- This topic has 15 replies, 9 voices, and was last updated 18 years ago by powayseller.
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September 12, 2006 at 2:34 PM #7482September 12, 2006 at 2:41 PM #35083ChrispyParticipant
Thanks, LukeAJ! Here’s the “loser’s list” (all off by 20% or more) – I’m tracking SF resales:
Sorrento Valley
Escondido West
Rancho Santa Fe
Encinitas
Del Mar (the biggest loser, YOY, at -30.5%)
CardiffLooks like the biggest losers are some of the nicest areas.
September 12, 2006 at 2:59 PM #35085anParticipantSorrento Valley right now have 11 listings for SFH, @ 1 sale/month, that’s 11 months of inventory. Very nice :-).
September 12, 2006 at 3:05 PM #35086heavydParticipantIs there any way to see what prices in N. County Coastal areas have done YoY on a per SQF basis? Some of these neighborhoods saw only a handful of sales in August, so could be skewed by a couple of very expensive / cheap home sales. Visited an older home in Leucadia on Sunday where owner / agent wants 35% more than he paid Q4 last year…DHH
September 12, 2006 at 3:14 PM #35088ChrispyParticipantHe must have been hanging out at the Belly Up Tavern too much lately. That’s insane – unless he’s added multiple floors, a couple of additions, a horse paddock and off-track betting concession!
BEWARE owner/agents. Talk about a double whammy.
September 12, 2006 at 3:18 PM #35089heavydParticipantSome improvements to electrical and plumbing, and minor cosmetic stuff, but no additional sq footage. My ballpark estimate is about $75K in improvements and he’s asking $300K more than he paid…! DHH
September 12, 2006 at 3:45 PM #35091ChrispyParticipantThere’s a house two blocks from mine that was purchased six months ago. The new owner (flipper) hired a couple of guys to put on a new roof, install new windows, and paint it – same dull grey as the last coat of paint.
The new price is $200K more than what he paid in March ($750K instead of $550K). I predict the last laugh will belong to us in the ‘hood, as we continue to notice the absence of moving vans.
September 12, 2006 at 3:51 PM #35093heavydParticipantI suspect this guy in Leucadia is operating on the ‘greater fool’ theory. Alternatively, I believe he may have bought the place expecting to be able to expand (it’s on a very large lot) but cannot do so due to septic system limitations. In any case there are 2 houses on the market just down the street from him asking 20% less for a LOT more square footage…and they’ve both been on the market for 100 days so far. Biding my time as a renter…DHH
September 12, 2006 at 7:18 PM #35112Steve BeeboParticipantChrispy and VRudny –
The price of any one particular house in Del Mar did not go down by 30% in the past year. You can’t use a small sample size in one zip code to gauge how prices have done in the past year.
If you don’t agree with me, you’re going to have to explain how condos in Del Mar went up 83% in the past year, SFRs in Poway went up 18%, and SFRs in Solana Beach went up 58%. I think Powayseller can concur that prices did not really go up in Poway in the past year. Those numbers are all off the same Dataquick chart.
I don’t think that median prices in one zip code over 12 months is even that accurate – there still isn’t a large enough sample size to be statistically accurate. Median prices for all of the SFRs in the County is really the only accurate statistic.
September 12, 2006 at 7:27 PM #35113speedingpulletParticipantIt’ll be accurate for the Zipcode in question…
September 12, 2006 at 7:50 PM #35114CAwiremanParticipantDel Mar and Carmel Valley New homes are up 51% and 70% respectively. Wouldn’t have expected that.
September 12, 2006 at 11:37 PM #35134AnonymousGuestSB-
You’re correct to point out that median associated with a small sample size is sometimes unreliable. However, your subsequent assertion that a statistically accurate median requires all prices from all SFRs in the county is absurd.Assuming an underlying normal distribution of home prices within any region, which is quite safe to do, standard statistical theories require only about 20 independent samples to reliably estimate the central tendency (i.e. the mean, median, or mode).
So yes, Chrispy and VRundy should be careful about reading too much of anything into the 30% drop in Delmar SFRs based on only 11 sales. At the same time there is useful information in some of the DQ numbers.
For instance, of the 43 sub-regions with greater than 20 SFR sales, 33 showed a YOY decline. To test the hypothesis that the market is flat, we assume that the chance of a decline or increase in any one region is equal to 50%. Given that assumption, the probability that one will see 33 out of 43 declining (or for that matter increasing) regions is 0.00021798 or roughly 2 out of 10,0000. So by all conventional criteria of statistical reliablity we can reject the hypothesis that the county-wide market is flat.
In addition, if we exclude all those regions with less than 20 sales and recompute the yoy change weighted by the number of sales in each of these ‘relaible’ regions, we see the mean drop for the county is closer to 3.37% YOY. Using the same back calculation including all the sales gives me a number close to the reported 2.2% YOY drop.
-timSeptember 13, 2006 at 6:19 AM #35141ChrispyParticipantThanks, WhyBuy. I’m glad you spelled out the mathematical background of the DataQuick info. Of course, being a housing bear, I also noted the small number of resale homes in Del Mar sold and thought “Not only are they off 30%, but very few are being sold AS WELL.”
It would be smarter to average all of the surrounding areas by percentages and number of houses sold, but not as much fun.
September 13, 2006 at 11:22 AM #35161powaysellerParticipantvrudny, your friends could very well be in over their heads. At 8x income, their ability to ride out bumps depends on how much they put down, and what type of loan they got. An option ARM at 7x income, with $250K down, is a disaster waiting to happen. In the last downturn, Del Mar and Rancho Sante Fe had foreclosures, too.
No area is immune to price drops and foreclosures. Just last week, someone told me that the area around Poway High School, which has some of the most expensive Poway real estate, was full of foreclosures in the early 90’s. He said the area was littered with foreclosures.
We should all expect to see the most high priced areas full of REOs in 5 years. People make the mistake of projecting today into the future. Do you rememher last year, when the media was writing only about housing as a great investment? Hardly anyone mentioned the housing bubble. I didn’t see one story about exotic lending, the danger of option ARMs, the overbuilding. Now the media is full of those stories. By next year, the stories will have shifted to banks in trouble, large number of homeowners in foreclosure, and problems at Fannie Mae. In 3 years, you will realize that 10% – 25% of For Sales signs are distress sales, or owned by the bank, and our inventory should be at 50,000 – 80,000. Maybe even 120,000. We’re going to have 100,000 people with resetting ARMs in the next few years.
From foreclosure.com, here is today’s list of
City….foreclosures…preforeclosures
Poway… 4………..44
Del Mar…..1…….12 (near Beach: Luneta Dr, but the rest are off Del Mar Heights Rd)
Rancho Santa Fe….1……11
La Jolla……..1………30
San Ysidro…..13……..56
Fallbrook……11………63
Lakeside…….13………75
National City..13………76
Carlsbad…….11……..100
San Marcos…..24……..105
Oceanside….. 38……..238
Chula vista….67……..439September 13, 2006 at 11:25 AM #35162heavydParticipantThis issue with mean and median home prices, and small-ish sample sizes (especially in the case of Del Mar and Solana Beach in August) is why I was asking about price change on a per square foot basis. That figure would still be subject to skewing (ie, a 3,000 sq ft waterfront place would sell for a lot more than a similar place 6 blocks from the beach), but probably gets us closer to actual price action. DHH
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