This week's Altos Research Report shows the results of the market trends we have been discussing for the last few months. The average list price is back up over $700,000 and the summary of the Market Action Index says that prices will likely continue to rise - provided inventory remains low and sales activity remains strong.
Let's take a look at some data:
- Since the beginning of August, 47 homes (detached and attached combined) have come on the market throughout the 4 Carlsbad zip codes.
- Interestingly, only 4 of those homes have contracts - all are short sales with offers that have been accepted by the seller and submitted to the lender for short sale approval. These homes are listed as Contingent and are technically still available.
- There are currently 500 homes on the market in Carlsbad. This number is the combination of Active and Contingent properties. At the same time, there are 270 homes in escrow (listed as Pending). That is a supply to demand ratio of 2:1, which is a well-balanced market
- We have about 5 1/2 months of inventory available in Carlsbad. This number is calculated by adding the Active, Contingent, and Pending properties (770) and dividing by the number of homes that have closed escrow in the last 30 days (138). This means that if no other homes came on the market for the next 5 1/2 months, all of the existing inventory would be depleted. While that is not going to happen, it does give a good indication on the overall health of the market.
What does all of this mean for you? That depends on whether you are thinking about buying a home in which to live, buying a home as an investment, or selling a home:
- If you are thinking of buying a home in which to live, then taking advantage of low interest rates and low prices will help you get in at an affordable payment level and potentially start enjoying the tax benefits of home ownership.
- If you are thinking of buying a home as an investment, the numbers have never made more sense. The current rental market is very strong and rents have been solid (and in some areas rising), so investors are seeing positive cash flows.
- If you are thinking of selling your home, consider the costs versus benefits of selling now versus waiting. It is very unlikely that we will ever go back to the days of loose credit guidelines; prices won't be jumping up anytime soon. They will likely stay level or increase 1-2% for the foreseeable future. What are you gaining by selling now (moving to be closer to family, taking that job offer you always were hoping for) versus waiting and hoping to make a little more money (possibly)? Those are the questions you need to ask yourself to decide what is best for you.
Please call if you have any questions about this data, the market, or anything else regarding real estate - in Carlsbad or anywhere in Southern California. As always, I am happy to help!