Carmel Valley Monitor

[sdrealtor]

Time to update everyone’s favorite bellweather;)

7/19 to 7/25

new listings – 12
back on market – 1

Total growth in inventory – 13

pendings – 11
expired – 4
withdrawn – 1
cancelled – 2

Total decrease in inventory – 18

Net change in inventory – minus 5

Random thoughts

Inventory trending down. It has been quite a while since inventory actually increased during a week. MOst of the pendings this week were $1M+.

I was out showing property to client today in Encinitas/South Carlsbad. We looked at detahced homes up to the low 700’s and some of the nicer/larger attached homes in the area up to the low 600’s. Inventory is pretty thin around here. We looked at what I would consider the best 15 to 20 properties on the market. Forgetting prices, the houses were virtually unliveable with the exception of 2 or 3. Even if they lowered the prices 10% below recent comps they would have a tough time selling. The beauty contest winners have been chosen this Summer and we are left with alot of red headed step children. IMO these homes are unsellable or sellable only at prices that will put up some ugly new comps. Most had long time owners with tons of equity and I suspect at least half of them will end up on the rental market.

[sdrealtor]

Time to update everyone’s favorite bellweather;)

7/19 to 7/25

new listings – 13
back on market – 3

Total growth in inventory – 16

pendings – 11
expired – 5
withdrawn – 1
cancelled – 4

Total decrease in inventory – 20

Net change in inventory – minus 4

Lots of bad news in the media but not here. Market still holding up so far. Spoke to several agents this week about what the listings look like in their offices. Over the last month or so, new listings are way down. The bulk of the new listings seem to be REO’s and probate sales in the outlying areas. In my submarket the number of listings put into the MLS in July 2007 is down 20% from last year. Declines are coming, it is just taking time.

[sdrealtor]

Time to update everyone’s favorite bellweather;)

7/19 to 7/25

new listings – 13
back on market – 3

Total growth in inventory – 16

pendings – 11
expired – 5
withdrawn – 1
cancelled – 4

Total decrease in inventory – 20

Net change in inventory – minus 4

Lots of bad news in the media but not here. Market still holding up so far. Spoke to several agents this week about what the listings look like in their offices. Over the last month or so, new listings are way down. The bulk of the new listings seem to be REO’s and probate sales in the outlying areas. In my submarket the number of listings put into the MLS in July 2007 is down 20% from last year. Declines are coming, it is just taking time.

[JJGittes]

Question: if the number of listings are down 20% from last year, why does that portend declines in your submarket? Less inventory is not usually bad for prices, correct?

[JJGittes]

Question: if the number of listings are down 20% from last year, why does that portend declines in your submarket? Less inventory is not usually bad for prices, correct?

[sdrealtor]

JJ
You are correct that less inventory is not generally bad for prices. The coming decline is my opinion. In general, I feel it will be due to the eventual shift of inventory from nicer homes being sold by choice to crappy homes being sold under distress. There isnt much distress in my submarket yet but it’s coming. I dont see it really hitting around here until 2010 for better homes. There arent as many Option ARM timebombs floating around here IMO. I beleive there most homes in my area were bought/refinanced at the peak with 5/1 ARM’s which dont reset until 2009 or later. If someone wants to sell but doesnt like the prices, many will hold on or keep it as a rental. 20010 is where I see the real potential for damage around here. Of course, there are alot of things that could happen between now and then which could change my opinions and the outcome. For someone looking seriously around here (North county Coastal) I think you’ll need alot of patience or alot of money for the foreseeable future. Personally, my timeframe for buying investment properties and my retirement home is 5 to 20 years. I’m certainly in no rush, are you?

sdr

[sdrealtor]

JJ
You are correct that less inventory is not generally bad for prices. The coming decline is my opinion. In general, I feel it will be due to the eventual shift of inventory from nicer homes being sold by choice to crappy homes being sold under distress. There isnt much distress in my submarket yet but it’s coming. I dont see it really hitting around here until 2010 for better homes. There arent as many Option ARM timebombs floating around here IMO. I beleive there most homes in my area were bought/refinanced at the peak with 5/1 ARM’s which dont reset until 2009 or later. If someone wants to sell but doesnt like the prices, many will hold on or keep it as a rental. 20010 is where I see the real potential for damage around here. Of course, there are alot of things that could happen between now and then which could change my opinions and the outcome. For someone looking seriously around here (North county Coastal) I think you’ll need alot of patience or alot of money for the foreseeable future. Personally, my timeframe for buying investment properties and my retirement home is 5 to 20 years. I’m certainly in no rush, are you?

sdr

[JJGittes]

I’m in no rush, but I am also in the minority in that I don’t care a whole lot about what prices do as long as the home I currently own holds up well against where I want to go. Since I am not a market timer when it comes to my primary residence (which I’ve owned since 1998), moving for me at some future point will be just a lateral transfer of equity (since I don’t see a long term rental as a viable thing for our family). Of course you want to maximize the sell/buy deals for yourself, but I am not going to lose sleep over it.

Now, if I had been a renter for the last 10 years and I was looking for a place to jump in, I might feel differently and consider waiting this thing out some more, as most on this site seem to favor.

[JJGittes]

I’m in no rush, but I am also in the minority in that I don’t care a whole lot about what prices do as long as the home I currently own holds up well against where I want to go. Since I am not a market timer when it comes to my primary residence (which I’ve owned since 1998), moving for me at some future point will be just a lateral transfer of equity (since I don’t see a long term rental as a viable thing for our family). Of course you want to maximize the sell/buy deals for yourself, but I am not going to lose sleep over it.

Now, if I had been a renter for the last 10 years and I was looking for a place to jump in, I might feel differently and consider waiting this thing out some more, as most on this site seem to favor.

[sdrealtor]

JJ,
We are pretty much in the same boat having bought my current primary around the same time. I share you lack of concern re the value of my house because I know it will always perform better than the market around me for a variety of reasons. I doubt that I would ever sell my house and am really looking to buy 2 more properties. One just like the one I have (so that my kids will each get one) and another by the beach for me and the Mrs. to retire to. Whether the kids ultimately decide to keep them will be their choice but they would both be great rentals or primaries with very low tax basis.

I always look 10 to 20 years ahead in my decision making.

[sdrealtor]

JJ,
We are pretty much in the same boat having bought my current primary around the same time. I share you lack of concern re the value of my house because I know it will always perform better than the market around me for a variety of reasons. I doubt that I would ever sell my house and am really looking to buy 2 more properties. One just like the one I have (so that my kids will each get one) and another by the beach for me and the Mrs. to retire to. Whether the kids ultimately decide to keep them will be their choice but they would both be great rentals or primaries with very low tax basis.

I always look 10 to 20 years ahead in my decision making.

[sdrealtor]

JJ,
We are pretty much in the same boat having bought my current primary around the same time. I share you lack of concern re the value of my house because I know it will always perform better than the market around me for a variety of reasons. I doubt that I would ever sell my house and am really looking to buy 2 more properties. One just like the one I have (so that my kids will each get one) and another by the beach for me and the Mrs. to retire to. Whether the kids ultimately decide to keep them will be their choice but they would both be great rentals or primaries with very low tax basis.

I always look 10 to 20 years ahead in my decision making.

[JJGittes]

Long term view is good. As ugly as RE appears now, the fact of the matter is that nearly everybody I know who is in their late 40’s and older in the SD area, and has big money, made most of it thru real estate.

There are a few who hit big with qcom, a few who earned it simply from their jobs (I have a plastic surgeon friend), and a smattering of others, but the vast majority of ‘regular’ folks I know who did well attribute it to California RE.

I don’t know what lies ahead in the near future, but a lot of people have done very well in this state over the long haul with RE.

You have to go a long way east to get the Coronado, LJ, Del Mar, Solana Bch, Enc, Carlsbad scene anywhere else, if you can even find it on the other coast…

[JJGittes]

Long term view is good. As ugly as RE appears now, the fact of the matter is that nearly everybody I know who is in their late 40’s and older in the SD area, and has big money, made most of it thru real estate.

There are a few who hit big with qcom, a few who earned it simply from their jobs (I have a plastic surgeon friend), and a smattering of others, but the vast majority of ‘regular’ folks I know who did well attribute it to California RE.

I don’t know what lies ahead in the near future, but a lot of people have done very well in this state over the long haul with RE.

You have to go a long way east to get the Coronado, LJ, Del Mar, Solana Bch, Enc, Carlsbad scene anywhere else, if you can even find it on the other coast…

[JJGittes]

Long term view is good. As ugly as RE appears now, the fact of the matter is that nearly everybody I know who is in their late 40’s and older in the SD area, and has big money, made most of it thru real estate.

There are a few who hit big with qcom, a few who earned it simply from their jobs (I have a plastic surgeon friend), and a smattering of others, but the vast majority of ‘regular’ folks I know who did well attribute it to California RE.

I don’t know what lies ahead in the near future, but a lot of people have done very well in this state over the long haul with RE.

You have to go a long way east to get the Coronado, LJ, Del Mar, Solana Bch, Enc, Carlsbad scene anywhere else, if you can even find it on the other coast…

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