The active inventory of NSDCC detached homes for sale is starting to grow:
The UNDER-$1,200,000 Market:
Date
NSDCC Active Listings
Avg. LP/sf
DOM
Avg SF
April 29
201
$384/sf
36
2,599sf
May 5
195
$381/sf
36
2,633sf
May 9
207
$387/sf
35
2,624sf
May 18
241
$397/sf
33
2,566sf
May 23
236
$397/sf
34
2,529sf
May 30
230
$391/sf
35
2,591sf
June 5
229
$393/sf
35
2,577sf
June 11
239
$390/sf
34
2,569sf
June 17
246
$389/sf
36
2,577sf
June 24
255
$397/sf
36
2,535sf
July 1
244
$401/sf
38
2,526sf
July 8
256
$398/sf
38
2,530sf
July 15
269
$403/sf
38
2,486sf
The OVER-$1,200,000 Market:
Date
NSDCC Active Listings
Avg. LP/sf
DOM
Avg SF
April 29
620
$806/sf
94
5,183sf
May 5
606
$806/sf
93
5,223sf
May 9
628
$808/sf
93
5,150sf
May 18
653
$807/sf
92
5,161sf
May 23
661
$814/sf
92
5,141sf
May 30
659
$805/sf
95
5,222sf
June 5
663
$794/sf
96
5,185sf
June 11
672
$779/sf
96
5,163sf
June 17
661
$787/sf
99
5,164sf
June 24
679
$791/sf
98
5,097sf
July 1
705
$785/sf
94
5,084sf
July 8
702
$779/sf
95
5,100sf
July 15
736
$776/sf
94
5,038sf
It is tempting to blame higher mortgage rates, but it could also be the usual seasonal slowdown as we close out the summer. Both Richard and I were involved in bidding wars this week, and there is no shortage of demand for the well-priced properties.
On May 30th, I started logging the number of new listings, and number of new pendings each week. It turns out that it was the last week of the frenzy, and we’re working our way into the more-normalized 2:1 ratio:
Weekly NSDCC New Listings and New Pendings
Week
New Listings
New Pendings
May 30
70
84
June 5
87
64
June 11
77
69
June 17
73
66
June 24
100
69
July 1
86
64
July 8
81
53
July 15
106
54
Unlike the end of last summer when we experienced an abnormal and shocking rise in sales and pricing during the presidential election, the rest of this year should quiet down.
Yesterday we saw that NSDCC detached homes sold in June averaged $453/sf, up 23% year-over-year – and getting close to peak pricing.
Here is a comparison from this year to last year, and to 2006, using the larger May 1-to-June 30 period to increase the sample sizes:
Average $/sf for Detached Homes Sold May 1st-June 30th
Town or Area
Zip Code
2006
2012
2013
Cardiff
92007
$598
$431
$480
NW Carlsbad
92008
$452
$351
$401
SE Carlsbad
92009
$328
$251
$296
NE Carlsbad
92010
$321
$228
$281
SW Carlsbad
92011
$358
$278
$314
Del Mar
92014
$846
$671
$745
Encinitas
92024
$412
$340
$435
La Jolla
92037
$820
$638
$691
W Oceanside
92054
$363
$267
$330
Poway
92064
$596
$389
$494
RSF
92067
$669
$442
$458
Solana Beach
92075
$596
$389
$494
S. San Marcos
92078
$291
$200
$234
N. Vista
92084
$313
$175
$236
RSF
92091
$551
$375
$504
PB/MB
92109
$803
$470
$580
Bay Park
92110
$450
$360
$425
Clairemont
92117
$438
$296
$355
University City
92122
$440
$357
$386
West RB/4S Ranch
92127
$340
$253
$294
Rancho Bernardo
92128
$329
$257
$293
Rancho Penasquitos
92129
$330
$245
$303
Carmel Valley
92130
$390
$323
$371
Scripps Ranch
92131
$354
$259
$308
All Above
$398
$293
$348
SD County
$376
$241
$291
Encinitas is the only area that is above their 2006 level, but others are approaching. Carmel Valley, Rancho Bernardo, Rancho Penaquitos, and Bay Park are all within 10% of 2006.
The number of NSDCC detached sales in June hasn’t quite caught up to last year’s total yet, though this June had one less business day:
June
#Sales
Avg. $/sf
Avg. DOM
2010
256
$385/sf
65
2011
251
$373/sf
77
2012
339
$368/sf
72
2013
325
$453/sf
42
Last month’s average number of sales was 16.25 per day, the highest daily average of June closings since 2004. Prices have been surging too; let’s compare to the last peak.
The previous boom had been gradually picking up steam since the tun of the decade, and in 2003 went into overdrive, fueled by the neg-ams and no-doc qualifying. Pricing went on a two-year bender:
In the period between January, 2003 and January 2005, average pricing increased 46%. But once we got around $475/sf, the trend took a right turn and stayed in the $450/sf to $500sf range until mid-2008.
Low rates and prices have caused a similar frenzy, are we on the same path?
Between June, 2012 and June 2013, average pricing increased 23% – the same velocity as the last surge (half as much, in half the time). It also gets us into the same range where prices flattened out previously.
If the trend were to continue for the full two years like last time, it would get the NSDCC average pricing up to around $537/sf, which sounds astronomical.
With higher rates and prices, it would make more sense that the trend would moderate, and probably stay in a similar range of $450/sf to $500/sf for the foreseeable future.
At a brokers open house in Northern Virginia this week, real estate agents said they are already seeing the effects of higher rates on the ground and in the homes they’re trying to sell.
“It has gotten a lot quieter, which is a shame because historically the rates are still very low,” said Ruth Griel with Prosperity Mortgage.
(did her refi pipeline dry up?)
Realtor Timothy Landis said, “I’ve heard some people say ‘that’s really going to cut down on business’ because people are now going to say ‘hey, I missed the boat, I’m going to hold off, I’m not going to go out and purchase'”.
(it should cut down on bidding wars)
From the cnbc printed article: “It’s having a kind of chilling effect on the market,” said Mark Beardsley, a Realtor with Long and Foster. “What’s happening is we are pricing down. If they were qualified for 600, now we’re looking at 550 and below.”
What realtor Mark Beardsley said on the video, “It’s having a kind of chilling effect on the overall temperature of the market. It’s coming down from white hot to red hot. But there are still so many buyers out there and there’s so little inventory that we’re still having a lot of people bidding on the good properties.”
Since the last peak, there has been one house in this neighborhood sell over $1,000,000 – and it was a month ago for $1,040,000. So this seller adapted a typical strategy for today – spread a big range around the last comp:
