Around Carmel Valley, 92130 it looks like we regained the ground lost over the last couple of years, and buyers are back to paying $340/sf.
On the MLS, there are 72 active listings, and their median list price is $1,422,999 – with only 18 houses for sale under $1,000,000!
The median list price of the detached homes sold over the last 90 days is $922,000, with 64 of 111 sales under $1,000,000.
The lower-end is cooking, yet seller enthusiasm is causing more and more to push into the higher ranges in hopes of striking it rich:
Buyers were probably resigned to paying a little more – will they break out of the range and follow sellers up the ladder?
It happened like that in 2003, and we saw 20% appreciation in one year. It could happen again, and if it does, you’ll see it in the prime areas!
Other areas:
SE Carlsbad sellers caught on a little later, but are on the same path – and the Encinitas graph was very similar to this too:
It means that buyers will either have to step up further, or we’ll be experiencing the Big Glut over the next few weeks.
Rancho Santa Fe knows the feeling – they always have a glut of homes for sale. In 92067 there are 203 homes for sale today, with an average market time of 131 days, and there were 13 homes sold in the last 30 days:
Will all areas end up looking like Rancho? Yes, it is very likely that sellers will price too high and not adjust, thuinking that the selling season is coming later to bail them out. They are already way ahead of buyers, and only the premium properties have a chance of selling for retail-plus.
Statistically it will look like 10% to 20% appreciation of the few homes selling!
Redfin allows use of their graphs.
Price to Rent and Price to Income ratios reverted to mean around 2 yrs ago without the overshoot expected by many and have bounced along since. I doubt we’ll see prices increase to anywhere near where these ratios were at the peak.
Price to Rent and Price to Income ratios reverted to mean around 2 yrs ago without the overshoot expected by many and have bounced along since.
However, in San Diego house payment to rent and house payment to income was at historic lows 2 years ago. In fact, the house payment to rent ratio dropped below 1. Low interest rates kept price to rent and price to income from overshooting, but it certainly overshot when you look at it from a monthly payment standpoint. Interest rates have only gotten lower since then. I understand that interest rates will likely rise in the future, but for those buying on fixed rate loans it’s not much a surprise that housing prices went up when you couldn’t rent a house in the same neighborhood for cheaper.
I’d certainly expect sales number to dwindle before you see prices move to the downside. As long as the closed sales numbers stay strong you’ll see prices increases even if they start leveling out a bit. I do think some of the stuff going on is a result of faith in the fed’s ability to produce inflation and keep rates low. If that were to come into question for any reason you could see a rather swift panic. Of course nobody’s going to get the timing on that prediction right and even if they do it might not matter. If you have a great place to live at an affordable fixed cost, maybe that’s all you need. Whether it goes up 10% per year 1% per year or down 5% per year.