The real estate market in North County continues to move upward with higher prices and lower market time. The result of several years of unprecedented government intervention has lead to today's record low mortgage rates of sub-3.5 percent and decade high home affordability in San Diego County. Investors, as well as traditional buyers, rushed to purchase available property.
The result is the current drought of available homes for-sale that seems to only be getting worse. Supply of homes under $1 million in Carlsbad has fallen below half-a-month's supply, a number not seen in local real estate.
With major construction projects postponed during the great recession, new construction has not been able to provide the needed new supply of homes. Existing new construction starts have not been able to keep up with the current demand. The few new construction projects remaining in Carlsbad, Oceanside and surrounding cities, have reduced their homebuyer incentives and raised their base-pricing on existing lots.
The supply problem is making for almost comical open-house scenarios. A recent open house in south Carlsbad's 92009 ZIP Code had more than 30 cars lining the street. Neighbors stepped outside to watch the throngs of people line up, as if The Rolling Stones were playing inside, to view this newly listed 1,600 square-foot fixer-upper. Several of those homebuyers submitted offers on the first day of it being listed, only to be told that another buyer got the “golden ticket”. Therein lies today's real estate market: a highly competitive, newly-formed seller's market.
Where is the supply?
Those who may have considered or even attempted to sell their homes and were unable to get their desired price should consider relisting for sale in 2013. The North County real estate market is desperate for new homes for-sale, and the population of buyers is growing. The current elongated period of scarce inventory has created a temporary backlog of available homebuyer that want to purchase a home.
Those who did not sell last year should find that their potential selling price could be as much as 5 percent higher in 2013. Those sellers should pay less attention to comparative sales older than 30-45 days. The real estate market in 2013 in North County is changing rapidly. A homeowner today should use past comparatives as a guideline, but pay closer attention to what comparable homes are currently on sale. Here's the difference, a home that closed escrow in December could have gone under contract in late October. This is reflective of a different market.
The current market is competitive than it ever was in 2012.
The low inventory and low rates has created fierce competition and heightened level of urgency between homebuyers that is enabling higher market pricing. Homeowners are finally in the driver's seat. Average North County home prices are rising and a properly priced home can sell within the first week of being listed for sale.
With multiple offers becoming the rule rather than the exception, agents are facing new challenges in vetting out the most qualified buyer amidst the group, along with maximizing the current sales price within a conservative appraisal environment. It becomes painfully obvious how the local market has changed when listing agents are found resurrecting policy from the go-go 2005 era of real estate of the per diem charge. This is a counter term that would create a monetary penalty should the buyer not close escrow within the agreed-upon time. Experienced real estate brokers are reminding their homebuyers of the importance of being fully prequalified and how it can make the difference in a multiple-offer scenario. Agents are also seeking out lenders with lower turnaround times for a loan to fund.
Large banks or credit unions have been unable to perform sooner than 45 days, a penalty that could cost the borrower the deal. It appears the current competitive market trend will persist in North County until the market sees higher rates and more homes available for purchase, neither of which are expected in the near term.
The result is the current drought of available homes for-sale that seems to only be getting worse. Supply of homes under $1 million in Carlsbad has fallen below half-a-month's supply, a number not seen in local real estate.
With major construction projects postponed during the great recession, new construction has not been able to provide the needed new supply of homes. Existing new construction starts have not been able to keep up with the current demand. The few new construction projects remaining in Carlsbad, Oceanside and surrounding cities, have reduced their homebuyer incentives and raised their base-pricing on existing lots.
The supply problem is making for almost comical open-house scenarios. A recent open house in south Carlsbad's 92009 ZIP Code had more than 30 cars lining the street. Neighbors stepped outside to watch the throngs of people line up, as if The Rolling Stones were playing inside, to view this newly listed 1,600 square-foot fixer-upper. Several of those homebuyers submitted offers on the first day of it being listed, only to be told that another buyer got the “golden ticket”. Therein lies today's real estate market: a highly competitive, newly-formed seller's market.
Where is the supply?
Those who may have considered or even attempted to sell their homes and were unable to get their desired price should consider relisting for sale in 2013. The North County real estate market is desperate for new homes for-sale, and the population of buyers is growing. The current elongated period of scarce inventory has created a temporary backlog of available homebuyer that want to purchase a home.
Those who did not sell last year should find that their potential selling price could be as much as 5 percent higher in 2013. Those sellers should pay less attention to comparative sales older than 30-45 days. The real estate market in 2013 in North County is changing rapidly. A homeowner today should use past comparatives as a guideline, but pay closer attention to what comparable homes are currently on sale. Here's the difference, a home that closed escrow in December could have gone under contract in late October. This is reflective of a different market.
The current market is competitive than it ever was in 2012.
The low inventory and low rates has created fierce competition and heightened level of urgency between homebuyers that is enabling higher market pricing. Homeowners are finally in the driver's seat. Average North County home prices are rising and a properly priced home can sell within the first week of being listed for sale.
With multiple offers becoming the rule rather than the exception, agents are facing new challenges in vetting out the most qualified buyer amidst the group, along with maximizing the current sales price within a conservative appraisal environment. It becomes painfully obvious how the local market has changed when listing agents are found resurrecting policy from the go-go 2005 era of real estate of the per diem charge. This is a counter term that would create a monetary penalty should the buyer not close escrow within the agreed-upon time. Experienced real estate brokers are reminding their homebuyers of the importance of being fully prequalified and how it can make the difference in a multiple-offer scenario. Agents are also seeking out lenders with lower turnaround times for a loan to fund.
Large banks or credit unions have been unable to perform sooner than 45 days, a penalty that could cost the borrower the deal. It appears the current competitive market trend will persist in North County until the market sees higher rates and more homes available for purchase, neither of which are expected in the near term.