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Snapshot Of Coastal San Diego’s Luxury Real Estate Markets | Rancho Santa Fe, Del Mar, Coronado, and La Jolla.

While there has been a surge in recent luxury home sales, we have noticed some trends that have become apparent in today’s market, effecting both pricing and sales. Rather than provide puffery, let’s look at some concrete data from the current marketplace provided by Altos Research LLC. Surprisingly, the results have been better than expected; however we need to keep a close eye in the coming months for a more grounded and substantive sample.

For Sellers: The coming months are going to be the best opportunity to sell with low interest rates and the seasonally active marketplace.  Unfortunately, there are many more luxury homes for sale than qualified buyers, which will leave much inventory unsold or stagnant. In looking at pending homes sold in Rancho Santa Fe, Del Mar, Coronado, and La Jolla, most have been priced very aggressively or have had a substantial price reduction prior to the pending date due to softness in the luxury market. Selling an estate in this current market takes aggressive pricing, superior marketing, and a value substantive presentation. This is what buyers are looking for and they are definitely out there to be had. First and foremost, inventory is on the climb throughout San Diego. All markets have shown an uptrend in inventory with data going back to 2007.

Median Asking Prices: Rancho Santa Fe has shown the largest downward trend in median asking price, while the other markets have shown to be a bit more stable. Upon analyzing the recent sales in Rancho Santa Fe it has become apparent many low-priced bank owned or distressed sales have created softness in this upper-tier market.

The Good News: The average days on the market is actually trending downward, showing a surge in demand, however the average amount of days on the market remains slightly above 200 days, a trend indicating active buyers are being selective and cautious.

The Indicators: A good snapshot is how many listing prices are being reduced.  This would signify a weakness in the market with Sellers pricing downward in hopes of a quicker sales. There has been a downward trend in listing price reductions however.

The market active index is still very much a “Buyer’s Market”, all registering below a scale of 15.

For Those Looking To Sell: June, July, and August will be the best opportunity for Sellers as the market cools towards the end of the year and interest rates are likely to increase.  It’s going to be a long crawl back to a more normalized market and REO (Bank Owned) sales will continue to be the benchmark for market value.

Anderson+Boatcher, a strategic partnership under Willis Allen Real Estate, specializes in the Coastal San Diego luxury real estate market. To stay up to date on the Coastal San Diego luxury real estate market and to view the most comprehensive source of real estate opportunities, visit www.anderson-boatcher.com

The community of Coronado is located on the central coast of San Diego County. This 13.5 square mile peninsula is accessible via the famous Coronado Bay Bridge, by water ferry from Downtown San Diego, or through Imperial Beach via highway 75.

The real estate and homes for sale in Coronado are some of the most expensive properties in San Diego County. The number of homes sold in a particular year is relatively low. For example, during the period from January through July 2006, approximately 64 single-family homes sold. Approximately 79 homes sold for the same period in 2005. The price of homes in Coronado varies widely from moderately priced small cottages to multi-million dollar estates.

One method to analyze pricing trends for a particular community is to evaluate the median and average price of homes for a particular month, and compare that data against the same period last year. What follows is a comparison of the median price and average price of homes for the past seven months (January through July 2006), compared against the data for the corresponding time period in 2005.

The median price of homes represents the point at which half the homes are above a particular price point, and half the homes are below a particular price point. The average price of homes is calculated by adding up the sales price of all homes sold in a particular month, and dividing that value by the number of homes sold.

The median price of homes in July 2006 was $1,505,000, compared to $1,481,250 in July 2005, which represents a 1.6% increase. The average price of homes in July 2006 was $1,795,179, compared to $1,603,214 in July 2005, which represents an 11.5% drop. Approximately 7 homes sold in July 2006 and 14 in July 2005. In summary, the data was mixed for July 2006, with the median price posting a small increase and the average price dropping 11.5%.

The median price of homes in June 2006 was $1,775,000, compared to $1,570,000 in June 2005, which represents a 13.1% increase. The average price of homes in June 2006 was $1,998,860, compared to $1,778,214 in June 2005, which represents a 12.4% increase. Approximately 15 homes sold in June 2006 and 21 in June 2005. In summary, the data provides evidence that there was an upward price trend in June 2006 compared to the same period last year.

The median price of homes in May 2006 was $1,200,000, compared to $1,390,000 in May 2005, which represents a 13.7% drop. The average price of homes in May 2006 was $1,576,429, compared to $1,615,692 in May 2005, which represents a 2.4% drop. Approximately 7 homes sold in May 2006 and 13 in May 2005. In summary, the data provides evidence that there was a downward price trend in May 2006 compared to the same period last year.

The median price of homes in April 2006 was $2,250,000, compared to $1,450,000 in April 2005, which represents a 55.2% increase. The average price of homes in April 2006 was $2,667,200, compared to $1,731,524 in April 2005, which represents a 54% increase. Approximately 10 homes sold in April 2006 and 7 in April 2005. In summary, the data provides evidence that there was a significant upward price trend in April 2006 compared to the same period last year.

The median price of homes in March 2006 was $1,650,000, compared to $1,780,000 in March 2005, which represents a 7.3% drop. The average price of homes in March 2006 was $2,219,667, compared to $1,774,667 in March 2005, which represents a 25.1% increase. Approximately 15 homes sold in March 2006 and 9 in March 2005. In summary, the data was mixed for March 2006, with a drop in median price and an increase in average price.

The median price of homes in February 2006 was $1,185,000, compared to $875,000 in February 2005, which represents a 35.4% increase. The average price of homes in February 2006 was $1,327,000, compared to $1,011,667 in February 2005, which represents a 31.2% increase. Approximately 5 homes sold in February 2006 and 3 in February 2005. In summary, the data provides evidence that there was an upward price trend in February 2006 compared to the same period last year.

The median price of homes was $1,700,000 in January 2006, compared to $1,531,500 in January 2005, which represents an 11% increase. The average price of homes in January 2006 was $1,599,000, compared to $1,717,750 in January 2005, which represents a 6.9% drop. Approximately 5 homes sold in January 2006 and 12 in January 2005. In summary, the data was mixed for January 2006, with a jump in median price and a decline in average price.

So what does the above data tell us? Overall, there was a 19% decline in the number of homes sold during this period from 2006 to 2005. Besides that, the Coronado real estate market is very hard to characterize because of the limited number of homes that sell every month, and the wide variation in home prices. The median and average prices fluctuated substantially depending on whether or not very expensive homes sold that month or not. Prospective home buyers should seek the advise of an experienced real estate agent to help them understand the micro pricing trends of homes in their price range.