantes have also been scorching hot. Last month’s IPO of Trulia and last year’s public debut of Zillow have been winning deals at a time when many prolific Internet companies in areas outside of real estate have suffered. As a bonus, one of this year’s hottest stocks has been Ellie Mae. The mortgage industry software provider has seen its stock pop nearly fivefold this year on a boost in mortgage originations.
Realogy will bear watching, especially if the resale market stays hot. However, the market’s euphoric reaction to a company that has so much to prove — and so much red ink to shake — seems to suggest that the exuberance for fresh real estate plays may be problematically misplaced.
Competition for lower-priced homes in California is so hot that the number of cheaper homes available for sale has sunk more than 40% in the last year, pushing out many would-be buyers.
Homes that sold for $313,200 or less were the most competitive type of home nationally, but nowhere did inventory in that price range drop more than in the Golden State, according to a report released Thursday by real estate website Zillow.
In some parts of the Inland Empire, the supply of homes on the market is down to about a month’s worth, real estate agents say. Economists typically consider a six-month supply to be a healthy market.
The decline in homes for sale is frustrating many people interested in jumping into the housing market — home shoppers tantalized by the drop in prices and record-low mortgage interest rates.
Larry Rogers of Riverside, for instance, began the year with what he felt was a solid path toward retirement: buy two homes in the Inland Empire, pay them off before his golden years and live, in part, off the rental income. With a contractor’s license, a well-established business, plenty of cash and a high credit score, financing a home is not a problem, he said. The problem is finding one.
Rogers said he has gone into escrow twice and lost out both times, as other buyers have been willing to pay more. He has been shocked by competing investors paying $75,000 to $100,000 more than what he has estimated some homes to be worth.
We’ve had a truckload of more sales recently, but statistically the pricing hasn’t been rising – the average cost-per-sf of summer detached-home sales around NSDCC is trending flat to slightly downward year-over-year. Apparently, buyers have engaged mostly due to the low mortgage rates, but they are still reluctant to pay more than the last guy – and we know sellers are tempting them!
Here are the NSDCC detached-home # of sales, and cost-per-sf between June 1st and Sept. 30th:
Price Range
2010#
Avg. $/sf
2011#
Avg. $/sf
2012#
Avg $/sf
0-$699,999
289
$303/sf
337
$288/sf
375
$287/sf
$700-$999,999
285
$343/sf
285
$329/sf
383
$327/sf
$1,000,000+
335
$471/sf
328
$521/sf
421
$487/sf
It’s incredible to see how sales jumped 31% on the higher-end, yet the average cost-per-sf hasn’t risen. It should make it easy for sellers – if you are willing to sell for the same amount as the last guy, you have it made.
The median price doesn’t matter much in the closed-end ranges, you know that they will be around the middle of the range. What has happened to the median stats in the million-dollar-plus club?
$1M+ Sales
2010
2011
2012
Median SP
$1,385,000
$1,425,000
$1,425,000
Median $/sf
$399/sf
$411/sf
$399/sf
The uniformity is incredible, plus let’s marvel at the fact that there were 421 sales over $1,000,000 in a four-month period this year! There haven’t been that many million-dollar sales in the same summertime period since 2007 – which was the peak.
Transparency deserves the credit for prices staying stable. With the internet making it easier than ever for all players to determine values, buyers are anxious to pay a fair price, but that’s it.
The number of SD properties foreclosed in 3Q12 were less than half of the number of foreclosures in 3Q10, but the ratio of third-party buys compared to those going back to the beneficiary has been changing.
Two years ago, 76% of the trustee sales went back-to-bene, but in the most recent quarter that number was only 57%. The quantity of third-party buys has remaining fairly constant, and would probably be higher if the banks put more properties out for sale. There appears to be quite an appetite:
Third-party bidding looks intense – rising 16% from the opening bid, and ending up within 9% of current value. Wow! Doesn’t that have to be putting pressure on retail pricing to rise?
If so, where are the future foreclosures that might feel some upward pricing pressure from flippers? The lower-end neighborhoods, where it’s so competitive that flippers could get away with adding a little extra mustard to their list price:
When you read in a listing, “Hurry, this won’t last long” and “Priced below market for quick sale. Reviewing offers 10/15/12”, does it make you want to hurry on over, or forget all about it? Though this agent is a nice guy, this verbiage will make most buyers want to throw him in the huckster bin.
Here’s a year-over-year review of the summertime median prices of detached-home sales between June 1st and September 30th in the individual areas of NSDCC.
Town/Area
2011 #Sales
Median SP
Avg. $/sf
2012 #Sales
Median SP
Avg. $/sf
Cardiff
40
$821,500
$440/sf
14
$660,000
$417/sf
NW Carlsbad
63
$555,000
$306/sf
70
$585,000
$331/sf
SE Carlsbad
197
$695,000
$246/sf
227
$699,434
$256/sf
NE Carlsbad
57
$522,000
$238/sf
52
$539,950
$237/sf
SW Carlsbad
64
$732,500
$292/sf
121
$734,900
$278/sf
Carmel Valley
145
$900,000
$332/sf
210
$885,000
$336/sf
Del Mar
65
$1,271,000
$734/sf
62
$1,474,306
$693/sf
Encinitas
139
$750,000
$369/sf
175
$800,000
$373/sf
La Jolla
90
$1,909,164
$627/sf
122
$1,250,000
$569/sf
RSF
64
$1,850,000
$414/sf
91
$2,225,000
$441/sf
Solana Beach
26
$907,500
$496/sf
35
$1,100,000
$460/sf
Scripps Rch
117
$650,000
$257/sf
126
$687,000
$264/sf
W. RB 92127
163
$715,880
$257/sf
199
$705,000
$249/sf
RB 92128
135
$487,000
$255/sf
209
$505,000
$263/sf
RP 92129
112
$548,500
$264/sf
160
$555,000
$257/sf
Both of these pricing measurements are prone to bounce around with the smaller samples. The most impressive numbers are the increased sales, Y-O-Y:
SW Carlsbad: +89%
RB 92128: +55%
CV: +45%
RP: +43%
RSF: +42%
La Jolla: +36%
Those are incredible jumps in the affluent areas. Apparently those with money are proceeding.
Competition for lower-priced homes in California is so hot that the number of cheaper homes available for sale has sunk more than 40% in the last year, pushing out many would-be buyers.
