A housing shortage continues in North County San Diego fueling rising home prices and sending home buyers scrambling to secure one of the few available homes. As of April, Carlsbad average single family home prices are up 9 percent compared to a year ago. Unprecedented government intervention into the real estate and mortgage markets has resulted in ultra-low financing rates and a reversal in the trend of falling real estate prices.
Only a year ago, economists were polarized on the direction of the real property market. In a May 2012 interview with Bloomberg TV, renowned economist A. Gary Shilling called for a 20 percent decline in housing prices in 2012 and forecasted that it would take several years before housing recovered. But he and other housing bears underestimated the power of ultra-low mortgage rates and investors appetite for real property. Shilling has since changed his estimates and cites the market "may" have bottomed (March 19, 2013 interview with Yahoo Finance), but expect housing to 'limp along'. But again his forecasts are showing to be irrelevant and contradictory to the most recent home sale data. Home sales in the North San Diego County real estate market are sprinting, not limping, towards new highs.
In less than 12 months, the average sale price for a 3 bedroom, 2,600-square-foot single family home in Carlsbad has risen to $768,000, up from $705,000 in 2012. The average market time has fallen from an average 52 days to less than 20 days. And the asking-price to sale-price ratio in Carlsbad moved from 97 percent of asking to 99 percent or more. The Wall Street Journal recently cited the S&P/Case-Shiller index that marked an 8.1 percent increase in average home prices within 20 major metropolitan areas for January. The fastest rise in home prices in the past 6 1/2 years.
Sycamore at the Foothills, DR Horton's new construction community off of Cannon Road in Carlsbad articulates perfectly the pace of the local real estate market. On Friday, April 12, DR Horton released its newest phase of homes and raised pricing as much as $25,000 on each of their three floorplans. A week prior to release, as the interest list of prospective buyers grew, the Sycamore's sales professionals for the tract gave advice to buyer's agents and their clients that the upcoming phase would sell in a first-come first-served basis and that it was expected for buyers to camp overnight.
Such suggestions 12-18 months ago would have resulted in laughter from the agent community. Builders were courting agents and incentivizing their clients with generous closing costs, complementary top-tier upgrades and appliance packages. Today, nearly every incentive has been eliminated. The buyer must now shoulder the cost of upgrades and exterior landscaping.
The city of Carlsbad has less than one month supply of for sale property. Carlsbad's 92010, where Sycamore is located, has only four available resale homes as of April 17, with 30 under contract or set to close.
The excess property and 'shadow inventory' bearish economists like Shilling warned of has not surfaced. North County is seeing fewer, not more, short-sale and foreclosure homes. Once making up nearly 50 percent of the active real estate market, homes under duress have fallen in prominence to less than 10 percent. Rising home prices has helped underwater homeowners refinance, sell or give the needed confidence to wait out further recovery in housing prices. Short sales and foreclosures provided homebuyers with the opportunity to purchase property at a discount. Those deals are all but gone.
In summary: fewer homes for sale, higher average home prices, sub-4 percent mortgage rates, fewer short-sales and lower time-on-market to sell.
Lund can be reached at
[email protected]
Only a year ago, economists were polarized on the direction of the real property market. In a May 2012 interview with Bloomberg TV, renowned economist A. Gary Shilling called for a 20 percent decline in housing prices in 2012 and forecasted that it would take several years before housing recovered. But he and other housing bears underestimated the power of ultra-low mortgage rates and investors appetite for real property. Shilling has since changed his estimates and cites the market "may" have bottomed (March 19, 2013 interview with Yahoo Finance), but expect housing to 'limp along'. But again his forecasts are showing to be irrelevant and contradictory to the most recent home sale data. Home sales in the North San Diego County real estate market are sprinting, not limping, towards new highs.
In less than 12 months, the average sale price for a 3 bedroom, 2,600-square-foot single family home in Carlsbad has risen to $768,000, up from $705,000 in 2012. The average market time has fallen from an average 52 days to less than 20 days. And the asking-price to sale-price ratio in Carlsbad moved from 97 percent of asking to 99 percent or more. The Wall Street Journal recently cited the S&P/Case-Shiller index that marked an 8.1 percent increase in average home prices within 20 major metropolitan areas for January. The fastest rise in home prices in the past 6 1/2 years.
Sycamore at the Foothills, DR Horton's new construction community off of Cannon Road in Carlsbad articulates perfectly the pace of the local real estate market. On Friday, April 12, DR Horton released its newest phase of homes and raised pricing as much as $25,000 on each of their three floorplans. A week prior to release, as the interest list of prospective buyers grew, the Sycamore's sales professionals for the tract gave advice to buyer's agents and their clients that the upcoming phase would sell in a first-come first-served basis and that it was expected for buyers to camp overnight.
Such suggestions 12-18 months ago would have resulted in laughter from the agent community. Builders were courting agents and incentivizing their clients with generous closing costs, complementary top-tier upgrades and appliance packages. Today, nearly every incentive has been eliminated. The buyer must now shoulder the cost of upgrades and exterior landscaping.
The city of Carlsbad has less than one month supply of for sale property. Carlsbad's 92010, where Sycamore is located, has only four available resale homes as of April 17, with 30 under contract or set to close.
The excess property and 'shadow inventory' bearish economists like Shilling warned of has not surfaced. North County is seeing fewer, not more, short-sale and foreclosure homes. Once making up nearly 50 percent of the active real estate market, homes under duress have fallen in prominence to less than 10 percent. Rising home prices has helped underwater homeowners refinance, sell or give the needed confidence to wait out further recovery in housing prices. Short sales and foreclosures provided homebuyers with the opportunity to purchase property at a discount. Those deals are all but gone.
In summary: fewer homes for sale, higher average home prices, sub-4 percent mortgage rates, fewer short-sales and lower time-on-market to sell.
Lund can be reached at
[email protected]