Reader elbarcosr sent in these thoughts and numbers on Carmel Valley:
I always pause and try to take a big-picture look at the market each month when you post inventory watch. I get confused trying to get a feel for where the market is actually doing since so many stats come out blending apples and oranges and focusing on MOM or YOY, which I don’t like since snapshots seem misleading to me.
So I ran a comparison for 92130 detached solds for 1/1 to 9/29 for 2013 and 2014. Limited it to 4br, over 2500 sq ft and under 1.8 since I think that is the sweet spot for CV, albeit maybe I should have lowered the top end sales price. I didn’t delete any anomalies off the results, though it might have provided more accuracy had I done that.
I think 92130 is a decent proxy since there is a lot of volume and the houses are fairly interchangeable, give or take. You can’t use west of the 5 as any over-all indicator I don’t think, Encinitas is pretty scattered with product variation and I don’t know Carlsbad all that well.
|No. of Sales|
What do these numbers say? Perhaps despite all the histrionics needed to sell papers (I guess generate clicks would be more accurate), has 2014 just been a slightly boring to above-average year? DOM still seems pretty low.
1. The price increases on top of last year’s frenzy are impressive, but they are relatively modest – and not large enough to scare off buyers who have already seen a 19% increase in the average cost-per-sf since 2012. So something else is contributing to the rather-large 30% drop in sales – either not enough houses for sale, or we’re running out of buyers.
Carmel Valley Total Detached-Home Listings Jan 1 – Sept. 15
2013 = 606
2014 = 563 (-7%)
There have been 7% fewer houses listed for sale in 2014, but sales are down 30%. My guess is that the ‘inferior’ houses for sale are not selling like they were in 2013, and contributing to the rest of the difference. Without frenzy, buyers get picky.
2. Run Out of Buyers? It sounds far-fetched, but once they buy their residence, buyers are done (or look elsewhere for rentals). There have been 841 CV resales over $1,000,000 in the last 48 months, and while there will always be buyers, the demand has to be thinning out somewhat with higher pricing.
3. Carmel Valley is its own club – there isn’t a substitute. The only other way to stay in the Del Mar School District is to move to Del Mar, where it costs more and you don’t have easy choices like you do with the newer tract homes that populate the 92130. Same if you’re on the north side of CV and in Solana Beach schools – moving to Solana Beach takes big money and you’re probably going to buy an older home that needs work. Ewwww
4. The Days on Market has been fast-forwarded due to new listings being disseminated to buyers within minutes of hitting the MLS – and it has helped to inflict urgency too. But the hyper-speed also contributes to listings going stale after a week or two, because both buyers and agents keep a Teflon memory, and consider a new listing for about as long as a loaf of bread. I doubt it will change, and sellers need to be sharp on price from the beginning.
I agree with elbarcosr that Carmel Valley is a decent proxy for the rest of the local market. It is by far the best place to compare like-kind properties, due to it being almost exclusively newer tract houses – and built by the same builder! And while the rest of SD County doesn’t enjoy the confluence of location, schools, and proximity of employers like Carmel Valley, at least we can learn from its general market data and see if it applies elsewhere.