The Lund Team Real Estate Blog » Stats

SmartMoney’s New Rules For First-Time Home Buyers

admin — Fri, 11 Mar 2011 06:12:41 +0000

SmartMoney has come out with a new set of rules for First Time Home Buyers:

1) More Money Down

2) Stay For a Decade

3) Prepare For Competition

Without a house to sell, first-time buyers have had a field day in the depressed housing market. Until recently, anyway. A series of new rules, regulations, and policies have changed the landscape, making buying that new home harder and more expensive. Read Full Story At SmartMoney

Home Sales Decline in December? Bad Stats

Tyson Lund — Mon, 25 Jan 2010 17:52:41 +0000

Here is an example of biased stat making not painting the whole picture.

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WASHINGTON (MarketWatch) – Sales of U.S. existing homes plunged 16.7% in December to a seasonally adjusted annual rate of 5.45 million from 6.54 million in November as a popular tax credit was set to expire, a national real estate trade group estimated Monday. The 16.7% percentage decline from November to December was the largest on record, the National Association of Realtors reported. The decline was larger than the 11% drop to 5.80 million that was expected by economists surveyed by MarketWatch. Sales in December were up 15% compared with December 2008. The median sales price rose to $178,300 in December, up 1.5% compared with a year earlier. It’s the first year-over-year increase in prices since August 2007. Link To Article

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You know this bias play on Stats. But why pick the ‘Decline’ stat? These are positive numbers. Here’s what I read of the sales drop in December.

- True lack of available property unlike any year previous. Less homes = fewer sales. Fewer homes than ‘economists expected’ – but UP 15% over same time period in 2008.

In most areas of the country, home sales decline in December. Banks, lenders and appraisers have almost 1/3 less time in the month to get the homes processed and closed. North County home sales have declined as much as 30% – even in the go-go years of 2002-2004. I would like to see year on year comparison for the past decade of the same time period.

And I would like to see the sales figures put up against # of homes for sale. If the ‘months of inventory’ nationally is similar to North County figures of 2-3 months…then low sales figures is a function of lack of available inventory. The headline would suggest a decline in sales; which infers less demand and a softening market.

The headline could read

“Home Sales up 15% – Prices push higher”

“Home Values Inch higher: Sales up 15% over 2008″

A sales decline is more relevant when sellable inventory is above 12 months; or a changing pace is leading that direction. Price declines can be expected when property competes.

Just a thought. Tyson Lund

Water’s End “Best Value West of I-5” in Carlsbad

Garrett Lund — Sat, 26 Dec 2009 17:26:37 +0000

Looking for a gated, newer, walk to the beach location in Carlsbad, California… think Water’s End?

Built by John Laing Homes (known for quality product) in 2003. this is a neighborhood to keep on your 2010 radar.

Market update:
2009 – average sales price for last 6 months Dec – July = $710,000 at $302 per sq. ft.

2005 – average sales price for Dec – July = $925,000 at $382 per sq. ft.

(10) NOD, Bank Owned, Preforclosures notices currently on tax records. – Be on the lookout for more in 2010…

I used numbers based on same time period of the year to illustrate the value one can now find at the beach. Over $200,000 off the selling price just a few years ago. With no new additional land being added at the coast please consider this as a wonderful place to live and invest.

**Water’s End deal of 2009 – Over 2,300 sq. ft. sold at $660,000 (cash sale) in September – Bank Owned! **

The Lund Team has represented buyers, sellers, builder (John Laing Homes) and currently owns an investment home in Water’s End. Please consider us for any of your buying or selling needs.

Contact Contact@LundTeam.com or call 760.438.0800.

Water's End by Lund Team

So, What’s The Price?

Tyson Lund — Thu, 17 Dec 2009 01:13:42 +0000

The once dominant pricing strategy of San Diego was used less in 2009. Only 12% of over 32,000 homes sold in the county used a Value Range. Value range pricing is when a home is sold with a high and a low price. For example: “Seller will entertain offers between $500,000 and $525,000”.

The idea is to encourage negotiations between a buyer looking at the bottom end price and a seller hoping to negotiate to the higher end. In 2005, value range pricing was the preferred way to price a home in San Diego County with over 50% of the properties utilizing a range. It was common to have multiple bidders bid over the “top end” of the value range.

The current real estate market is remarkably different than 2004 and 2005. Buyer’s are bargain hunting and look to the low part of the value range and negotiate down. And the Seller risks overpricing the top of the range and alienating buyers from the offset.

But range pricing began in a similar down market in 1995. It proved effective in increasing the number of property showings. What was found is that with more people walking through a property, even if it was only to “bottom fish” the low price, it increased the opportunity for an emotional attachment to occur and an offer to commensurate.

The argument for range pricing is the subjective value element of residential real estate. What is a ”big” backyard? And is it a headache or blessing for it’s owners. The most common requirment for buyers over the past 24+ months has been: What are the “comps” and is it less than what someone else paid.

With the current shortage of property in the under $800,000 market, today’s buyers are not always finding what they want in their initially conservative price range. Homeowners have the opportunity to push conservative buyers to come physically view a home that they may have disregarded.

And fall in love and write an offer.

Fewer Homes, Higher Prices

Tyson Lund — Wed, 09 Dec 2009 13:30:09 +0000

Follow the rabbit hole of real estate down and you’ll find this year’s winter real estate market has turned upside down. The traditional winter real estate market is characterized by a slowdown in real estate. Sales drop by as much as 30%. Time to sell a property increases by as much as 20%. The winter quarter of the year is often a ‘Buyer’s Market’, as motivated homeowners will reduce their price to make a deal. But this year’s winter market is different. Instead of the often 12+ months of available homes, a scant 2.3 months remain under $1M. This leaves homebuyers to quarrelling over the few remaining homes. Prices are increasing. And homeowners are negotiating hard and getting almost full asking price. In the first part of 2009, the average single family home in Carlsbad was $676,516 at 96% of asking price. The same home today averages $710,000 and is selling for 99% of asking price. Time to sell in the current market is 60 days.

Condo prices are also up roughly 6% from the start of the year. The average Carlsbad condo is a 2 bedroom, 2 bath 1,440 sq.ft sells for $376,000. The average condo takes on average 86 days to sell in the current market. The upward trend in pricing may continue in the short-term, as available inventory is tight and mortgage rates remain in the low 5% range for a 30 year fixed mortgage. But as prices move higher, investor’s yields are pushed lower. And as the expected yield drops below 6%, the risk and headache of property management will push many investors out of the market. A change in the current mortgage rates will put a strain on demand for condos. A $370,000 condo with a mortgage at a current rate of 5.3% has roughly the same monthly payments as a $300,000 condo at 6.5% (the average 30 year fixed rate in 2008).

Scarcity of available real estate is the primary cause of the current market conditions. And new foreclosure property, which could help satiate buyer demand, has been delayed. Venture down to the court steps at 220 W. Broadway in San Diego or 250 E. Main in El Cajon at 10:00am and you can watch representatives of the banks auction off foreclosed property. This is the step before being assigned to an REO agent and put on the MLS. What is surprising are the large number of postponements and cancelled auctions. On a recent November morning, 665 properties were scheduled for auction at in San Diego County, but only 23 made it to the floor for bidding. Many speculate to the reasons behind the postponements, but the results are clear: fewer homes, lower market time and higher prices.

An excerpt from Tyson’s article in the December 2009 issue of The Carlsbad Business Journal.