The Carlsbad and North County real estate markets made an abrupt turn in 2013. After years of declining prices, high market time and homebuyers calling the shots, the negotiating table has reversed in favor of the home seller. Below are three common questions arising in today's local real estate market.
Question #1: I've been looking for a home for months, but unable to find a property. When will more homes come available for sale?
With local and national home prices rising, more property is expected to come for-sale within the next year. There are homeowners who have been holding onto property solely to avoid taking a loss or having to short-sale (selling for less than owed). The large price declines from the peak market of 2004 and 2005 left many homes with negative equity.
Many of these owners were trapped. Until now.
Corelogic, the country's leading real estate analytic firm, grabbed headlines in June with their compiling of distressed housing totals. The total number of 'underwater' homes, or those homes with a value less than the principal owed on the mortgage, fell in the first quarter of 2013 to from 10.5 million to 9.7 million. Higher home prices will push more of these owners into the black and encourage them to sell. Rising prices will also tempt recent investor home buyers to cash-in on their investments as their return-on-equity shrinks. Either will provide more homes for-sale and much needed relief to a property starved marketplace.
Question #2: I'm thinking of buying a home, but with prices going higher should I hold off and wait for a dip in housing prices?
It is tempting speculate and wait for home prices to fall back to the record affordability of 2010-2012. But such a reversal-of-course in today's market is not likely with the current low number of homes for-sale and fundamentally affordable real estate. Current inventory for sellable homes in Carlsbad and surrounding North County cities remains at little more than one month. This record low level that has persisted in 2013 and is expected to continue throughout the year. Today's 30-year fixed mortgage rates of 4 percent and better are keeping homes affordable even in the face of rising prices.
Jed Kolko, chief economist for Trulia, put San Diego as 'cheaper' than renting by an estimated 34 percent. Although there are a number of factors that determine the true expense of owning a home, including the mortgage interest and property tax deduction, it appears that buying a home and holding for more than 5 years is still less expensive than renting. Waiting for housing prices to dip in the short term should prove to be a futile experiment.
Question #3: I own a home, but have been unable to refinance due to low appraisal values. Will I be able to refinance this year?
Refinancing a home has been difficult in today's real estate market. Record low rates are just out of reach for many homeowners as conservative appraisers find it difficult to find viable comparative sales.
Record low inventory has reduced the number of transactions in today's market. This leaves fewer homes sold and thus fewer comparable homes for appraisers to use in making their assessment. This should change in the coming year.
Dataquick reported that the state of California saw a 24.7 percent year-over-year median condo and single family home price increase from May 2012 to May 2013. North County and Carlsbad has seen similar numbers. Higher prices will also encourage more homeowners to sell and increase transaction volume. Whether its the chicken or the egg, both higher home prices and greater transaction volume will provide homeowners the opportunity to refinance.
Homeowners are encouraged to connect with a local real estate and mortgage professional to assess the current marketplace for both sales and rates to see if a refinance makes sense. As 30-year fixed rate, conforming mortgage rates have increased from an average 3.5 percent in March to just over 4 percent in June, homeowners are encouraged to watch the market closely.
Lund can be reached at [email protected]
Carlsbad's luxury market rebounds
Carlsbad's luxury home market is experiencing a renaissance. Single family homes priced at $1 million or more are selling faster and in greater numbers than in the previous years.
There are fewer available homes for-sale and more competition for Carlsbad's more affordable single-family homes. Multiple offers have become commonplace on Carlsbad homes priced under $1 million. Capable buyers are stepping up their price range to increase their options and find more of what they are looking for in their forever home. Unique home lots in La Costa Greens, The Ridge, Bressi Ranch, Aviara Point, The Ranch and Bay Collection are finding homebuyers more willing than in recent years to pay the necessary price to live like Carlsbad royalty.
Two recent sites in South Carlsbad stayed available for-sale throughout 2011 and 2012, unable to come to terms with conservative home buyers waiting for further foreclosure discounts. Both lots went under contract near full asking price. Twenty-one Carlsbad homes at $1 million and over have been selling per month in the past 90 days. Over double the number of luxury homes sales per month when compared to 2011 and 2012. But the luxury market is far from the sellers' market. Average market time is nearly double that of non-luxury homes with some unique property taking half a year to sell. But it is a welcomed change for those homeowners wanting to sell and allow the newest crop luxury homebuyers the opportunity to live more like Jay Gatsby.
Question #1: I've been looking for a home for months, but unable to find a property. When will more homes come available for sale?
With local and national home prices rising, more property is expected to come for-sale within the next year. There are homeowners who have been holding onto property solely to avoid taking a loss or having to short-sale (selling for less than owed). The large price declines from the peak market of 2004 and 2005 left many homes with negative equity.
Many of these owners were trapped. Until now.
Corelogic, the country's leading real estate analytic firm, grabbed headlines in June with their compiling of distressed housing totals. The total number of 'underwater' homes, or those homes with a value less than the principal owed on the mortgage, fell in the first quarter of 2013 to from 10.5 million to 9.7 million. Higher home prices will push more of these owners into the black and encourage them to sell. Rising prices will also tempt recent investor home buyers to cash-in on their investments as their return-on-equity shrinks. Either will provide more homes for-sale and much needed relief to a property starved marketplace.
Question #2: I'm thinking of buying a home, but with prices going higher should I hold off and wait for a dip in housing prices?
It is tempting speculate and wait for home prices to fall back to the record affordability of 2010-2012. But such a reversal-of-course in today's market is not likely with the current low number of homes for-sale and fundamentally affordable real estate. Current inventory for sellable homes in Carlsbad and surrounding North County cities remains at little more than one month. This record low level that has persisted in 2013 and is expected to continue throughout the year. Today's 30-year fixed mortgage rates of 4 percent and better are keeping homes affordable even in the face of rising prices.
Jed Kolko, chief economist for Trulia, put San Diego as 'cheaper' than renting by an estimated 34 percent. Although there are a number of factors that determine the true expense of owning a home, including the mortgage interest and property tax deduction, it appears that buying a home and holding for more than 5 years is still less expensive than renting. Waiting for housing prices to dip in the short term should prove to be a futile experiment.
Question #3: I own a home, but have been unable to refinance due to low appraisal values. Will I be able to refinance this year?
Refinancing a home has been difficult in today's real estate market. Record low rates are just out of reach for many homeowners as conservative appraisers find it difficult to find viable comparative sales.
Record low inventory has reduced the number of transactions in today's market. This leaves fewer homes sold and thus fewer comparable homes for appraisers to use in making their assessment. This should change in the coming year.
Dataquick reported that the state of California saw a 24.7 percent year-over-year median condo and single family home price increase from May 2012 to May 2013. North County and Carlsbad has seen similar numbers. Higher prices will also encourage more homeowners to sell and increase transaction volume. Whether its the chicken or the egg, both higher home prices and greater transaction volume will provide homeowners the opportunity to refinance.
Homeowners are encouraged to connect with a local real estate and mortgage professional to assess the current marketplace for both sales and rates to see if a refinance makes sense. As 30-year fixed rate, conforming mortgage rates have increased from an average 3.5 percent in March to just over 4 percent in June, homeowners are encouraged to watch the market closely.
Lund can be reached at [email protected]
Carlsbad's luxury market rebounds
Carlsbad's luxury home market is experiencing a renaissance. Single family homes priced at $1 million or more are selling faster and in greater numbers than in the previous years.
There are fewer available homes for-sale and more competition for Carlsbad's more affordable single-family homes. Multiple offers have become commonplace on Carlsbad homes priced under $1 million. Capable buyers are stepping up their price range to increase their options and find more of what they are looking for in their forever home. Unique home lots in La Costa Greens, The Ridge, Bressi Ranch, Aviara Point, The Ranch and Bay Collection are finding homebuyers more willing than in recent years to pay the necessary price to live like Carlsbad royalty.
Two recent sites in South Carlsbad stayed available for-sale throughout 2011 and 2012, unable to come to terms with conservative home buyers waiting for further foreclosure discounts. Both lots went under contract near full asking price. Twenty-one Carlsbad homes at $1 million and over have been selling per month in the past 90 days. Over double the number of luxury homes sales per month when compared to 2011 and 2012. But the luxury market is far from the sellers' market. Average market time is nearly double that of non-luxury homes with some unique property taking half a year to sell. But it is a welcomed change for those homeowners wanting to sell and allow the newest crop luxury homebuyers the opportunity to live more like Jay Gatsby.