The current chaos combined with the decline of the buyer-agent is causing buyers to stay on the couch – unless they see a compelling deal online. With high rates and prices, you can’t blame them for being very picky!
Yet there are still lucky sales happening. Ones that you wouldn’t think had any chance of selling but they end up closing over list anyway with a buyer-agent who has only closed 1-2 sales in the last 12 months. It is a very treacherous environment!
Natalie wrote the thoughts above in our most recent newsletter, and others remarked how true it was in their experience too.
She carries the load around the house too. It became obvious this weekend that I’ve never operated the vacuum cleaner before.
You are a phenomenal woman, and I’m honored to be your husband – and glad you are spending your life with me! Happy Birthday Donna!
Here’s another example of how sellers are making decisions these days.
It was time for our clients to sell the family homestead. Bless her heart, their Mom lived a happy life there through to the end, just like many around Olde Carlsbad. What a great place to spend the last 60 years of your life!
Like many, the house really hasn’t been touched – it’s all original. How much do you spend to prepare it for sale….if any? There is a decent ocean view…through the power lines. The lot is large enough to split and you can add the ADUs….and be into it for another $1,000,000 to $2,000,000? I sold the house three doors to the north and you can see that they’ve added the ADU. But they paid under $500,000 in 1999 – and when you buy right you don’t mind spending the money.
4030 Sunnyhill Dr., Carlsbad 92008
3 br/2 ba, 1,994sf
YB: 1960
Lot size: 26,100sf (0.60-acre lot)
SP: $2,000,000
As we were getting ready to go on the open market, the sellers were approached by a family friend. My list price was going to be $2,200,000 at the end of April, which is about the time that the chaos and uncertainty was really starting to affect the market.
Do you gamble and go on the open market? None of these 1/2-acre lots have sold for a long time, and we speculated that there is some pent-up demand, but at what price? This is a pure fixer which turns off most buyers, but could the builders/flippers be interested? At what price?
Our clients took the sure thing.
I had dreams of the open-house extravaganza of the year, and maybe of the decade, but it was the right move – the uncertainty was too high. I had my hands full with two appraisals, but they came in at value, and we closed as agreed.
San Diego ranks #34 – you could be happier!
For those potential sellers who are already writing off 2025 and plan to sell in the new year instead, note how the selling season has been starting sooner than ever. Peak pricing last year in Coastal North was in February, and this year it was January (scroll over):
The buyers’ enthusiasm tapers off after March:
If you do everything right, you should sell in the first 2-3 weeks:
Think the additional inventory this year was bad? There will be truckloads next year! Beat the rush and get out early – or just sell now!
The takeaways from the graph above will be different for different people.
Not suggested:
Why is it important to Get Good Help?
The failure rate will be higher this year.
In normal markets, we’ve had a success rate of 60% to 65% of the listings closing escrow successfully. During the frenzy, it was as high as 80%! But look at what we’re faced with now.
NSDCC Total Sales/Total Listings
2024: 1,837/2,831 = 65%
2025: 716/1,549 = 46%
Obviously, this year is incomplete but I did include all of the current pendings to approximate this year’s conditions. It’s unlikely that the success rate will be improving through the second half of 2025.
It’s likely that MOST of the sellers this year will be unsuccessful.
What’s for sure? There will be a load of listings in 2026.
Mom and Dad with sister Kathy
Mom smoked half her life and made it to 90! Pall Mall non-filters for many of those!
This one’s for her:
Almost one-third of last month’s buyers paid over the list price…..for the fourth month in a row! Either sellers are being smart about pricing attractively, or a fair amount of the buyers and buyer-agents haven’t gotten the memo about the tougher market conditions.
Sales and pricing are holding up too.
The median sales price is almost identical to last May, and sales were higher:
Our head cheerleader is back at it.
He is predicting that sales and pricing will increase this year, which is optimistic:
Here are the local YoY comparisons:
It’s been a miracle that sales and pricing this year have kept up with the 2024 numbers. Any Fed rate cuts are going to come too late (September/October) to save the real estate market this year, but hopefully they will provide some juice for the early-2026 market.
I think a pattern is developing.
The first quarter of 2024 and 2025 were hot, then we muddle through the rest of the year. The same will probably happen next year too, where the surge of inventory bogs down the market by the second quarter. There aren’t enough buyers for every listing!
There isn’t anything that price won’t fix, and something has to give.
Either sales or pricing will need to be sacrificed. Or both
Yunnie is like Cramer where if you just do the opposite, the results are better.
I’ll guess that our local sales will finish this year at -6%, and pricing at -3% YoY.
Last week I thought inventory might have peaked for the year?
The dip from the previous week was all from high-end listings, some of which are now being refreshed and coming back on as new listings. Even though the lower-end inventory is rising steadily, at least the actives-to-pendings ratios show where the action is:
Under-$3M: 236 actives/82 pendings = 2.88
Over-$3M: 333 actives/54 pendings = 6.17
The quartiles are at their lowest points of 2025, yet it may not be enough:
Are there reasons for hope? The stock market has regained its losses from Liberation Day (which is huge), rates aren’t going up, and there are plenty of choices for home buyers who have guts. But you need to dig out the deals – they won’t be obvious.
