The local real estate sales market is vibrant as buyers find confidence to aggressively bid on a dwindling number of affordable homes.
The Carlsbad home sales figures are staggering. January and February saw 101 detached homes under $1 million go under contract, which is a 20 percent increase over the same period in 2008. March and April had 182 single family Carlsbad homes go under contract, which is a 50 percent increase over the same period in 2008.
As detached homes see an increase in sales, attached property often suffers. But in today's marketplace, townhomes and condos also are seeing surprising sales figures.
More than 170 attached homes went under contract or sold from January to May 1 of this year, which is 30 percent more than in 2008. With around 50 attached homes selling per month and only 185 condos listed for sale in the Multiple Listing Service, Carlsbad has less than four months of attached inventory.
With the jump in sales activity, property is taking less time to sell. If a handful of outlier homes are removed from the average (like a $10 million home that has been on the market for 792 days), the average market time to sell a detached home in Carlsbad is 47 days. In the winter quarter of 2008, the average was closer to 90 days.
Real estate professionals use average market time to gauge the health of the current real estate market. An increase in average market time of more than 30 percent often precedes price reductions, as homeowners reduce their asking prices to standout against the competition.
But what happens when average market time decreases? The decline in average sales prices will cease. But any homeowner hopeful of a quick rise in sales prices will be disappointed.
Homebuyers are fixated on the lowest priced closed sales and have a justifiable fear of paying too much for a home. The market has seen several months of increased sales, but the buying trend needs to continue for a prolonged period of time before prices move upward.
Certain segments of the market are not feeling the love of the recent increased sales activity. The Carlsbad market priced above $1 million is stagnant.
A paltry 24 homes have gone under contract or sold from January to May 1 of this year. There are 141 homes listed for more than $1 million that remain unsold.
At the current sales pace of around six homes selling per month, it would take two years to sell the $1 million homes that are currently available. Continued price corrections in the Carlsbad luxury market are expected.
Summer expectations
Thirty-year fixed mortgage rates are in the low 5 percent range, with buyers securing rates as low as 4.5 percent with a buy-down.
These are record low levels. Throughout 2008, the average mortgage rate was around 6.25 percent. This reduction creates affordability and is responsible for the recent surge in buying activity.
For the short-term, today's market has shifted slightly toward the favor of the seller. A properly priced home will sell within 30 days and can expect multiple offers. This comes as a shock to many homebuyers.
In 2008, a buyer could offer $35,000 under the asking price of a $500,000 home and negotiate for weeks without fear of losing the negotiation. Today, buyers are running into other homebuyers wanting the same well-priced property. Bidding wars occur regularly.
The current competitive market is expected to continue over the summer months. The long awaited end of the foreclosure moratorium has been delayed again, which has helped to restrict the number of homes for sale.
With mortgage rates expected to stay under 6 perent in the short-term, the market will remain active. A dramatic rise in inventory or mortgage rates would slow the Carlsbad real estate market down, but the mood of the market is newly optimistic.
Those wanting the market to decline further will have to wait.
For more information, contact Tyson Lund at (760) 438-0800 or [email protected]
The Carlsbad home sales figures are staggering. January and February saw 101 detached homes under $1 million go under contract, which is a 20 percent increase over the same period in 2008. March and April had 182 single family Carlsbad homes go under contract, which is a 50 percent increase over the same period in 2008.
As detached homes see an increase in sales, attached property often suffers. But in today's marketplace, townhomes and condos also are seeing surprising sales figures.
More than 170 attached homes went under contract or sold from January to May 1 of this year, which is 30 percent more than in 2008. With around 50 attached homes selling per month and only 185 condos listed for sale in the Multiple Listing Service, Carlsbad has less than four months of attached inventory.
With the jump in sales activity, property is taking less time to sell. If a handful of outlier homes are removed from the average (like a $10 million home that has been on the market for 792 days), the average market time to sell a detached home in Carlsbad is 47 days. In the winter quarter of 2008, the average was closer to 90 days.
Real estate professionals use average market time to gauge the health of the current real estate market. An increase in average market time of more than 30 percent often precedes price reductions, as homeowners reduce their asking prices to standout against the competition.
But what happens when average market time decreases? The decline in average sales prices will cease. But any homeowner hopeful of a quick rise in sales prices will be disappointed.
Homebuyers are fixated on the lowest priced closed sales and have a justifiable fear of paying too much for a home. The market has seen several months of increased sales, but the buying trend needs to continue for a prolonged period of time before prices move upward.
Certain segments of the market are not feeling the love of the recent increased sales activity. The Carlsbad market priced above $1 million is stagnant.
A paltry 24 homes have gone under contract or sold from January to May 1 of this year. There are 141 homes listed for more than $1 million that remain unsold.
At the current sales pace of around six homes selling per month, it would take two years to sell the $1 million homes that are currently available. Continued price corrections in the Carlsbad luxury market are expected.
Summer expectations
Thirty-year fixed mortgage rates are in the low 5 percent range, with buyers securing rates as low as 4.5 percent with a buy-down.
These are record low levels. Throughout 2008, the average mortgage rate was around 6.25 percent. This reduction creates affordability and is responsible for the recent surge in buying activity.
For the short-term, today's market has shifted slightly toward the favor of the seller. A properly priced home will sell within 30 days and can expect multiple offers. This comes as a shock to many homebuyers.
In 2008, a buyer could offer $35,000 under the asking price of a $500,000 home and negotiate for weeks without fear of losing the negotiation. Today, buyers are running into other homebuyers wanting the same well-priced property. Bidding wars occur regularly.
The current competitive market is expected to continue over the summer months. The long awaited end of the foreclosure moratorium has been delayed again, which has helped to restrict the number of homes for sale.
With mortgage rates expected to stay under 6 perent in the short-term, the market will remain active. A dramatic rise in inventory or mortgage rates would slow the Carlsbad real estate market down, but the mood of the market is newly optimistic.
Those wanting the market to decline further will have to wait.
For more information, contact Tyson Lund at (760) 438-0800 or [email protected]