Six-Year Low Inventory Fails to Inflate San Clemente Home Prices

Posted on November 24, 2011 on www.SanClementeRealEstateBlog.com

The Law of Supply and Demand be Damned.

I wrote about San Clemente’s incredible shrinking housing inventory last October 25 when the local homes-for-sale supply dropped to 369 homes.

Since then, the inventory has further plummeted to 303 – as of this writing.

Something different is happening here.

This is not just a seasonal phenomenon. Sure, people sometimes pull their homes off the market for the holidays, but not to this extent. Inventory hasn’t been this low in almost six years.

Everyone knows the basic law of Supply and Demand. Make something more scarce and the price goes up.

So why are prices still flat or down a bit from last year? Sales volume (demand) is normal. Could it be that prices are not rising because the type of buyer has changed? Normal emotional folks looking for homes could drive up prices, but they are finding it difficult to qualify for home loans these days. But investors with cash seem to be having no problem snapping up properties at low prices (at least anecdotally.) If this phenomenon were true, prices might not rise in a “cash is king” environment, even with a lower supply.

Here’s a quick snapshot of the San Clemente residential real estate market on Thanksgiving Day, 2011:

• The median list price is $729,900.
• 73 percent of the inventory are “standard sales.”
• 27 percent of the inventory are “distressed” (either “bank owned” or “short sales” listed for less than owed.)
• 72 percent are single family homes.
• 28 percent are condominiums.
• 55 percent are in zip code 92672.
• 47 percent have an ocean view.
• 38 percent have no air conditioning.
• 61 percent of the homes have 2 stories.
• 19 percent have more than 4 bedrooms.
• 30 percent have more than 3 bathrooms.
• 31 percent have more than 3,000 square feet interiors. 

To better illustrate the scarcity of the current inventory, take the following San Clemente real estate quiz:

How many single family homes are for sale (standard sale) with an ocean view, on the ocean side of the freeway, for under $799,000?

Answer: One: 1311 Avenida De La Estrella, listed for $639,000 by Mike Cotter of Century 21 OMA (me.)

How many single family homes are for sale (standard sale) in Talega with 5+ bedrooms and 4+ baths under $1,225,000?

Answer: One: 15 Corte El Brazo. Listed for $875,000 by Mike Cotter of Century 21 OMA (me.)

How many condos are for sale (standard sale) with 3+ bedrooms and an ocean view under $529,000?

Answer: Two:

• 38 Vista Encanta 38. Listed for $399,999 by Janet Montandon of Star Real Estate South County.
• 764 Via Otono. Listed for between $399,000 and $425,000 by Carlos Hernandez of Rosalinda Hernandez Broker.

Finally, how many condos are for sale (standard sale) with a ground floor master bedroom in all of San Clemente?

Answer: Only three:

• 3830 Avenida Del Presidente 25. Listed for $169,999 by Ledeen Hangen and Sylvia Tarkeshian of Tarbell, Realtors San Clemente.
• 2501 S El Camino Real 206. Listed for $279,999 by Ledeen Hangen and Sylvia Tarkeshian of Tarbell, Realtors San Clemente.
• 257 Avenida Lobeiro G. Listed for $1,859,000 by Karen Conley of Keller Williams OCC Realty.

For more on the San Clemente housing market, check out MCotter.com, especially latest market statistics and neighborhood stats.