This is the Redfin graph of sold $/sf vs list $/sf for San Diego. For some reason the two lines are no longer tracking. Can anyone help me figure this out? [Click for a clearer picture.]
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Jim Klinge
Klinge Realty Group
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Thank you Donna and Jim, Jerry and MaryTrustindex verifies that the original source of the review is Google. We have known Jim & Donna Klinge for over a dozen years, having met them in Carlsbad where our children went to the same school. As long time North County residents, it was a no- brainer for us to have the Klinges be our eyes and ears for San Diego real estate in general and North County in particular. As my military career caused our family to move all over the country and overseas to Asia, Europe and the Pacific, we trusted Jim and Donna to help keep our house in Carlsbad rented with reliable and respectful tenants for over 10 years. Naturally, when the time came to sell our beloved Carlsbad home to pursue a rural lifestyle in retirement out of California, we could think of no better team to represent us than Jim and Donna. 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Our family will never forget Jim, Donna, and their whole team at Compass — we are forever grateful to them.Trustindex verifies that the original source of the review is Google. WeI had the pleasure of working with Klinge Realty Group to sell our home in Carmel Valley, and I cannot recommend them highly enough! Jim and Donna demonstrated exceptional professionalism, offering expert guidance on market conditions and pricing strategy, which resulted in a quick and successful sale. Communication was prompt and we were well-informed throughout the entire process. For anyone looking for a dedicated and knowledgeable real estate team, look no further! ---Trustindex verifies that the original source of the review is Google. Donna and Jim Klinge of Klinge Realty Group have our highest possible recommendation. From Donna and Jim’s first visit to our house through closing their advice and counsel was candid and honest in all dealings. They kept us fully informed throughout the process. The house sold less than three days after listing with a two-week closing. My wife and I have sold several houses during our lives. This was by far the best experience. Klinge Reality is a premium service realtor. You can’t make a better choice for someone to sell your home fast and for top dollar.Trustindex verifies that the original source of the review is Google. Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.Trustindex verifies that the original source of the review is Google. This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.Trustindex verifies that the original source of the review is Google. Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless. So grateful that I had them on my side!Trustindex verifies that the original source of the review is Google. We first found Jim through his blog at bubbleinfo.com, which really showcased his knowledge of SoCal real estate. Since then we've done three transactions with Jim and Donna, and they are an incredible full service agency, with Jim's deep market insight and Donna's deft contract and project management. We trust them implicitly in their analysis and strategy, which is based on years of experience. They're always available and on top of things, and we strongly recommend them to anyone.Trustindex verifies that the original source of the review is Google. The Good The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market. The Great Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them. The Outstanding We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time. The Truly Exceptional Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs. The Recommendation For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's bubbleinfo.com blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...Trustindex verifies that the original source of the review is Google. We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready. Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free. Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.Load more
We discussed this at the pigg a while back… some ideas here (make sure to read comments): http://piggington.com/a_spring_bounce_in_seller_delusion
Rich
If the ratio of listed:sold houses in high-priced areas is far greater than the same ratio in low-priced areas, that would explain this divergence. That would also be consistent with the fact that the low end seems to be selling much much faster than the high end. Does that make sense?
Wouldn’t that roughly correspond with the new home buyer credit (really a seller payout) and various foreclosure pauses initiated at the start of the year? If most of the new listings are delusional owner-occupied sellers instead of REO’s, that would probably account for the up-trend disconnect in new listing prices. That theory should be tested soon, when the pending REO’s start hitting the market again.
That’s another good point, sperlyjinx… this would also be expected as the foreclosures move up the price ladder.
Sellers always list high in the spring and eventually come to their senses during the summer as the see houses selling around them while they just sit waiting for a miracle.
Also banks aren’t foreclosing on properties artificially causing a limited supply.
People are in major denial and highly optimistic
Redfin shows the same trend in LA and SF. It’s not showing up in all their markets, but it’s not just SD. Perhaps markets where subprime debris has nearly run out?
The problem with sperlyjinx’s theory is that higher priced homes often have lower $/sq ft. So if the MOS is dropping in lower price areas, that could cause $/sq ft to go down, because the higher priced areas have more listings.
I think it is increased demand from bargain hunters focusing on units in poor condition to fix up and rent or sell.
“The problem with sperlyjinx’s theory is that higher priced homes often have lower $/sq ft.”
Not sure I agree. Look at La Jolla, Del Mar, Olivenhein, Cardiff, and Solana Beach $/sq ft. And this, of course, is where the most delusional sellers are.
In some situations/areas, jon would be right. For example, expensive properties where the land-size affects the value, for example, can so skew them as to make $sf compaisons fairly worthless.
But in coastal NSD, I’m with The Blur. At the beach, the high-end areas and their homes seem to stll be MUCH higher per square-foot than low-to-mid-range ones.
A lot of high-end listings in areas I am following went off the market and are now dipping their toes back in, probably because of all the NAR hype about the “market comeback.”
What they don’t realize is that this market is NOT hot at the owners’ still-delusional price levels.
Rich,
Some very good comments on your site, as referenced above.
I think the one that struck me the most, but not touched on here is the time lag between listing and closed sales. Even a home that goes under contract very quickly after listing may not actually close (and then report the actual sales price) for 30, 60 or 90 days.
So while homes may start out with high list prices, the ones that sell, either cut quickly and often (as preached by Jim) or start out priced well to generate some buzz.
Also with a higher-priced home, there are more $ that are likely to be cut before closing. i.e., a 10% cut on a $1M is $100k cut. in contrast, the hottest part of the market now is under $300k, where you’d NEVER get a 100k cut–there’re being priced well and getting bid up! So the influx of more high-end toe-dippers can skew that listing line way up.
Radar logic is a more reliable source for sold PPSF.
Current summary data here:
http://www.radarlogic.com/daily%20price%20chart/DailyPublication.html
You can download historical data in csv format:
http://analytics.radarlogic.com/radar-logic-home/historical-data.aspx
However, the radar data shows similar trend in sold PPSF and does not explain the discrepancy to list PPSF that you note.
If you spend time typing individual zip codes into Redfin you start to see a pattern. The coastal areas plus downtown show the divergence strongly, while the more inland areas do not show this effect. So it looks to me like it’s partly the reasons people have already said about the higher end houses not selling, plus expensive downtown condos that nobody wants coming on the market.
I noticed when the FHA loan limit went up to $697,000 in SD new homes listing on the MLS jumped in price. Homes that were selling in the $650,000 range all of the sudden listed for $799,000. And other higher end homes for $850,000-$950,000 all of the sudden appeared.
What’s the third line on the bottom? It looks like it would be the volume line if it was a stock chart.
My answer: Wishing Price.
In the past, you have a situation where there are 10 homes for sale. 3 are listed for $200/sqft, 4 are listed for $300/sqft, and 3 are listed for $400/sqft. The average listing price is $300/sqft. Now let’s say 4 homes are sold, one from the $200 range, two from the $300 range, and one from the $400 range. The sold $/sqft would average out to $300/sqft.
Now, we still have 10 homes for sale, 4 are listed for $100/sqft and 6 are listed for $400/sqft. The average listing price is $280/sqft. Now only the 4 homes that listed for $100/sqft sells, so the average sold price is $100/sqft.
this is why you have the divergence. Only the low $/sqft homes are moving!
“Only the low $/sqft homes are moving”
we are seeing the end of subprime.
the homes of the poor are closing out
In describing the graph, I can’t decide between:
Hope. Springs. Eternal.
or:
Reality. Is. A. Bitch.
Option arm.
People are getting nervous about the recast. They have held off putting their houses on the market. Now they do not have a choice because their recast date is coming in the next six months.
Saw an article in the last few days that 30% of homeowners want to sell but can’t for various reasons.
Enjoy Carmel Valley. There were and are not enough new familes to qualify for $700,000 to 800,000 loans at 20% down. Check the record on how many family make over $200,000 a year in San Diego County. Then guess how many families live in Pt. Loma, La Jolla, Del Mar etc that are in a home built before 1995. There are not that many families to buy your house. Plus we are going to see how many families living in Carmel Valley can refinance their arm when there payment go up to $5500 a month plus taxes and Mello fees.
One recent thing I am seeing on the market is flippers who have picked up subprime foreclosures and are flipping them “like brand new!” This increases the price per sq.ft. even in low-end areas. Could account for some of the divergence.
-Erica
Flippers are definitely in the game again — big time. This is not a “real” rally, but an echo bubble.
People still believe flipping homes is the way to prosperity. Money is still loose, and people are still buying homes based on the assumption that prices will soon rise to peak levels++ after this little “blip” of a downturn is over.
The bubble is not over. The duration of the downturn is what will kill the RE market, IMHO.
We’re all subprime now.
The recent loan limit increase to $697k is having a big impact. I’m also seeing a disturbing trend of a lot of houses being removed from the market. Perhaps sellers are afraid of selling to cheap? This market seems to have turned on a dime. If the inventory continues to crash, delusional sellers may yet get bailed out. I’m tracking Poway pretty closely and it seems to have gotten stronger at all price points.
The list price / sale price divergence is roughly tracking with the listed / sold divergence that seems to have stated sometime in November. Based on that, I’d guess that there’s some kind of two-tier pricing going on.
As CalculatedRisk has pointed out on his blog, there’s a disparity between the sales of new and old homes as well.
Regardless, the phenomenon could be explained by something like 1,000 grossly overpriced listings that are basically being ignored by buyers.
No shocker there. Happens right after the foreclosure moratorium. Fewer affordable houses come on the market, but the pool of buyers hasn’t changed. Idiot sellers are still in a bubbled world. Sorry, mr. seller, a guy making $80k cannot afford your $600k house. Sellers are such morons.
It’s a combination of cheap stuff selling/expensive stuff not selling and lots of dreaming organic sellers who believe the market has turned overpricing their houses. This is happening in most markets.
Is this looking only at new listings (i.e., each listing captured once when listed) or a snapshot in time (all listings on the market at a given point in time)? If the latter, rapid turnover at the low end, with overpriced listings sitting on the market for months, could be an explanation.
Could it be that bank foreclosures, that were never listed, are lumped into the sold category.
That would bring down the sold $/sq ft while not affecting the list $/sq ft.
Multimillion-Dollar-Home-Price-Cuts
by Matt Woolsey
Forbes.com
Saturday, May 16, 2009
http://finance.yahoo.com/real-estate/article/107090/Multimillion-Dollar-Home-Price-Cuts?mod=realestate-buy
All great points here.
The fact of the matter is that CA housing is still way overpriced. There is not such thing as a V shaped recovery in any asset class.
Buyers need to have patience, sit tight and horde their cash. When RE is considered to be the worst “investment” out there, that will be the best time to buy. There are too many optimists out there right now for this to be the bottom.
When the good deals sell in 10 days and the crappy houses stay on the market for 100+ days, the crappy houses are worth 10x as much weight in the PPSQFT average because they stay up there 10x as long. It’s a basic statistical principal here. PPSQFT sold uses price per sale. PPSQFT list is actually implicitly weighted by DOM x price per sale.