The active listings of detached homes from La Jolla to Carlsbad:
| Date | NSDCC Actives | Avg. LP-per-sf |
| Jan 14 | ||
| Feb 4 | ||
| Feb 10 | ||
| Feb 25 |
There have been 179 new listings, and 176 new pendings since February 10th (not counting contingents) – they’re selling as fast as they are coming on!
There is not housing bubble. But of course you could be excused for thinking that there is, if you live in Southern California. The real estate market here is distorted, with supply and demand out of whack.
The Great Recession meant that we didn’t build any houses for four years. The supply of “distressed” properties — foreclosures — is getting tight, because banks are working through their backlog and because they don’t want to flood the market and crush what is for them a good thing: rising prices.
But rising prices are a mixed blessing. In some parts of Southern California, everyday buyers who need a mortgage are getting priced out by all-cash buyers and investors looking to snap up properties at a reduced price, relative to what they hit during the peak.
This has led some market observers to say that we’re dealing with a housing bubble in the region. But that’s not really the story, though there are some micro-bubbles.
But if you look at the Case-Shiller home price index, it’s clear that, although prices have trended up steadily in Los Angeles County since the beginning of last year, the region isn’t seeing a price spike on the order of what’s happening in, for example, Phoenix, where prices have surged by double-digits.
“We’re not at a bubble level yet,” said Terry Sandven, Chief Equities Strategist for U.S. Bank Wealth Management.
He added that “housing is a bright spot in the economy,” but he echoed an observation that has now become commonplace when studying the Southern California market: inventory is tight. “It’s at 1990s levels,” he said.
Sandven said the overall outlook for housing is favorable.
The National Association of Realtors has pointed out that the inventory crisis will eventually ease, bringing supply and demand back into balance.
But before that happens, housing starts need to pick up — and they’re currently running well below the 1.5 million-per-year average they’ve achieved over the past four decades. What will close that gap is a more free flow of credit — both to consumers and to homebuilders. But it could take a while for that to develop, given that banks have been much stingier with loans since the financial crisis.
From: http://www.scpr.org/blogs/economy/2013/02/25/12665/no-housing-bubble-repeat-there-no-housing-bubble/
We have a winner for the RSF Bank-Deal contest!
LP = $850,900
SP = $980,000
Congratulations to James D, who guessed $982,000!
James won 4 field-level tickets to a Padres game!
https://www.bubbleinfo.com/2013/01/29/rsf-bank-deal-contest/
http://www.sdlookup.com/MLS-130004794-5340_Linea_Del_Cielo_Rancho_Santa_Fe_CA_92067
The agent added an addendum later stipulating that the bank was only considering cash offers with a 10% good-faith deposit and no contingencies.
Many of the ivory-tower types are hoping to make sense of the now nationwide housing-inventory shortage, and predict the next tsunami.
http://www.businessinsider.com/us-housing-inventory-shortage-2013-2
The housing inventory is at, or below, where it was in 2003-2005, the peak of the boom era. Around here, the prices are at, or above, what they were during the same period.
Yet people don’t want to sell. Why not? A simple explanation:
The housing needs of baby-boomers have peaked.
In the mid-1990s, boomers were 30 to 50 years old, and coming into their best income-producing years as the previous housing bust was bottoming.
Then we hit the jackpot with the Taxpayer Relief Act of 1997, which allowed those who had lived in their house for two out of the last five years to sell and pocket their gains tax-free (up to $500,000 per couple).
Combine that generous tax relief with baby boomers hitting their peak consuming age, and you have the greatest real-estate boom in history between 1997 and 2005 – this graph shows how tight the inventory was then:
But in spite of the mortgage industry goosing the market with exotic financing, the boom couldn’t last forever at those prices/monthly payments.
Some of the drop-off was caused by baby-boomers already being satisfied. By 2013, boomers are settling down at 50-70 years old:
We will probably see the inventory shortage last another 5-10 years, until the elderly or their families start the Baby-Boomer Liquidation sales.
There are 77 million boomers working through the cycle, which will likely be strung out for as long as possible – when was the last time you saw a baby-boomer jump up and say, “I feel like moving today!”? Instead, baby-boomers will age-in-place while enjoying their golden years.
For many the golden years won’t be as golden as they thought, but they will delay selling the family home as the last resort.
It will probably be a fortunate thing that the lenders/government allowed defaults to drag out – we will need their REO and short-sale listings now!
Expect the tight inventory to continue until the voracious housing demand is curbed by mortgage rates rising sharply, or by the next recession.
An assortment of clips from around town:
Fewer houses are coming on the market, and sales are rising!
North NSDCC (Cardiff, Carlsbad, and Encinitas) Jan 1 – Feb 20:
| Year | New Listings | Closings |
| 2010 | ||
| 2011 | ||
| 2012 | ||
| 2013 |
More sales than new listings?? Will higher prices lure more potential sellers into the market? It hasn’t yet, even with Y-T-D sales prices up 6% to 13%, we’re seeing fewer, not more listings.
South NSDCC (La Jolla, Del Mar, RSF, SB and CV) Jan 1 – Feb 20:
| Year | New Listings | Closings |
| 2010 | ||
| 2011 | ||
| 2012 | ||
| 2013 |
Close, but not quite more sales than new listings – and this is an area where the average sales price was $1,584,000!
These are among the oldest houses in Carmel Valley, but at least they are relatively cheap. This listed on January 16th on the range $709,000-$749,000, and closed yesterday for $759,000 FHA:
It sold for $295,000 in 1994, then $387,000 in 1998, and $819,000 in 2005.
U.S. home prices rose again in January. We’re witnessing the fastest pace of price growth since July 2006, which was during the housing bubble.
From Zillow:
Zillow’s January Real Estate Market Reports, released today, show that national home values rose 0.7% from December to January to $158,100. January 2013 marks the 15th consecutive month of home value appreciation.
On a year-over-year basis, home values were up 6.2% from January 2012 – a rate of annual appreciation we haven’t seen since July 2006 (when the rate was 7.5%), before the peak of the housing bubble.
The Zillow Home Value Forecast calls for 3.3% appreciation nationally from January 2013 to January 2014. Most markets have already hit a bottom – with only 9 out of 260 not projected to hit a bottom within the next year – and 78 out of the 260 markets covered are forecasted to experience home value appreciation of 3% or higher.
Read more: http://www.businessinsider.com/zillow-january-home-prices-2013-2#ixzz2LdOpRgiD
Compare to the San Diego Metro area (+12.9% Y-O-Y):
How are the local public high schools faring?
Ratings from www.greatschools.org
| High School | 2012 API Growth | GS Rating | #Students |
| Canyon Crest | |||
| Torrey Pines | |||
| Westview | |||
| San Marcos | |||
| La Jolla | |||
| San Dieguito | |||
| Carlsbad | |||
| La Costa Cyn |
“Our ratings provide an overview of a school’s test performance by comparing the school’s state standardized test results to those of other schools in the state. Ratings are given for each grade and student category (gender, ethnicity or other student group) for which test results are available. Keep in mind that when comparing schools using GreatSchools Ratings, it’s important to factor in other information, including the quality of each school’s teachers, the school culture, special programs, etc.”
The U.S. News & World Report also ranks high schools nationwide. Here are links to the San Dieguito, Carlsbad, Poway, and San Marcos High School Districts.
A typical mcmansion foreclosure in southeast Carlsbad. There are three pending sales listed over $1.1 million, including the house next door:
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
