Lower Rates Ahead

Trump is urging Powell to lower rates, and the Fed chief is going to cave.

Powell will lower the rates.

I guarantee it.

He’s going to lower his Fed rate by 1/4%, and say, “There you go!”

This is 2025, and we’re in Flat City. There is no help coming.

Homes for sale are priced at yesterday’s comps, plus a little mustard. The few that are attractively priced get lost in the shuffle because the buyers assume EVERY house is over-priced. Yet sellers keep waiting for that nuclear family with 2.2 kids to come along and pay all the money.

They aren’t coming, and there’s no relief in sight.

Unfortunately, these conditions will force most to the sidelines.

Casual buyers will wait for the mythical moment in the future when all the stars will align (that’s not coming either), and sellers will want to wait until “the market gets better” – which ain’t happening anytime soon. But inaction is an easier choice for both of them to digest.

If you want to move this year, then you need to create your own solutions.

Whether you are a buyer or seller (or both), there is one solid compromise that helps both sides:

The mortgage-rate buydown.

Sellers should offer to buy down the rate, rather than lower their price.

Neither the buyer nor the seller should believe that lowering the price will make much difference. In the second line above, the $100,000 price reduction only gave the buyer a $200 per month discount. Big whoop.

Buyers need to make a formal offer to the seller that says,

“If you can save me $500 per month, I’ll buy your house”, or

“If you can save me $1,000 per month, I’ll buy your house”.

If the seller is already offering to buydown the rate, then they already expect to pay out – it’s just a matter of how much.

If they only have to pay $45,000 to make the deal on a $2M sale, then they should strongly consider it. It’s also worth considering the $145,000 discount if needed, unless they think there might be two in the bush.

But this is the critical part:

The seller must offer the buydown up front just to send notice to the buyers that they will consider it. The buyers must make a written offer to see what they might actually get.

Without those two, we’re just loitering.

Zestimate 2025

Homeowners put a lot of faith into their zestimate.

They’ve been receiving their monthly updates for years and years now, and it’s like an old friend.

It’s been so long that they forgot the doubt and mistrust of the zestimates in the beginning, and now figure their old friend wouldn’t let them down. Especially when they check active listings and the zestimates are always within a couple of bucks of the list price.

It doesn’t occur to them that Zillow might be lying to them, and adjusting zestimates to be near the list price once a home goes on the market. Nooooo, instead they want to think that the zestimates must be getting more accurate!

Now the doubt and mistrust shifts to the agent when they deliver the real value. If the broker’s opinion of value is less than their zestimate, it’s the realtor who is wrong….obviously!

In a stable-to-declining market, this is real estate poison, and a main reason why listings will sit forever without selling. The homeowners are convinced that their price is right, mostly because their old friend said so.

Tariffs and Real Estate

The world was rocked by tariff talk on April 2nd.

The number of actives and pendings were already fighting to stay in line with last year, but look at the changes that began in April.

Has the selling season ended prematurely, and it will feel like the off-season for the rest of the year? Looks like it.

I’ve already had people wonder out loud if they should wait until next year. It won’t be better next year.

The market sluggishness will stay like this until there is a meaningful change in rates and/or prices, which could take years. Home sellers will be faced with a choice. Take less now, or take less later.

New Listing – One-Story!

Check out this fine-looking one-story with incredible succulent backyard!

5119 Berryessa Street, Shadowridge

3 br + den / 2 ba, 2,270sf

10,459sf lot

HOA = $92/mo.

LP = $1,299,900

Are you searching for a roomy one-story with 3-car garage on a large private lot? This is it! Our recent tune-up makes it move-in ready too. New carpet & paint, hardwoods, chef’s kitchen, high ceilings, remodeled bathrooms, and a calm ocean breeze every afternoon – wow! The 10,459sf lot is very low maintenance and the backyard is a botanical garden full of specialty succulents – it’s a must see!

Open house 11am – 1pm Sat & Sun April 26th and 27th

Market Share

Encinitas/Cardiff market share, last 12 months

The first Compass goal was to have 20% market share in 20 major metro markets, and now we’re striving to have 30% market share in 30 markets.

Locally, we’re getting close.

The market has been tough on everyone, mostly because buyers aren’t going for it like they were during the covid frenzy. Agents need to be really good now, and that’s why the top brokerages should be picking up additional market share in the coming months.

Compass spent $100,000,000+ on our platform to support agents, and it’s really good. It also makes for a fantastic recruiting tool, and it’s going to be hard for the smaller brokerages to keep up.

But the business of selling homes is an individual sport – and you still need to hire the right agent. Check their track record on Zillow to see how successful they have been recently at getting people to the finish line!

Carlsbad market share, last 12 months

Trendy Tuesday – Earth Day

The six of us at the SD Botanical Garden in Encinitas over Christmas

Daughter Natalie submits today’s Trendy Tuesday, and she’s into it! She has always been the adventurer in the family who goes camping, snowboarding, and surfing regularly with her boyfriend Ryan. Honestly, we’re jealous! We will be floating the Grand Canyon later this year!

Happy Earth Day!

Here are some local ways to celebrate our Mother Earth this week, and beyond!

Creek to Bay Cleanup Day

This Saturday is the 23rd annual event, where volunteers are invited to grab buckets and work gloves and make a difference at 70+ locations throughout the county. See here for more details.

Visit One of Our Local Nature Attractions

Marvel in the beauty of our local environment by visiting one of our many nature attractions:

Go for a Hike! Some great ones:

Or just walk along any of our beautiful beaches!

NSDCC Sales & Pricing YoY

The NSDCC sales and pricing looks a lot like it did last year, which is the definition of Flat City. It gives us some assurance that the market is steady, at least in the rear-view mirror.

But let’s break it down into the individual areas to see if there are any concerns.

In green (above) are the two most homogeneous neighborhoods full of typical tract houses. Their sales and pricing statistics are virtually identical year-over-year, and their median and average $/sf are very close too which means there aren’t many if any outliers. Two areas where sellers would find it easier to get their price right, and where buyers can feel comfortable justifying the pricing.

La Jolla is phenomenal. For a higher-end area to have such solid stats all the way across is very impressive and a place where you can buy with confidence. Rancho Santa Fe is right in there with them but the sales counts are low.

There aren’t any areas that have any big concerns, mostly because the sales counts look healthy and are similar YoY (sales are a sign of what’s ahead for pricing).

If there was a big concern, it’s the uncertainty ahead, and the likelihood that the first quarter of 2025 will end up being the best quarter of the year.

Jim’s 2025 Track Record

There is a lot of hubbub about the ‘market’ being sluggish and I’ve documented how the inventory of unsold homes keeps rising. Especially on the higher-end.

But let’s focus on what has been working, shall we?

Above is the list of our listings that have closed escrow this year.

The similarities:

  • All were staged and looked neutral, bright, and cheery.
  • Six out of seven sold for MORE than their list price.
  • All of them sold within five days on the open market.

You can certainly find a better-looking agent and almost all of them are younger than me now. But I think my 2025 record will stand up with any other realtor around here who delivers personalized one-on-one service and isn’t the big team that has assistants pushing buttons. If you are comparing agents, check their sales history on Zillow. Click here for mine, and check the reviews too.

The market is tough, and it doesn’t take much to miss.

I have three listings that have been active for more than five days. Two decided to do their own staging, and the third is such a specialty product (4,984sf two-story home on a private golf course) that I just need a member to get the bug about living directly on the fairway!

The 90-day pause on tariffs expires on July 8th.

The market hysteria will probably kick up again, so to be safe, let’s sell your home before the middle of June. After July, both buyers and sellers will be packing it up and waiting until 2026!

Pin It on Pinterest