Not since the famed Frazier-Ali fight in Madison Square Garden has a battle been waged so competitively by two opponents. In this instance, the fight happens to be between buyers and Carlsbad home sellers, both wanting to go home with the prize, the best deal.
Since buyers are seeing more available homes on the market than ever before they are seeking to pay less for their chosen home. Homeowners have been, in part, motivated to sell because of their newly-had appreciation, so selling their home below expectations is not an option and they held firm thus far.
If you are deciding to join either side and partake in the fun of property negotiation, heed the words of Francis Bacon, who once wrote "Knowledge is Power". It will better your odds in getting a favorable outcome.
New construction
MarketPointe, a San Diego-based company that tracks new construction, stated that the North County coastal area captured 33% of the single family home sales in San Diego County during the last quarter of 2005; and a large portion of those projects are located within Carlsbad. The new single-family developments in Carlsbad have been selling consistently well, shown through the every-increasing sales price of each consecutive phase release.
Castlemar of La Costa Greens, for instance, at an average of $976,971 when the development opened in February 2005 are now selling for $1,080,000. Newly constructed town homes are also selling well. Yet even though Carlsbad offers a limited number of newly constructed town homes and condominiums, the city has managed to rank as the second-best selling attached submarket in San Diego County during the last part of 2005.
Interest rates
Interest rates have moved up a quarter point in the last month and are hovering around 6.5% for a conventional loan with 10% down. This is important because home prices have moved up significantly since they were last at this level, so buyers are figuring out different ways in order to make ends meet or find ways to purchase their dream. Mortgage rates are expected to hit 7% by the year’s end.
Some worry that prices will soften when interest rates increase and homeowners will be forced to sell due to their adjustable-rate mortgage payment changing. Currently, 67% of San Diego homeowners have chosen adjustable-rate mortgages, stated in a recent report by the National Association of Realtors. However, only 3% of those homes have a loan to rate ratio above 90%, which leaves most in a very favorable position and minimizes the risk of foreclosure.
Town homes and condominiums
Since the year began, the town home and condominium market has been wracked with competition, and the number of attached homes remains high. A large majority of the owners of these properties have owned the property for over two years and want to use the two-year, tax-free option to either move into a larger detached home or, if the home is an investment property, capitalize on the favorable market and cash it out.
In the last 6 months, the owners have not been willing to stray far from their asking price. As of mid-March this year, over 120 attached homes have sold in Carlsbad with an average selling price of $480,000. First time homebuyers have gravitated towards the affordability of town homes and condominiums, because of the relative affordability in comparison to detached homes. However as interest rates move to 7% by years end, it will be interesting to see the affect on the value of attached homes, if the inventory levels remain high. In short, the attached market is facing heavy competition, yet prices remain stable and the time to sell the property is around 60+ days.
Single-family homes
The current detach market has a healthy amount of homes for sale. In Carlsbad, around 450 single-family homes await a buyer. The near record-high number of homes for sale is confirming the overall feeling that the market has changed from the dominant sellers market we experienced during the last seven years, to a competitive buyer-friendly market.
For many this change is welcome, giving buyers more time to find their ideal home and reliving the intense pressure associated with purchasing a home. Note to future sellers: keep a watchful eye on inventory levels if you plan to sell your home in the next year; buyers comparison-shop their home. If you are trying to sell with other similar homes for-sale in your neighborhood, their offering price will affect your result. Also, the average market time is between two and three months to sell your home, so plan accordingly.
Since buyers are seeing more available homes on the market than ever before they are seeking to pay less for their chosen home. Homeowners have been, in part, motivated to sell because of their newly-had appreciation, so selling their home below expectations is not an option and they held firm thus far.
If you are deciding to join either side and partake in the fun of property negotiation, heed the words of Francis Bacon, who once wrote "Knowledge is Power". It will better your odds in getting a favorable outcome.
New construction
MarketPointe, a San Diego-based company that tracks new construction, stated that the North County coastal area captured 33% of the single family home sales in San Diego County during the last quarter of 2005; and a large portion of those projects are located within Carlsbad. The new single-family developments in Carlsbad have been selling consistently well, shown through the every-increasing sales price of each consecutive phase release.
Castlemar of La Costa Greens, for instance, at an average of $976,971 when the development opened in February 2005 are now selling for $1,080,000. Newly constructed town homes are also selling well. Yet even though Carlsbad offers a limited number of newly constructed town homes and condominiums, the city has managed to rank as the second-best selling attached submarket in San Diego County during the last part of 2005.
Interest rates
Interest rates have moved up a quarter point in the last month and are hovering around 6.5% for a conventional loan with 10% down. This is important because home prices have moved up significantly since they were last at this level, so buyers are figuring out different ways in order to make ends meet or find ways to purchase their dream. Mortgage rates are expected to hit 7% by the year’s end.
Some worry that prices will soften when interest rates increase and homeowners will be forced to sell due to their adjustable-rate mortgage payment changing. Currently, 67% of San Diego homeowners have chosen adjustable-rate mortgages, stated in a recent report by the National Association of Realtors. However, only 3% of those homes have a loan to rate ratio above 90%, which leaves most in a very favorable position and minimizes the risk of foreclosure.
Town homes and condominiums
Since the year began, the town home and condominium market has been wracked with competition, and the number of attached homes remains high. A large majority of the owners of these properties have owned the property for over two years and want to use the two-year, tax-free option to either move into a larger detached home or, if the home is an investment property, capitalize on the favorable market and cash it out.
In the last 6 months, the owners have not been willing to stray far from their asking price. As of mid-March this year, over 120 attached homes have sold in Carlsbad with an average selling price of $480,000. First time homebuyers have gravitated towards the affordability of town homes and condominiums, because of the relative affordability in comparison to detached homes. However as interest rates move to 7% by years end, it will be interesting to see the affect on the value of attached homes, if the inventory levels remain high. In short, the attached market is facing heavy competition, yet prices remain stable and the time to sell the property is around 60+ days.
Single-family homes
The current detach market has a healthy amount of homes for sale. In Carlsbad, around 450 single-family homes await a buyer. The near record-high number of homes for sale is confirming the overall feeling that the market has changed from the dominant sellers market we experienced during the last seven years, to a competitive buyer-friendly market.
For many this change is welcome, giving buyers more time to find their ideal home and reliving the intense pressure associated with purchasing a home. Note to future sellers: keep a watchful eye on inventory levels if you plan to sell your home in the next year; buyers comparison-shop their home. If you are trying to sell with other similar homes for-sale in your neighborhood, their offering price will affect your result. Also, the average market time is between two and three months to sell your home, so plan accordingly.