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.
| Data Point | |||
| No. of Sales | |||
| Avg SP | |||
| Med SP | |||
| Avg $/sf | |||
| Med $/sf | |||
| Avg DOM | |||
| Med DOM |
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.
JtR thoughts:
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.
I’d argue that CV is definitely homogeneous but hardly representative of greater NCSD. Like Arcadia up here, it’s a highly sought after community known for excellent schools, therefore it would be the last place impacted by a slowing market.
This site rocks but your title does say “North County Real Estate” the focus seems to be more targeted than just that.
What it comes down to is your data and content is very consistent and enjoyed. So a lot of us come back wanting more than what this site might actually be designed for. I know I got myself in trouble posting here and needed to remember this is a business related blog for you.
It’s a great problem to have but I know I’d sure like to see data covering more of North County San Diego. Oceanside is the third largest city in San Diego County, Escondido is fourth. Both are in North County San Diego and both aren’t included in the data.
OK, I’ll change the name.
Does “North San Diego County Coastal region except Oceanside” work for you?
Thanks JTR, I didn’t think my question would make it to prime time.
On volume, it is harder to figure what true inventory is because some of the same houses come on and off the market and skew the numbers. Also, if you run the same search (92130; 4br+; 2500 sqft+; under 1.8) you get 364 new listings in 2013 and 310 in 2014; a 15% drop in new listings; apples to apples. Most importantly, how many of those 310 “new” listings in 2014 were priced to actually sell vs priced to hit the hot market lottery? There is 0 inventory of bargains/shorts/bank owned. In 2012/13 a buyer could scan inventory and see a bunch at market prices, with a percentage of “deals” to be had on the lower side. Now, you have the market-priced bunch and a percentage of OPT’s on the high side. I would argue that real inventory now (market priced houses) is substantially less than the raw numbers indicate.
On DOM, I agree that houses get stale at least twice as fast as they used to. It seems like you have 2-3 weeks to sell at your price, and if you can’t get it, do your price reduction then. If you still can’t sell, after 45 days, you might as well pack it in because then you are just sitting around hoping to get lucky with a new buyer to enter the market; all the real active buyers have moved on. But that new buyer will be dissuaded when they see how long you’ve been out there. Nobody wants to be the sucker anymore.
Get good help. (have you trademarked that yet?)
I would love to know CV data for $1.8M+ Since most of Pardee homes say they start at $1.3 but by the time the upgrades and owner costs, closing, landscaping etc are paid for they are pretty much in the $1.8 Range + when they want to sell.
If you are seriously looking, I’d say call Jim. He has the depth and breadth of knowledge to make sure you make an informed choice. The 1.8-2.5 market is very small in CV and I suspect those buyers are also viewing Del Mar, Fairbanks and even RSF.
For my .02, make sure you factor in HOA and Mello Roos in the true price/cost. Some older CV neighborhoods have low HOA and no MR’s, I suspect the new ones are pretty high. $600 a month in fees is 125k in purchase power (remodel power) with today’s rates…..
” The 1.8-2.5 market is very small in CV ” I beg to differ.
All Alta Del mar is over $1.8., Duck Pond area Del mar mesa, The Preserve, Pacific….
I live in ENCINITAS – and my kids can go to TORREY PINES AND CANYON CREST. You don’t have to live in Carmel Valley.
There are 29 active listings over $1.8 million, including Rancho Pacifica, Fairbanks Highlands, and all of Del Mar Mesa (only 11 listed between $1.8 and $2.5). There have been 44 sales over $1.8 million this year in 92130.
The allure of buying a brand new home at Alta Del Mar is still lingering over the marketplace, but they are winding down. Except for Rancho Pacifica and the Preserve, the 92130 should be a sub-$3 million market.
I saw the two houses that closed over $3 million this year, and was very surprised. They must have had friends living next door, or their job was down the street to pay that much for what they got.
The Meadows Del Mar is another head-scratcher – not sure why people are willing to pay into the mid-$2 millions for a house on a 60-ft wide lot.
Once Carmel Mountain Rd. goes through Alta Del Mar and the new freeway off-ramp opens, there is going to be more traffic and noise. Buyers should be cautious about the potential impact around Del Mar Mesa.
The bigger picture is usually what complicates it for buyers, because there are other choices nearby. When you include RSF, DM, SB, Fairbanks, Santaluz, and the Crosby, there are 101 listings between $1.8 and $2.5 million today.
I will help you – contact me!
Jesse, Encinitas is awesome. CV just has a larger pool of similar houses to try to get a glimpse of the market, which was my original exercise.
Del Mar School District and Solana Beach School District JtR mentioned in his post are district names for neighborhood elementary schools (and possibly middle schools) for residents living in CV, Del Mar and Solana Beach only I believe.
For the high schools for the residents of CV, DM, SB, Encinitas and part of Carlsbad the district name is San
Dieguito union high school district. High schoolers from Encinitas and part of Carlabad can attend Canyon Crest Academy but may not Torrey Pine which is the high school for CV, DM and SB primarily I again believe.