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Rancho Santa Fe Real Estate: 2012 January-April Performance Summary

Rancho Santa Fe Real Estate: 2011 Annual Performance

By linda sansone on Sunday, April 01, 2012 2:21 PM
Overall, real estate in Rancho Santa Fe (defined for the purpose of this analysis as all attached and detached residential properties listed with the San Diego Multiple Listing Service for the 92067 and 92091 zip codes) was softer in 2011 than 2010. Sales were down 2.8%, from 215 properties sold in 2010 to 209 in 2011. Despite median price declining 4.3%, average marketing time for properties sold increased by approximately a month, from 232 days to 260 days. Much of the median price decline came from sellers discounting their original list price more than they had in 2010. The median discount rate from original list price in 2010 was 17% versus 20% in 2011. Consequently, in 2011, despite only slightly fewer properties selling than in 2010, they took longer to sell and with greater discounting.

Rancho Santa Fe Real Estate: 2011 Annual Performance

Overall, real estate in Rancho Santa Fe (defined for the purpose of this analysis as all attached and detached residential properties listed with the San Diego Multiple Listing Service for the 92067 and 92091 zip codes) was softer in 2011 than 2010. Sales were down 2.8%, from 215 properties sold in 2010 to 209 in 2011. Despite median price declining 4.3%, average marketing time for properties sold increased by approximately a month, from 232 days to 260 days. Much of the median price decline came from sellers discounting their original list price more than they had in 2010. The median discount rate from original list price in 2010 was 17% versus 20% in 2011. Consequently, in 2011, despite only slightly fewer properties selling than in 2010, they took longer to sell and with greater discounting. None of this was lost on sellers. Deterred by the longer marketing times and pricing weakness, more sellers either left the market or failed to enter it. This resulted in a 13% inventory decline. Average daily inventory in 2010 was 340 properties compared to 295 properties in 2011. Interestingly, this inventory decline has been significantly accelerating, helping to create pricing support for existing inventory.

Original Listing Price: less than $3 million

This is the only sub-market in Rancho Santa Fe to have more sales in 2011 than 2010. Sales increased 5.1%, from 138 properties sold in 2010 to 145 properties in 2011. While every sub-market’s median price declined between 2010 and 2011, this sub-market declined the least, 1.2%. With sales remaining strong and valuation essentially stable, sellers attempted to price their properties higher in 2011. This can be seen by comparing median price discounts for 2010 and 2011. Median price discounts increased from 13.43% in 2010 to 16.86% in 2011. This 3.43% absolute increase (or 25.5% year-over-year relative change) represents a combination of 2.2 % higher original list pricing plus the 1.2% median sales price decline.
Ironically, despite this sub-market selling more properties in 2011, it also incurred the largest percentage increase in average marketing time. Average marketing time increased 23%, from 177 days in 2010 to 218 days in 2011. Nevertheless, going forward, it looks like this sub-market will continue to see increasing price stability due to a significant supply reduction. Compared to 2010, inventory has declined 8.7%, but recently inventory has been declining rapidly. Average daily inventory for 2011 was 155 properties; however, over the last quarter inventory has declined to approximately 100 properties. That is a 41% decline from the average 2010 inventory level of 169 properties.

Original Listing Price: $3 million - $5 million

Usually changes in sales trends tend to correlate with pricing tiers, but that is not the case here. This sub-market had the largest percentage sales decline than any other sub-market. In 2010, this sub-market sold 52 properties, compared to only 41 properties in 2010. That equates to a 21% decline in year-over-year demand. For those properties that sold, average marketing times increased 17% or nearly 2 months, from 299 days in 2010 to slightly less than a year in 2011.
Fortunately, median price only declined modestly by 2.5%. This price stability came mostly from a 17% decline in inventory. The average daily inventory level in 2010 was 99 properties compared to 82 properties in 2011. Lately, inventory has declined even further to approximately 65 properties. Most of this decline is coming from a reduction in new listings, rather than cancellation of existing listings. Going forward, while pricing stability is less certain in this sub-market than for the under $3 million group, this sub-market appears to be properly correcting its supply, even under large changes in demand.

Original Listing Price: $5 million or more

This sub-market had the largest median price decline between 2010 and 2011. Median sold price declined from $5,500,000 to $4,400,000, essentially 20%. We have to be careful how much weight to apply to this decline, since median price statistics only make sense when comparing apples to apples.

This sub-market is far from apples-to-apples. There exists great disparity and ranges in this price tier. Nevertheless, given this statistic is composed from annual sales numbers, we can safely infer some price weakness occurred between 2010 and 2011. The number of properties sold declined by 2 properties or 8%, from 25 properties in 2010 to 23 properties in 2011. The median discount off of original list price remained unchanged at 28%. The highest of all sub-markets. Average marketing time declined by 6%, from 393 days in 2010 to 370 days in 2011. This acceleration was probably due to the reduction in original list pricing to account for the median price decline. Not surprisingly, fewer sellers found 2011 an appropriate market and thus declined to list their properties for sale. Specifically, new listings declined 8.5%, from 83 in 2010 to 76 in 2011. This decline, along with some sellers taking their properties off the market, resulted in an 18% year-over-year inventory decline. To date, this sub-market has the highest supply/demand ratio than all other sub-markets. Unlike the other two sub-markets, this sub-market does not seem to be correcting its supply according to demand. Until that happens, this sub-market should continue to experience price volatility.


Copyright ©2011 linda sansone

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linda sansone

Blog for the statistical report for the year 2011