What is new with Carmel Valley Real estate and Torrey Hills real estate - 92130 zipcode. The inventory level tells the story. The following chart breaks down the inventory into price range categories by single family attached and single family detached homes. The information is current as of October 20, 2009.

Your budget is going to be a clear indicator whether you need to look at a condo or townhome or if you should be looking for a detached home.

Other recent San Diego Real Estate Market Reports:
Will SELL Your Home in 6 years + 4 months, or less - GUARANTEED!!!
San Diego Homes for Sale - Months of Inventory - October 2, 2009
San Diego Homes for Sale - Median Home Price drops 7.24% in last 12 months
San Diego Home Sales Continue Normal Pace for September 2009

What is new with Del Mar real estate and homes for sale. The inventory level tells the story. The following chart breaks down the inventory into price range categories by single family attached and single family detached homes. The information is current as of October 20, 2009.

Price ranges with no sales but active listings assume are approximated based on nearby price ranges. The low price points show reasonable market strength, up to about $1.5m for a detached home. Overall, there are 12 months of inventory.

Other recent San Diego Real Estate Market Reports:
Will SELL Your Home in 6 years + 4 months, or less - GUARANTEED!!!
San Diego Homes for Sale - Months of Inventory - October 2, 2009
San Diego Homes for Sale - Median Home Price drops 7.24% in last 12 months
San Diego Home Sales Continue Normal Pace for September 2009

With the end of the summer buying season for Rancho Santa Fe real estate and homes for sale, it is prudent to keep a close watch on the inventory level as it directly affects the the Rancho Santa Fe home prices and especially the time on market. The following chart breaks down the inventory into price range categories. The information is current as of October 19, 2009.

P.S. Unless you want to have your home on the market for 9 years, I suggest you avoid the $4.2m price range.

Other recent San Diego Real Estate Market Reports:
Will SELL Your Home in 6 years + 4 months, or less - GUARANTEED!!!
San Diego Homes for Sale - Months of Inventory - October 2, 2009
San Diego Homes for Sale - Median Home Price drops 7.24% in last 12 months
San Diego Home Sales Continue Normal Pace for September 2009

With the end of the summer buying season for La Jolla homes for sale, it is prudent to keep a close watch on the inventory level as it directly affects the the La Jolla home prices and especially the time on market. The following chart breaks down the inventory into price range categories. The information is current as of October 19, 2009.

P.S. Unless you want to have your home on the market for 7 years, I suggest you avoid the $3.3m price range.

Other recent San Diego Real Estate Market Reports:
Will SELL Your Home in 6 years + 4 months, or less - GUARANTEED!!!
San Diego Homes for Sale - Months of Inventory - October 2, 2009
San Diego Homes for Sale - Median Home Price drops 7.24% in last 12 months
San Diego Home Sales Continue Normal Pace for September 2009

People often knock the "speculators" who are "responsible" for this housing mess that we are in. It just isn't so... or perhaps it would be more realistic to say each and every one of us is a speculator... whether you buy real estate or not... so take that log out of your own eye first.

From the American Heritage Dictionary, first definition

a. Contemplation or consideration of a subject; meditation.
b. A conclusion, opinion, or theory reached by conjecture.
c. Reasoning based on inconclusive evidence; conjecture or supposition.

Dictionary.com, "speculation," in The American Heritage® Dictionary of the English Language, Fourth Edition. Source location: Houghton Mifflin Company, 2004. http://dictionary.reference.com/browse/speculation. Available: http://dictionary.reference.com. Accessed: October 19, 2009.

The reality is that _ANY_ plan for the future is speculation.

Has anyone ever asked you, "How long do you plan to stay?" Pure speculation. I plan to stay five years, providing I don't get transferred, get another job, get laid off, etc.

What do you expect unemployment to do in the next five years? When honest people bought their homes in 2004, who knew we've be at 9.8% unemployment nationally in double digits in many of the states? If unemployment keeps rising, maybe we'll see more foreclosures.

Today a potential homebuyer might be wondering how the increasing mortgage delinquencies, mounting foreclosures and shadow inventory are going to rock their world. Did you know that the government programs are enabling some owner occupants to have their interest rate reduced to as low as 2% for the next 5-years. If the banks could handle the resets, maybe there will be a halt to future foreclosures. But perhaps this has just shifted the problem to the right by five years.

For years we've heard, "Interest rates are at historic lows... buy now before they go up." This is a chant I still hear today, "a little bit louder now," because a) they can't remain this low forever and b) we're headed for hyper-inflation.

With the expectation that our government seems intent on printing money as a way out of our national problems, the concern over inflation (even hyper-inflation) is credible.

• Hyper-inflation could shoot home prices to the stars as a great hedge against inflation. Let's go buy up all the foreclosures at fabulously low interest rates as fast as we can.

• But then, interest rate increases could bring home prices down.

Everyone of is betting on the future. And because there are so many unknowns, we simply assume that things will go on much the same as they have. Some will bet that housing is a good investment and buy while others will bet that it is better to rent and decide not to buy. Such "reasoning based on inconclusive evidence; conjecture or supposition" makes us all speculators.

To reply to the angry critics before they get started...

To be certain, there were those speculators who fell into the fourth definition:

d. Engagement in risky business transactions on the chance of quick or considerable profit.

But, the mess we are in today was not caused by the few "Type D" speculators. Like most automobile accidents, it was a culmination of little things that all added up.

Food for speculation...

Federal Reserve Board Delinquency Rates Soar Exponentially
No Shadow Inventory of Bank Owned Homes
Recession is over; Depression has just begun
The Effect Of Unemployment Upon Housing For 2010

San Diego Home Sales Continue Normal Pace for September 2009
San Diego Homes for Sale - Median Home Price drops 7.24% in last 12 months
San Diego Homes for Sale - Months of Inventory - October 2, 2009

In the attached image, we can see how mortgage delnquencies have shot up exponentially from 2006 and it looks like consumer credit delinquencies are following.

Not that it is any surprise, but we can clearly see that our situation is far worse than our last crash about 1990.  The data shown is through Q2 2009 (seasonally adjusted), directly from the Federal Reserve Board's web pages.  However, given the increase in unemployment, I can only imagine that the delinquency rate is growing.  (I'll post Q3 as soon as I see it come out.)  In fact, going back to 1990-1991, we can see that there was a "slowing" in delinquencies before the peak in Q2 1991.  When we look at the present data, there is no slowing.  In fact, it looks like continued acceleration.  I will guess that for Q3 we will be over 9 for mortgage delinquencies.

Banks and any reliance on government programs are not going to be able to handle this rate of increase.  Not only will their loss mitigation departments for loan modifications not be able to keep up, but their REO departments are going to be hard pressed as well.  Besides the social engineering aspects, I think it likely that the only thing holding back a wave of foreclosures is the banks inability to process them fast enough.

Unfortunately, this is a national chart, so it is impossible to say how this will affect any given area... but it sure doesn't look good.

I always love to hear the advertisements with a guarantee on the number of days it will take to sell your home - especially when you discover the small print requires massive discounting. I decided it was time to take a look at just the higher end of our market - San Diego Homes for Sale at $1,000,000 and above.

San Diego is home to communities of Coronado, Point Loma, La Jolla, Del Mar, Solana Beach, Encinitas, Carlsbad, Rancho Santa Fe, with the majority of the million-plus dollar properties being La Jolla homes for sale and Rancho Santa Fe homes for sale.

Looking at the chart, we can see the consequences of natural human pricing behavior - to create an imagined price point break at common numbers - usually where we roll-over into the next million. We see a spike in months of inventory at:
$1.9-2m range ==> 36 months
$2.4-2.5m range ==> 33.6 months
$2.9-3m range ==> 59.3 months
$3.9-4m range ==> 63 months
The $4m+ range just catches all the truly unique homes for which there are very few buyers.

It would seem to me that the best way to help your seller is to NOT be lumped in with all the other people trying to create an illusion about the home price. You could try to be tricky and market a property at $1,999,999, so as to not break the $2m barrier, and you should clearly inform your seller that they should expect the property to take 3 years to sell. But the reality is that you should expect to lose about 5% ($100K) on a negotiated price discout. How about cutting the time to sell the property by standing out from the competition. Market it at $1,899,999 and expect it to sell in less than half the time - a mere 17.9 months (and stick more tightly to the asking price during negotiations).

Not to be (too) flip, but when you get to this price range, $100K (asking) doesn't really make that much of a difference - it is all in the mind of the seller anyway. Ultimately, isn't it the selling price and the time on market that the seller cares about?

Back to the title... 6 years and 4 months. The other "clever" pricing strategy is to repeat digits. $2.2m or $3.3m. What an ugly mess that brings us to. The amount of inventory for homes listed from $3,300,000 to $3,399,999 is 76 months (6 years + 4 months). Did you advise your client they could go from childless to kindergarten before their home is expected to sell? Did you tell them their high school senior will graduate from college before their home sells (and on the 5-year plan as well)? But drop the ASKING price just one notch and the months of inventory drops to less than half (sadly it is still almost 3 years - so send the kid to vocational school instead).

If your are looking for other San Diego Real Estate or San Diego Homes for Sale, you can find them here:

The stats are in for September. It would seem that for detached homes the sales for last month are only slightly below the median. It is reassuring that we have bounced back from the premature August dip. I have to wonder what we might have seen if San Diego foreclosures had not been so stymied by the moratorium.

The story is slightly better for single family atached homes.

As ONE indicator of market health, things would seem to be stable. However, we will have to wait to discover if the first time homebuyer credit is extended and whether or not that has any net effect on the rate of sales. Given that 350,000 (about 20%) of all sales have been credited to the tax credit, it seems likely we could take a nosedive if the credit is not extended. As it is, if it is extended, we may still take a dip as the hard deadline to beat will have been eliminated.

If you are looking for a property that is a good investment (or can be once you are done living there), check any of the following three links:

If your are looking for other San Diego Real Estate or San Diego Homes for Sale, you can find them here:

With the end of the summer buying season for San Diego homes for sale, it is prudent to keep a close watch on the inventory level as it directly affects the the San Diego home prices. The following chart breaks down the inventory into price range categorys. The information is current as of October 2, 2009.

In terms of change, single family attached homes have less inventory, across the board, up to $900,000. San Diego single family detached homes for sale had less inventory across most price ranges, with only a slight increase (less than 2/10th of a month) between $350,000 and $600,000.

Barring outside influences, home prices are expected to be stable or inch-up through the end of the year.

The most significant outside influence is the first time homebuyer tax credit. According to NAR reports, this is responsible for approximately 20% of all sales in the last year. With the tax credit about to expire, home sales... at least until such time as an extension is announced. Given the current limited inventory, home prices are not likely to suffer much over the next several months.

If your are looking for other San Diego Real Estate or San Diego Homes for Sale, you can find them here:

As the following chart shows in regards to San Diego homes for sale, the median home price has dropped 7.24% from September 2008 to September 2009. Please note, the chart specifically targets 3-bedroom, 2-bath homes as this configuration provides the most stable method of measurement.

It is always useful to compare the price per sq ft to see if the buying pattern is affected by the size of home. In the next chart the San Diego home sales are plotted both by price and price per sq ft. Apparently the home sizes are shrinking slightly as the decline in the price per sq ft is only a decline of 5.64%.

It is somewhat interesting to see that only in the last year have we seen a difference is the rates of change of price and price per sq ft. If this is any indication, it would appear that basic inflationary pressures are also at work in slowing down the decline in the cost of housing.

Credit Card Charge-off Index increases from 9.5% in July to 10.5% in August. Wait, you say, "10.5% - 9.5% = 1%," where does this 10.5% "increase" non-sense come from? Sometimes it is not about the increase in absolute percentage (1%), but about the relative percentage (10.5% / 9.5% = 10.5%).

Beyond being a numbers geek and playing with the math, what does this mean? The credit card charge-off index is much like our foreclosure index; it tells us how many people are walking about from their debt. This is a sizeable increase and it signals a continuing worsening of the overall economy. Yes, I know this statement is in direct contrast to all the national news about recovery on the way.

Why the disconnect? It would seem this charge-off index is a trailing indicator. After all, the whole credit card model is buy now pay later. So, failure to pay will naturally be delayed months from the actual purchases. So, maybe we are actually at the cusp between decline and recovery.

I really hate to be pessimistic, but I am going to guess that there is a fairly direct correlation between charge-offs and unemployment. And, unfortunately, unemployment continues to rise. So I am going to guess that this charge-off index is also going to increase in the months to come. Sub-prime and Alt-A resets aside, this is bound to have an effect on foreclosures as well to keep downward pressure on home prices. But, if the national news is correct, if we are beginning a recovery, then this would seem to be evidence of a slower recovery.

Rather than being soured by this news, let's go find the lemonade stand.

The FEDs announced yesterday that they will keep short term interest rates stable at 0.0% - 0.25%, which can be taken as an expectation that our long term interest rates will remain stable, south of 6%. Combined with the downward pressure on home prices, this is great news as it will help to keep up the affordability index. Thus, we have first time homeowners more able to enter the market. And, for the investor crowd, there are great investment property opportunities that may be found using the FinestExpert.com cashflow search engine. In fact, any property that is cashflow positive for the investor ought to be a serious consideration for the first time homebuyer because it would mean that the rent is greater than the cost of ownership.

According to a recent article by the Huffington Post, “2.5 million homes have been converted into rentals,” since 2007 and about 3.2 million since 2005. These conversions account for approximately 85% of all “new” rental property. One of the three primary reasons is that many “buyers of foreclosed [and short sale] properties are renting out the homes.”

If it makes good financial sense for an investor to own the property and rent it out (e.g., positive cash flow - see the cashflow search engine), then doesn't it make even better sense to be an owner occupant? The average home ownership rate, over the past 40 years, is 65.4%. We are currently 2% above average. Are we doomed to fall back to that level?

If your are looking for other San Diego Real Estate or San Diego Homes for Sale, you can find them here:

A few hours ago, I wrote San Diego Single Family Detached Homes - Sales Rate Drops Precipitiously in August 2009. We just saw about a 20.6% decline in sales from July to August 2009. But, I included the speculation that the decline is less a sign of disinterest but rather lack of inventory.

In the chart below, we see that for single family detached homes we have just about 1-month of inventory for prices up to $350K, and less than 3-months inventory for up to $600,000. For single family attached homes, we have about 1.5 months of inventory for prices up to $300K and less than 3-months for up to $450K.

You may want to compare this chart with last month San Diego Real Estate - Months of Inventory - Market Report - July 2009 when our sales rates were higher, but so was our inventory. The most noticeable item is the continued reduction in inventory across all price ranges.

At the "normal" end of the market, it is definitely a sellers market.

The June 15th foreclosure moratorium of 90 days will expire in 3 days. Let's see how much inventory the banks start putting on the market.

If your are looking for other San Diego Real Estate or San Diego Homes for Sale, you can find them here:

A 20.6% decline in the rate of sales between July and August 2009 for Single Family Detached Homes in San Diego is about as sharp a decline as we may ever see. As one measure of the health of our housing industry, what does this information tell us?

We can see that a July to August decline is fairly typical, but this drop is extreme.

From some other stats, our total months of inventory is 2.8 months, but only 1.5 months up to $500,000.

At this point, I would offer that the decline is sales is linked more with the low inventory than anything else. The low inventory is tied most tightly with the foreclosure moratoriums (which are due to expire in a few days).

Knowing how many offers are occuring on nearly every home placed on the market, I believe if we have a reasonable release of foreclosures (say no more than 5,000 - to bring us to 4.5 months inventory) we will have swelling sales this fall / winter. (I believe also that I make that statement without Pollyanna's rose-colored glasses.)

The San Diego Residential Real Estate Market is down to one month of inventory in most price ranges for single family detached homes and down to three months of inventory for attached homes. Is inventory a "cause" or an "effect" or a little of both?

Anyone who is active in the market already knows that it is a terrible struggle to find a home for everyone from investor to first time homebuyer to move-up buyer looking for a conforming loan. And you may have noticed it has been getting more difficult as the summer wore on. Below is the months of inventory chart from the end of April. Comparing the two charts, you can clearly see how our inventories have shrunk over the last three months.

One thing I find striking about the two charts is that the detached homes up to $600,000 are now in a seller's market whereas three months ago you had to be less than $450K. The slow trickle of REOs has been, in my opinion, too slow. I suppose it would be nice if the rate of release should attempt to keep a stable inventory amount.

From a price bottom, we are clearly there. In fact, based on sales close dates, our bottom was March. If we consider 60-days from offer to closing, then we were really at the bottom in January.

Now... having said all that. You will also notice from the months of inventory chart that we should probably refer to our market in three parts. Below $600K, $600-800K, and $800K+ for detached homes. The $600-800K range is living within a "normal" market behavior at the moment. However, the upper-most end of the market is still clearly suffering (detached properties over $800K and attached over $600K). Not only is their pain not over, but the dooms-and-gloom people are (whether they understand it or not) are referring to this segment of homeowners who are soon (between now and 2012) to have their loans reset. For those with documentable income it won't be too bad, but for the self employed, it is going to be a bear.

Just as we cannot refer to a national temperature or a national housing market behavior, even in San Diego we have multiple components. One part of our market is very active / very strong. Another part is still weak and still expects more pain.

As far as the shadow inventory - it will only hurt us (at this point), if it gets dumped all at once onto our market. Baring that, it looks to me like single family _detached_ homes are going to remain strong at the low end. The attached homes and their HOAs are another discussion entirely.

FYI - I was just referred to a recent San Diego News Network article "Economist Sees Rebound for San Diego Real Estate Market." at: http://www.sdnn.com/sandiego/2009-08-18/business-real-estate/economist-sees-rebound-for-san-diego-real-estate-market

A month ago I posted that San Diego Residential Real Estate Sales Volumes are "Normal". Although accurate (we are within 1-sigma of average sales volumes), it did not address our shrinking inventory. That lack of inventory driving our supply and demand behavior, has pushed prices up. The following charts show that our median home price has been "steadily" increasing. Prices, on average, are about $25-50K higher than in March. In just a short five (5) months, we have seen an increase of10-20% in the median home price.

Admittedly there is a component of this growth which is seasonal. However, last April I posted "Truth" about the San Diego Residential Real Estate Market. which identified the dichotomy between months of inventory at the low end of the price range (under $450K) as compared to higher priced properties. The short of that story is that it is actually a seller's market with less than 3-months of inventory for prices under $450K.

Not only have the prices increased, but the trend as a whole, as evidenced by the trendlines for the above chart, show that we are in for further price increases.

I suspect this trend will continue until one of several things happen. Either a) the foreclosure moratorium ends and we start to see a steady stream or b) homeowners who had been sitting on the sidelines avoiding selling until such time as the market turned around recognize that now is their opportunity.

On the foreclosure angle, my understanding is that for California, we should have had about 11,000 last month and instead only had about 2,500. The reason, I'm told is the processes that have been put in place to help keep people in their homes. I am (cynically) sure that the program did not save 8,500 homes from foreclosure, which means that we are incuring a backlog - along the lines of our national debt. However, the program is surely not going away which means the foreclosures are just going to trickle out, and will be absorbed quickly by a greedy market. (Yes, there is still a chance there will be some massive release of back-up, but I've heard of nothing in the works.)

That leaves homeowners getting back into the selling game. And that, I believe, will not happen for a little while, until the nation as a whole is under the media influence that the downturn is over.

P.S. My belief is not reliant simply on these two charts, but many more that I've been working on and will post in due time.

Robert T. Boyer, Ph.D. Licensed Realtor® #010791063 RobertBoyer.Realtor@gmail.com

VP San Diego's Finest Real Estate Real Estate Investor Advisor Real Estate Financial Planner (858) 755-2111 Co-Founder & CMO FinestExpert.com The Cashflow Search Engine Property Search by Investor Criteria Home of the FE-Score Rating System San Diego Foreclosures and Real Estate Investment Property Your San Diego CA Real Estate and San Diego REO Specialist Call us for La Jolla Real Estate, Del Mar Real Estate, Carmel Valley Real Estate, Solana Beach Real Estate, Rancho Santa Fe Real Estate Serving North County San Diego Real Estate including: La Jolla, Del Mar, Carmel Valley, Rancho Santa Fe, Solana Beach, Cardiff by the Sea, Encinitas, Leucadia, Carlsbad, Oceanside, Vista, San Marcos, Escondido, Rancho Bernardo, Poway, Rancho Penasquitos, Scripps Ranch, Tierra Santa, Mira Mesa, Sorrento Mesa, University City

Wow, I had a great chance to meet a ton of interesting people at the Inman conference in San Francisco.  There were about 20 of us in the "Startup Alley" showing off the newest technology in real estate.  Some of the most notable were:

- FinestExpert.com - cash flow search engine and the first ever property rating system for residential investments.  My (biased) favorite.  Everybody loved what the system could do for them.  Everything on the site today, investor criteria based search, property reports, rental comps, market trend charting is free for agents.  A lot of it can be plugged in directly to their sites.  We had a lot of great conversations and I'd love to list all the interesting people we met but it's been a long day and it's really late.

- Viscape - "visualize your escape" to explore your dreams, pursue your passions, rent or buy vacation properties

- ListingPress - a WordPress plugin.  They looked to have some really cool capabilities, but I got distracted and didn't get to take it all in.  They definitely are on my list to get back to.

- iPromote - put in your site's URL and they automatically create meaningful ads for your site... and then set you up on a pay-per-click model.

- NationalBLS - think buyer listing service - they are working to pre-qualify buyers with and then reverse prospect to find seller and homes.

There were fifteen othes - but did I mention it was a long day and it's late.  You can see the full list over at http://www.inman.com/events/real-estate-connect-san-francisco-2009/start-up-alley

There are two parts to the market health that we have all been watching, price and quantity of sales. The following chart shows the average number of detached home sales in San Diego, on a per month basis. The error bars indicate +/- 1 standard deviation. We can see that our lowest point, both numerically and relative to the norm was September 2007. Since then we have been climbing back into the normal expected range of sales.

From a quantity of sales perspective, it looks fair to say that San Diego has stabilized (starting about June 2008)