Follow the rabbit hole of real estate downward and you'll find this year's winter real estate market has turned upside down.
The traditional winter real estate market is characterized by a slowdown. Sales drop by as much as 30 percent and time to sell a property increases by as much as 20 percent.
Each year's winter quarter is often a buyer's market, as motivated homeowners will reduce their price to make a deal. But this year's winter market is different.
Instead of the often 12 month's worth of available homes, a scant 2.3 months remain in the less than $1 million category. This leaves homebuyers to quarrel over the few remaining homes.
Prices are increasing and homeowners are negotiating hard and getting almost full asking price. In the first part of 2009, the average single family home in Carlsbad was $676,516 at 96 percent of the asking price.
The same home today averages $710,000 and is selling for 99 percent of the asking price. Time to sell in the current market is 60 days.
Condo prices also are up roughly 6 percent from the start of the year. The average Carlsbad condo is a two bedroom, two bath, 1,440-square-foot unit that sells for $376,000.
The average condo takes 86 days on average to sell in the current market. The upward trend in pricing may continue in the short-term as available inventory is tight and rates remain in the low 5 percent range for a 30-year fixed mortgage.
But as prices move higher, investor's yields are pushed lower. As the expected yield drops below 6 percent, the risk and headache of property management will push many investors out of the market.
A change in the current mortgage rates will put a strain on demand for condos. A $370,000 condo with a mortgage at the current 5.3 percent rate has roughly the same monthly payments as a $300,000 condo at 6.5 percent, which was the average 30-year fixed rate in 2008.
Scarcity of available real estate is the primary cause of the current market conditions. New foreclosure property, which could help satiate buyer demand, has been delayed.
Venture down to the court steps at 220 W. Broadway in San Diego or 250 E. Main in El Cajon at 10 a.m. and you can watch representatives of the banks auction off foreclosed property. This is the step before being assigned to an REO agent and put on the MLS.
What is surprising are the large number of postponements and cancelled auctions. On a recent November morning, 665 properties were scheduled for auction in San Diego County, but only 23 made it to the floor for bidding.
Many speculate on the reasons behind the postponements, but what is clear are the results: Fewer homes, lower market time and higher prices.
To give first time homebuyers more time to receive the $8,000 government incentive to purchase a home, the “Worker, Homeownership and Business Assistance Act of 2009” has been extended to April 30. There is an additional provision for move-up buyers.
The provision is for individuals with incomes of up to $125,000, or $225,000 for those who file jointly. It gives up to $6,500 for those jointly filed taxpayers who have lived in their home for five consecutive years during the eight years before closing on a new home.
Homeowners itching for a change of surroundings should consider remodeling in today's real estate market. Every facet of construction business, from cabinet to flooring contractors, has seen a slowdown in available work.
New home construction is at a standstill and few projects are set to break ground in the near future. It is an opportune time to investigate the costs of remodeling and secure bids from several qualified professionals.
Homeowners are securing discounts of up to 40 percent on labor and materials. A kitchen remodel or backyard face-lift has the potential to add more value than its cost.
Money magazine called remodeling a home a “smart thing” in 2008, and that advice is relevant today.
For more information, contact Tyson Lund of The Lund Team at (760) 438-0800 or [email protected].
The traditional winter real estate market is characterized by a slowdown. Sales drop by as much as 30 percent and time to sell a property increases by as much as 20 percent.
Each year's winter quarter is often a buyer's market, as motivated homeowners will reduce their price to make a deal. But this year's winter market is different.
Instead of the often 12 month's worth of available homes, a scant 2.3 months remain in the less than $1 million category. This leaves homebuyers to quarrel over the few remaining homes.
Prices are increasing and homeowners are negotiating hard and getting almost full asking price. In the first part of 2009, the average single family home in Carlsbad was $676,516 at 96 percent of the asking price.
The same home today averages $710,000 and is selling for 99 percent of the asking price. Time to sell in the current market is 60 days.
Condo prices also are up roughly 6 percent from the start of the year. The average Carlsbad condo is a two bedroom, two bath, 1,440-square-foot unit that sells for $376,000.
The average condo takes 86 days on average to sell in the current market. The upward trend in pricing may continue in the short-term as available inventory is tight and rates remain in the low 5 percent range for a 30-year fixed mortgage.
But as prices move higher, investor's yields are pushed lower. As the expected yield drops below 6 percent, the risk and headache of property management will push many investors out of the market.
A change in the current mortgage rates will put a strain on demand for condos. A $370,000 condo with a mortgage at the current 5.3 percent rate has roughly the same monthly payments as a $300,000 condo at 6.5 percent, which was the average 30-year fixed rate in 2008.
Scarcity of available real estate is the primary cause of the current market conditions. New foreclosure property, which could help satiate buyer demand, has been delayed.
Venture down to the court steps at 220 W. Broadway in San Diego or 250 E. Main in El Cajon at 10 a.m. and you can watch representatives of the banks auction off foreclosed property. This is the step before being assigned to an REO agent and put on the MLS.
What is surprising are the large number of postponements and cancelled auctions. On a recent November morning, 665 properties were scheduled for auction in San Diego County, but only 23 made it to the floor for bidding.
Many speculate on the reasons behind the postponements, but what is clear are the results: Fewer homes, lower market time and higher prices.
To give first time homebuyers more time to receive the $8,000 government incentive to purchase a home, the “Worker, Homeownership and Business Assistance Act of 2009” has been extended to April 30. There is an additional provision for move-up buyers.
The provision is for individuals with incomes of up to $125,000, or $225,000 for those who file jointly. It gives up to $6,500 for those jointly filed taxpayers who have lived in their home for five consecutive years during the eight years before closing on a new home.
Homeowners itching for a change of surroundings should consider remodeling in today's real estate market. Every facet of construction business, from cabinet to flooring contractors, has seen a slowdown in available work.
New home construction is at a standstill and few projects are set to break ground in the near future. It is an opportune time to investigate the costs of remodeling and secure bids from several qualified professionals.
Homeowners are securing discounts of up to 40 percent on labor and materials. A kitchen remodel or backyard face-lift has the potential to add more value than its cost.
Money magazine called remodeling a home a “smart thing” in 2008, and that advice is relevant today.
For more information, contact Tyson Lund of The Lund Team at (760) 438-0800 or [email protected].