More on the market conditions being observed around the country:
JtR: I don’t see many buyer-agents showing properties at all. Open-house traffic is spotty at best and mostly lookers with casual interest. Homes are still selling but sales will likely slow the rest of the year, starting now. The NSDCC sales for June will be 10% to 15% fewer than last June.
There was a 17% increase in pendings this week, which is in line with last year when the last week of June was the high point for pendings in 2024. This week should be fruitful too.
Here are new pendings this week to help demonstrate the price-reductions-to-days-on-market relationship:
The NSDCC pricing is at its lowest point of the year with the median list price under $3,600,000 for the first time in 2025. With improving rates over the last week, it was just enough to spark some additional activity:
NSDCC List Price Quartiles
| Week | |||
| Jan 6 | |||
| Jan 13 | |||
| Jan 20 | |||
| Jan 27 | |||
| Feb 3 | |||
| Feb 10 | |||
| Feb 17 | |||
| Feb 24 | |||
| Mar 3 | |||
| Mar 10 | |||
| Mar 17 | |||
| Mar 24 | |||
| Mar 31 | |||
| Apr 7 | |||
| Apr 14 | |||
| Apr 21 | |||
| Apr 28 | |||
| May 5 | |||
| May 12 | |||
| May 19 | |||
| May 26 | |||
| Jun 2 | |||
| Jun 9 | |||
| Jun 16 | |||
| Jun 23 | |||
| Jun 30 |
And these are the quartile prices of the unsolds!
The somewhat-stagnant marketplace should get interesting in the second half of the year. Buyers will sense an opportunity to make aggressive offers, and they might waive all contingencies to help offset their lower price.
Can they still cancel the deal later?
Q. If a buyer removes all contingencies at the onset of a transaction, of course frowned upon, and we ask them to sign the acting against the advice of broker letter; does the buyer still have five days to cancel if they don’t like the disclosures?
A. The answer would depend on whether or not the statutory disclosures were provided to the buyer in advance of the contract being formed. Contingencies and disclosures are two different things. One does not necessarily relate to the other.
If a buyer elects to take the risk of entering into a transaction “contingent free” and against our advice, but has not yet received the statutory disclosures, the 5-day right of rescission (if delivered by mail or email – 3 days if delivered in person) would apply.
In that case, the buyer would indeed have time after receipt to terminate the agreement, even if the offer was contingent free.
Think of it this way: (i) contingencies are contractual rights and/or obligations (ii) statutory disclosures are those that allow for an unfettered right to rescind (meaning unwind) the agreement within the requisite time period.
On the other hand, if the listing agent provided the statutorily prescribed disclosure documents in advance of the offer being formed; the right of rescission would not apply because the buyer would have already received the completed documents. If the statutory disclosures are amended after the contract is formed, the right to rescind is reinstated.
Whenever a buyer is contemplating submitting a non-contingent offer; provide and review the C.A.R. Non-Contingent Offer Advisory (“NCOA”) with the Buyer no later than the time the offer is signed.
16,000sf on 7.4 acres!
These ivory-tower guys have explored the topic of rising inventory and it’s relationship with declining home prices – and backed up their conclusions with math that every rocket scientist should love!
https://home-economics.us/when-should-we-worry-about-rising-inventory/
Their summary in layman’s terms:
We answer two questions:
Our conclusions, in brief:
We estimate the inventory threshold at 5.0 months. Below that level, inventory has only a weak relationship with year-over-year home price changes. But above it, the relationship becomes more clearly negative, signaling price declines 9 months in the future.
Importantly, this is not a vague association. The fit is unusually strong: our best-performing model—a 9-month lag with a 5.0-month threshold—yields an adjusted R² of 0.75, indicating that it explains a substantial share of the variation in home price growth.
Based on the model coefficients, we calculate that the predicted change in home prices turns negative at 5.81 months of inventory.
In other words, once inventory rises above 5.0 months, prices tend to soften. If inventory climbs above 5.81, the model implies that year-over-year price declines are likely to follow—with a lead time of about 9 months.
The months of inventory is measured by dividing the current inventory by last month’s sales. For the NSDCC, it means 608/188 = 3.23 months of inventory.
But the NSDCC sales in June are lagging way behind. There have only been 111 closings this month and Monday is the last day. If it gets up to 125-130 sales, then the 608/130 = 4.7 months of inventory!
Let’s break it down to the individual zip codes:
The areas under 2.0 should be fine, at least for now.
But I’ll add that the impatience of sellers who failed to sell this year will be intensifying in 2026. The researchers’ 9-month-window-before-price-declines could be shorter once longtime sellers see a flood of inventory in the new year.
The importance of hiring an experienced agent during tough times can’t be overstated. Every agent can handle the easy deals in the absence of chaos and uncertainty. But the deals are going down harder than ever now.
Buyers are gaining more control of the market every day, so the agent’s ability to understand that and advise their clients properly is critical. The evidence of how well an agent is navigating these turbulent times is their number of sales – can they get people to the finish line? Check their number of closed sales at Zillow.
Get Good Help!
https://www.mikedp.com/articles/2025/5/12/the-top-20-of-agents-do-65-of-transactions
P.S. We’ve closed 20 sales this year. Hopefully we’ll get to 26.3 by December!
The San Diego metro area is considered ‘Warm’ by realtor.com, but only because of the fantastic start we had this year. Our ranking among other metros is plummeting:
Jan: #65
Feb: #72
Mar: #96
Apr: #132
My green arrow above points out how if it weren’t for the hot action in January and February, we would have been on a steady slide.
It looks obvious by now, doesn’t it?
We’re going to muddle through the rest of 2025 and then have a nice pop to start next year. Probably not more than two months of 2026 hotness though, and then back to the muddling as inventory grows faster and higher than it did this year.
These are as good as anything else at the beach! Plus a peek at a $3.2M in La Costa Oaks.
Mick Ralphs, lead guitarist for Mott the Hoople and Bad Company, passed away this week. He’s on Paul’s left here. I agree with one of the readers – Bad Company deserves to be in the Rock and Roll Hall of Fame:
It looks like the Compass vs. Zillow lawsuit could change the world.
A long-time broker/attorney filed his response here, and he thinks Compass has a strong case – and Robert Reffkin added his thoughts in the comment section:
https://notoriousrob.substack.com/p/guest-compasss-antitrust-gamble-could
The author thinks it’s likely that Zillow settles the case, and ends their ban of listings that don’t comply with their rules. But more importantly, he thinks it will open up the home search to others:
If Zillow settles, it means there will be more private marketing of homes. It’s acceptable to keep listings in-house, and we’re going to be forced to deal with it. The public will be on the outside looking in, and because the market conditions are already tough, agents might resort to actions we haven’t imagined yet.
P.S. I checked – Compass Private Exclusives make up 0.8% of the total NSDCC sales this year (7 out of 884). We have just scratched the surface of the private marketing of homes!
