We have an unusual obsession with home pricing – I say unusual because nobody cares that our measuring devices are deeply flawed and regularly give the wrong impression. With the stakes being so high, you’d think homebuyers would investigate thoroughly – but everyone just wants to grab and go!
You can see in the graph above how the smaller sample sizes cause more volatility – Encinitas only had 19 houses sold in December, and ten closings in January – so the 10% to 15% bounces up and down aren’t good representations of the pricing trend.
This is a better look at the trend – the average and median $$/sf for houses sold between La Jolla and Carlsbad, and this includes the 70 sales so far this month:
The upward trend should continue as more of the premium products come to market this spring.
I predicted that there wouldn’t be a sale under $2,000,000 in the Davidson Starboard tract in La Costa Oaks after we closed the Plan 2 in October. The first new listing there since is coming soon, priced at $2,899,000 and they should get all the money:
https://www.compass.com/app/listing/7657-sitio-algodon-carlsbad-ca-92009/1253018741329889369
I know they paid $1,999,919 in 2019, but there have been others that have closed for a million dollars over their 2019 purchase price. The Plan 3 layout probably isn’t as popular as the Plan 2, and the backyard is filled with a pool. But this street is a culdesac and it has the best south and west views which only come up occasionally for sale. It’s been so long since we’ve had an offering like this that I wouldn’t be surprised if she has 100+ people look at it next week – in spite of all the doom!
I think people see that the fed is not serious about tackling inflation and what better way to front run it than buying real estate.
Its possible that real estate at least in nominal terms won’t go down.
Traditional economics and history would suggest interest rates in the range of 8 to 10% for the inflation rates we have been having which sound like anathema to our elite, so maybe borrowing at 6% when inflation is in the 10s is not a bad idea after all.
so maybe borrowing at 6% when inflation is in the 10s is not a bad idea after all.
If you don’t mind, I’m going to use that one!
How are the quartiles doing?
Roughly +10% since Jan 1.
I’ll graph it on Monday.