On a whole the Carlsbad market is stable and active. Overall, sales prices for single family homes have remained relatively steady for nearly 16 months. Demand for housing remains strong. Buyers continue to comparison shop and are not paying full asking price for an average home.
High inventory levels for two-bedroom condominiums and town homes are causing select communities to experience a softening in price. Interest rates have risen to around 6.75% and are expected to rise above 7% by years end. Properties that are currently listed for $1,000,000 and above can expect to be on the market between 65 to 90 days when accurately priced. Properties below $1,000,000 can expect to be on the market between 45 and 60 days. There are homes that sell within the first week of their offering; however this is not the norm as it was several years prior. Buyers are now researching all aspects of the property and considering every possible option before making a purchasing decision.
Also, the difference between the advertised listing price and the actual sales price has widened from 2% in 2004 to its current levels of 7%. For example, in the first 6 months of 2004 a property listed for $750,000 would close for around $735,000. Currently, a detached home listed for $880,000 has been closing for around $830,000. Homes continue to sell, however buyers will decide if the property is worth the seller's asking price.
Interest Rates
The mortgage rates hover around 6.75%, moving up and down slightly since May. A great deal of attention is paid to these interest rates, as they affect the buying power of current home buyers. As you read this, the Federal Reserve may have already increased interest rates during their meeting on June 28th, which will have an affect on the affordability of housing.
Town homes and Condominiums
Taking a look at the last 6 months of attached sales in Carlsbad, sales prices have softened slightly. Between January 1 and March 31, there were 147 condominiums that sold in Carlsbad. The average list price was $495,000 and the average sold price was $476,000. From April 1 to June 18, there were 143 sales and of the 77 that closed, the list price was $480,000 and the closed price was $463,000.
There are two reasons why the rising interest rates are likely the cause for the softening prices. The "hassle-free" ownership of having much of the property maintenance taken care of by an association is appealing to those wanting a second-home and/or investment property. Close to 25% of all attached properties in Carlsbad are second homes, in comparison to 9% of detached homes. Although a condominium is generally smaller than a detached home, it is often less expensive, which is appealing to first-time homebuyers. As mortgage rates increase, the cost of the luxury of a second home increases, the investment potential of a second-home decreases, and the first-time homebuyer finds the property less affordable to purchase. This causes demand, overall, to decrease and sales prices to follow.
Single Family Homes
On average, the sales price and market time for a single family home in Carlsbad has remained around the same levels since January 2005. For a home between 2,500 to 3,000 square feet, the sale price has fluctuated from $860,000 to $890,000 and the time it takes to sell is between 60 and 75 days. The values have been fluctuating on a scale of desirability.
Homes with emotional draw will achieve higher sales prices, while others will languish on the market without a buyer. The year the property was built, condition of the interior and location, are only some of features that a buyer will consider before making a purchase. The new trend with buyers is that they are taking much more time to purchase a home, in comparison to the last few years. The feeling of "I have to purchase now or miss out" is in large part gone, replaced by "If it doesn't work out, there will be another home."
High inventory levels for two-bedroom condominiums and town homes are causing select communities to experience a softening in price. Interest rates have risen to around 6.75% and are expected to rise above 7% by years end. Properties that are currently listed for $1,000,000 and above can expect to be on the market between 65 to 90 days when accurately priced. Properties below $1,000,000 can expect to be on the market between 45 and 60 days. There are homes that sell within the first week of their offering; however this is not the norm as it was several years prior. Buyers are now researching all aspects of the property and considering every possible option before making a purchasing decision.
Also, the difference between the advertised listing price and the actual sales price has widened from 2% in 2004 to its current levels of 7%. For example, in the first 6 months of 2004 a property listed for $750,000 would close for around $735,000. Currently, a detached home listed for $880,000 has been closing for around $830,000. Homes continue to sell, however buyers will decide if the property is worth the seller's asking price.
Interest Rates
The mortgage rates hover around 6.75%, moving up and down slightly since May. A great deal of attention is paid to these interest rates, as they affect the buying power of current home buyers. As you read this, the Federal Reserve may have already increased interest rates during their meeting on June 28th, which will have an affect on the affordability of housing.
Town homes and Condominiums
Taking a look at the last 6 months of attached sales in Carlsbad, sales prices have softened slightly. Between January 1 and March 31, there were 147 condominiums that sold in Carlsbad. The average list price was $495,000 and the average sold price was $476,000. From April 1 to June 18, there were 143 sales and of the 77 that closed, the list price was $480,000 and the closed price was $463,000.
There are two reasons why the rising interest rates are likely the cause for the softening prices. The "hassle-free" ownership of having much of the property maintenance taken care of by an association is appealing to those wanting a second-home and/or investment property. Close to 25% of all attached properties in Carlsbad are second homes, in comparison to 9% of detached homes. Although a condominium is generally smaller than a detached home, it is often less expensive, which is appealing to first-time homebuyers. As mortgage rates increase, the cost of the luxury of a second home increases, the investment potential of a second-home decreases, and the first-time homebuyer finds the property less affordable to purchase. This causes demand, overall, to decrease and sales prices to follow.
Single Family Homes
On average, the sales price and market time for a single family home in Carlsbad has remained around the same levels since January 2005. For a home between 2,500 to 3,000 square feet, the sale price has fluctuated from $860,000 to $890,000 and the time it takes to sell is between 60 and 75 days. The values have been fluctuating on a scale of desirability.
Homes with emotional draw will achieve higher sales prices, while others will languish on the market without a buyer. The year the property was built, condition of the interior and location, are only some of features that a buyer will consider before making a purchase. The new trend with buyers is that they are taking much more time to purchase a home, in comparison to the last few years. The feeling of "I have to purchase now or miss out" is in large part gone, replaced by "If it doesn't work out, there will be another home."