The intensity of the frenzy is determined by inventory – which grew this week, signaling some slow down in the market:
The UNDER-$1,200,000 Market:
Date | NSDCC Active Listings | Avg. LP/sf | DOM | Avg SF |
April 29 | ||||
May 5 | ||||
May 9 | ||||
May 18 |
The OVER-$1,200,000 Market:
Date | NSDCC Active Listings | Avg. LP/sf | DOM | Avg SF |
April 29 | ||||
May 5 | ||||
May 9 | ||||
May 18 |
You can feel it on the street, but a slight slow down only means fewer offers in the bidding wars. We would need a few weeks of reversal before the momentum takes a hit.
do you think more sellers will come out of the woodwork as prices go higher?
I got a couple flyers on the door this week from realtors I have never heard of before. Seems like the marketing is picking up steam.
Avgjoe, sellers in NSDCC dont really have a NEED to sell. There is no real motivation except for Higher Prices. From Sellers perspective, where else they can buy-and-move-to, in Coastal Southern Califorinia after selling their current home in NSDCC? Everything else in LA and Orange County Coastal Areas is much more expensive than NSDCC.
If sellers dont get their asking price, they are happily renting. Only way to revert the trend is perhaps a big decrease in Rents across all coastal areas. What are the chances of that happening in current inflationary environment?
Even if everything is NORMAL and there is NO FRENZY, it does not make sense for a rational buyer to burn around 45K on SFH rent every year to just sit and wait.
With a conservative annual appreciation rate of 5%, on a One Million Dollar Coastal Property, annual cost of waiting is around $100,000 ($45k Rent + $50k Appreciation on desired property).
Rationally speaking, it does not make sense to wait beyond a reasonable search period, just in hope that pricing trend would revert in short term.