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

Rancho Santa Fe Real Estate: January – September 2013 Performance Summary

By linda sansone on Sunday, October 20, 2013 1:53 AM
Rancho Santa Fe real estate (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) continues to improve quarter-by-quarter. Last year, 69 properties sold in the third quarter. This year, 84 properties sold. Quarter-by-quarter, 2013 continues to exceed 2012.

Stepping back, comparing the first nine months of 2013 with those of 2012, sales are up 21.2%. While overall inventory and median sold price remain relatively unchanged, properties did sell faster and closer to original list price. Average marketing time declined from 9 months to 6 months and the median discount from original list price declined from 16.25% to 9.05%. Not only did more sellers sell their homes, but they sold them faster and got closer to their asking price, than sellers in 2012.
However, this overall steady march of stability masks some of the triumphs and struggles of the submarkets that comprise it. Most of the continuous strength of the overall market has come from its lower-priced submarkets. As we will see below, this skew causes Rancho Santa Fe’s overall market performance to under-state its strengths and opportunities.

Original Listing Price: less than $3 million

This submarket continues to thrive by having the largest median sold price appreciation of any submarket in Rancho Santa Fe. For all properties sold in Rancho Santa Fe during the first nine months of 2012 with an original listing price less than $3 million, the median sold price was $1,625,000 versus $1,777,500 for that same period in 2013. Most of this 9.4% property value appreciation came from both a lower supply and a higher demand. The average daily inventory for January through September was down from 128 properties in 2012 to 118 properties in 2013. Of all the submarkets in Rancho Santa Fe, this 7.7% decline was the largest year-over-over inventory change than any other submarket. Inventory for this submarket has been on the decline for the last 3 years. Since the beginning of 2012, supply has been bouncing between 110-130 properties, slowly and steadily creating what appears to be a resistance floor at 110. This stability, along with a slowly recovering macro-economy, has attracted an inordinate number of motivated buyers in 2013 that have increased the number of sales by 25.6%. Not only did 172 properties sell in 2013, during this nine month period, versus 134 for the same 2012 period, buy they sold 35% faster and much closer to their original list price.

Original Listing Price: $3 million - $5 million

Much of the dynamics of this submarket has paralleled the submarket below it. When the Rancho Santa Fe real estate market started to recover, very little of that recovery could be seen in properties originally listed above $3 million. Slowly, that improvement started to creep into this $3 million - $5 million, higher-priced submarket. One could watch the improvement percolate up, until the performance of this submarket was generally indiscernible from the one below it. Currently, in most respects, there is little directional differentiation between the performances of these two submarkets. When comparing the first nine months of 2012 to 2013, the number of properties sold increased 36.6% for properties with an original listing price between $3 million - $5 million. This was higher than any other submarket in Rancho Santa Fe. Median price also increased 5.3%, going from $3,000,000 to $3,158,800. Just like the submarket below it, these properties also sold 13.6% faster and much closer to their original asking price.

Original Listing Price: $5 million or more

Of all the submarkets in Rancho Santa Fe, this was the only one to have fewer sales in 2013, than the same first nine months of 2012. Sales dramatically declined 47.8%. 23 sales in 2012. 12 in 2013. Fortuitously, median sold price only modestly declined by 1.0% from $5,000,000 to $4,950,000 (but given that only 12 properties sold in 2013, I would not give that much meaning). Despite the fall in demand, average marketing time decreased from 637 days to 453 days and the median discount from original listing price to sold decreased from 30.42% to 18.16%. This suggests lower absolute demand but stronger, individual, relative demand. Of course, this is not a submarket that everyone can afford; however, clearly there are some buyers eager to take advantage of the weakness of this submarket. While the submarkets below it may be confronted with fair value issues as their markets heat up, this market appears to be offering potential buyers values that may not be seen in a long time.

linda sansone

Blog for the statistical report for the year 2013