Today's real estate is a fantastic spectacle. The extreme scarcity of available homes for sale has seen Carlsbad's average time-on-market shrink to 18 days for single-family home sales under $1 million.
That average does not show that many homes are selling in the first few days of being listed or even before they are openly listed for sale. Entry level properties in Carlsbad and surrounding North County cities priced between $300,000 to $500,000 are selling in excess of the asking price, even after list price is adjusted upwards during the listed period.
Carlsbad condos and townhomes priced at $500,000 are following the single-family market trends selling within roughly 34 days and close to 99 percent of asking price for a two-bedroom, two-bath, 1369-square-foot unit.
Attached property in Carlsbad has seen strong demand from both investor and owner-occupant homebuyers. With next to little-to-no single-family homes under $500,000, homebuyers looking to live in Carlsbad have to seek out the affordability of attached properties. Rising prices and low market time is not localized to Carlsbad and North County San Diego.
Throughout California, the median price of existing single-family homes has recorded a full year of month-to-month price increases with homes selling in almost half the time (34.2 days compared to 57.4) when compared to a year prior, according to the California Association of Realtors Our firm is currently working with a young couple trying to buy their first home. They're putting 10 percent down with a conventional loan looking around $450,000.
Their fifth and most recent attempt at securing a property saw them offer $20,000 above the listed price of the home, which was listed $25,000 above the previous most recent comparative sale of the same floorplan. Essentially, these first-time homebuyers were offering $45,000 above the most recent closed comparable in the last 60 days.
Along with their strong price, they offered to take the property in as-is condition, no termite clearance and remove all contingencies, including the loan, within 12 days. They did not have the winning bid.
Market Challenge #1: Supply.
The real estate market is recovering from a multi-year downturn in home prices that saw between 25 and 45 percent off peak pricing.
For years, foreclosure and short-sale homes made up nearly half of all available property for-sale.
Distressed property became an almost expected component of the marketplace. Yet the past 24 months of unprecedented government intervention aimed at reducing excess supply of distressed homes has achieved its goal; fewer distressed homes, higher prices and a recovering real estate market.
Welcome challenge #2:
Property Valuation
Homebuyers and appraisers are having trouble (and at times trouble agreeing on) what is a fair value in today's marketplace. Some neighborhoods have a wide swing in recent sold prices with some as much as 10 percent difference for two very similar homes. Example: Buyer number two sees a property in a desirable Carlsbad community listed $670,000.
The homebuyer successfully bids and secures the property. The buyer orders an appraisal for their loan. The value comes back $40,000 below their negotiated price. Although they were one of many buyers willing to pay the price, a low appraisal causes the buyer to second guess their purchase, or prohibits them from buying, as the bank will now require the buyer to put an additional $40,000 down to secure the loan.
The disconnect between appraised value and market value remains a key challenge in today's residential real estate market.
Many are wondering how the market could change so quickly and how long will this property fever last. Recent changes in FHA financing are causing the private mortgage insurance (PMI) to rise and increasing the monthly cost to today's borrowers. The eventual rise in today's government-subsidised mortgage rates will increase the cost of housing and possibly dampen demand. But for the short moment, the current real estate fever is expected to persist.
That average does not show that many homes are selling in the first few days of being listed or even before they are openly listed for sale. Entry level properties in Carlsbad and surrounding North County cities priced between $300,000 to $500,000 are selling in excess of the asking price, even after list price is adjusted upwards during the listed period.
Carlsbad condos and townhomes priced at $500,000 are following the single-family market trends selling within roughly 34 days and close to 99 percent of asking price for a two-bedroom, two-bath, 1369-square-foot unit.
Attached property in Carlsbad has seen strong demand from both investor and owner-occupant homebuyers. With next to little-to-no single-family homes under $500,000, homebuyers looking to live in Carlsbad have to seek out the affordability of attached properties. Rising prices and low market time is not localized to Carlsbad and North County San Diego.
Throughout California, the median price of existing single-family homes has recorded a full year of month-to-month price increases with homes selling in almost half the time (34.2 days compared to 57.4) when compared to a year prior, according to the California Association of Realtors Our firm is currently working with a young couple trying to buy their first home. They're putting 10 percent down with a conventional loan looking around $450,000.
Their fifth and most recent attempt at securing a property saw them offer $20,000 above the listed price of the home, which was listed $25,000 above the previous most recent comparative sale of the same floorplan. Essentially, these first-time homebuyers were offering $45,000 above the most recent closed comparable in the last 60 days.
Along with their strong price, they offered to take the property in as-is condition, no termite clearance and remove all contingencies, including the loan, within 12 days. They did not have the winning bid.
Market Challenge #1: Supply.
The real estate market is recovering from a multi-year downturn in home prices that saw between 25 and 45 percent off peak pricing.
For years, foreclosure and short-sale homes made up nearly half of all available property for-sale.
Distressed property became an almost expected component of the marketplace. Yet the past 24 months of unprecedented government intervention aimed at reducing excess supply of distressed homes has achieved its goal; fewer distressed homes, higher prices and a recovering real estate market.
Welcome challenge #2:
Property Valuation
Homebuyers and appraisers are having trouble (and at times trouble agreeing on) what is a fair value in today's marketplace. Some neighborhoods have a wide swing in recent sold prices with some as much as 10 percent difference for two very similar homes. Example: Buyer number two sees a property in a desirable Carlsbad community listed $670,000.
The homebuyer successfully bids and secures the property. The buyer orders an appraisal for their loan. The value comes back $40,000 below their negotiated price. Although they were one of many buyers willing to pay the price, a low appraisal causes the buyer to second guess their purchase, or prohibits them from buying, as the bank will now require the buyer to put an additional $40,000 down to secure the loan.
The disconnect between appraised value and market value remains a key challenge in today's residential real estate market.
Many are wondering how the market could change so quickly and how long will this property fever last. Recent changes in FHA financing are causing the private mortgage insurance (PMI) to rise and increasing the monthly cost to today's borrowers. The eventual rise in today's government-subsidised mortgage rates will increase the cost of housing and possibly dampen demand. But for the short moment, the current real estate fever is expected to persist.