Carlsbad's residential real estate market has shown steady sales and pricing for the first half of 2011.
This trend of stability is a welcome relief for the Carlsbad homeowners who have watched their home's value decline, on average, 22 percent from highs in 2005 for a loss of more than $185,000. But falling prices rounded out in 2010, as fewer homes for sale and low mortgage rates have created competition among home buyers. The average price of a single-family Carlsbad home in 2011 is $736,000 with an average time to sell of 55 days with sellers obtaining 97 percent of their asking price.
Carlsbad's home price decline has slowed with the help of fewer homes for sale. In 2007 and 2008, Carlsbad experienced a large influx of homes rushed onto the market. Resale, short-sale and foreclosed homes pushed active inventory levels to more than 12 months. This means that if no new homes were listed for sale, it would take 12 months to sell all of the properties. Home prices tend to fall when inventory levels go above 8 months in Carlsbad. Homebuyers have more choices and more power to negotiate better prices. Traditionally, the number of homes for sale increases from March until June. This burgeoning inventory creates competition that has a downward pressure on prices. But that trend did not occur in 2010 and it is not happening in 2011. This year the inventory levels have stayed between 4 and 5 months.
There are a number of factors helping to restrict inventory. Traditional homeowners are not selling in the down market. Some have decided to refinance their mortgage into low, 30-year fixed payment and rent their home. Those with adjustable rate mortgages have reset only to find their payments are lower and fixed for a year. And in smaller cases, banks have worked out principle reductions and or a rate drop to keep homeowners in their homes.
Changes by Carlsbad's home builders have also helped to restrict inventory. Viridian of La Costa Greens was sold from Davidson to Taylor Morrison, which delayed construction at this popular track. The Foothills, a large master-planned community in northeast Carlsbad has stopped construction on Blossom Grove, one of three communities in The Foothills. The builder, William Lyon Homes, halted further phases as it was competing with Brookfield and D.R Horton, offering similar projects to the same home buyers. William Lyon Homes decided to bow out of the unprofitable competition and is looking to sell their remaining parcels.
Foreclosure property in Carlsbad has also been restricted with a combination of foreclosure moratoriums and homeowners deciding to 'short-sell' their home in lieu of foreclosure. In 2011, short-sales have moved to encompass 25 percent of the current sold and under-contract properties in Carlsbad. A short-sale occurs when a homeowner is forced to sell, but owes more than their property is worth. Often with the help of a qualified professional, homeowners negotiate with their lender to accept less than what is owed. The new, pre-approved or expedited short-sale by larger banks like Bank Of America, is helping consumers take a second look at short-sale properties. And although a short-sale still takes longer to close than a traditional sale, buyers are pleased when they know what price and terms the bank is willing to accept.
And as of June 14th, average mortgage rates moved down again to 4.375 percent for conforming loans under $417,000. This is a powerful motivator for buyers, as it makes Carlsbad homes more affordable.
And a half-year review would not be complete without a summary of the two most expensive homes closed year-to-date. Carlsbad's most expensive home closed so far this year was on Ocean Street. It is a double lot custom home at almost 9,000 square feet. With 75 feet of beachfront originally priced at $10.9 million closed at $6.7 million in March. The runner-up was a custom home on Aviara Drive, one of Carlsbad's most prestigious streets. The 5,800 square-foot, five-bedroom home with western views, was originally priced at $3.5 million and sold at $2.6 million. The sale closed in May.
This trend of stability is a welcome relief for the Carlsbad homeowners who have watched their home's value decline, on average, 22 percent from highs in 2005 for a loss of more than $185,000. But falling prices rounded out in 2010, as fewer homes for sale and low mortgage rates have created competition among home buyers. The average price of a single-family Carlsbad home in 2011 is $736,000 with an average time to sell of 55 days with sellers obtaining 97 percent of their asking price.
Carlsbad's home price decline has slowed with the help of fewer homes for sale. In 2007 and 2008, Carlsbad experienced a large influx of homes rushed onto the market. Resale, short-sale and foreclosed homes pushed active inventory levels to more than 12 months. This means that if no new homes were listed for sale, it would take 12 months to sell all of the properties. Home prices tend to fall when inventory levels go above 8 months in Carlsbad. Homebuyers have more choices and more power to negotiate better prices. Traditionally, the number of homes for sale increases from March until June. This burgeoning inventory creates competition that has a downward pressure on prices. But that trend did not occur in 2010 and it is not happening in 2011. This year the inventory levels have stayed between 4 and 5 months.
There are a number of factors helping to restrict inventory. Traditional homeowners are not selling in the down market. Some have decided to refinance their mortgage into low, 30-year fixed payment and rent their home. Those with adjustable rate mortgages have reset only to find their payments are lower and fixed for a year. And in smaller cases, banks have worked out principle reductions and or a rate drop to keep homeowners in their homes.
Changes by Carlsbad's home builders have also helped to restrict inventory. Viridian of La Costa Greens was sold from Davidson to Taylor Morrison, which delayed construction at this popular track. The Foothills, a large master-planned community in northeast Carlsbad has stopped construction on Blossom Grove, one of three communities in The Foothills. The builder, William Lyon Homes, halted further phases as it was competing with Brookfield and D.R Horton, offering similar projects to the same home buyers. William Lyon Homes decided to bow out of the unprofitable competition and is looking to sell their remaining parcels.
Foreclosure property in Carlsbad has also been restricted with a combination of foreclosure moratoriums and homeowners deciding to 'short-sell' their home in lieu of foreclosure. In 2011, short-sales have moved to encompass 25 percent of the current sold and under-contract properties in Carlsbad. A short-sale occurs when a homeowner is forced to sell, but owes more than their property is worth. Often with the help of a qualified professional, homeowners negotiate with their lender to accept less than what is owed. The new, pre-approved or expedited short-sale by larger banks like Bank Of America, is helping consumers take a second look at short-sale properties. And although a short-sale still takes longer to close than a traditional sale, buyers are pleased when they know what price and terms the bank is willing to accept.
And as of June 14th, average mortgage rates moved down again to 4.375 percent for conforming loans under $417,000. This is a powerful motivator for buyers, as it makes Carlsbad homes more affordable.
And a half-year review would not be complete without a summary of the two most expensive homes closed year-to-date. Carlsbad's most expensive home closed so far this year was on Ocean Street. It is a double lot custom home at almost 9,000 square feet. With 75 feet of beachfront originally priced at $10.9 million closed at $6.7 million in March. The runner-up was a custom home on Aviara Drive, one of Carlsbad's most prestigious streets. The 5,800 square-foot, five-bedroom home with western views, was originally priced at $3.5 million and sold at $2.6 million. The sale closed in May.