The first chart above shows a 42% increase in median home prices from December 2011 to December 2013. This has bolstered home owners’ confidence when deciding to sell during the last 2 years, which in part has led to higher list prices and sold prices. In December of 2013, there were only 42 detached home sales in all of Del Mar, Solana Beach and Carmel Valley. This month had the lowest amount of sales of any month during the last 2 years. The market is tight and still favoring home sellers.Inventory levels (the amount of homes for sale) have also plummeted during this time. In fact, in December of 2013, there was 3.4 months of inventory, which is on the cusp between a seller’s market (less than 3 months) and a balanced market (3-6 months of inventory). This is down 50% from December 2011 when inventory was at 6.8 months – in a solid buyer’s market (6+ months of inventory).
Is there any good news for home buyers? Some conditions are starting to balance out and favor home buyers. Inventory levels have been rising and prices have been flattening. Interest rates continue to remain low and steady. So, for home buyers who have a solid down payment, good credit score (720+) and a solid job history, there are good opportunities to find a good home and get a good mortgage. The recent market increases peaked around the summer of 2013 and homes now are taking longer to sell, especially if home sellers are still try to push prices beyond what buyers are willing to pay.
The key for anyone looking to buy or sell a home this year is to work with a REALTOR who can break down the numbers and explain what is happening in the segment of the market you are interested in. Don’t guess, and don’t just rely on sites like zillow, trulia or realtor.com. Only a REALTOR can run accurate comparable sales data (a/k/a “comps”) which show averages, model match sales and can put market activity in context.
If you have any questions about the real estate market and what to expect in 2014, contact us for an appointment.
Happy New Year and good luck in your real estate endeavors this year!