Unlike last year, buyers aren’t jumping at every listing – we just saw that the SD inventory is up about 13% compared to last February.
Though every talking head reminds us that rates are still ‘historically low’, nobody is going to buy a house today just to lock in the rate. If anything, buyers are willing to wait-and-see if a further rise in rates might drive prices downward.
It is a more-cautious market, yet sales are streaming in – here’s how the NSDCC sales for January/February compare to previous years:
| Year | |||
| 2006 | |||
| 2012 | |||
| 2013 | |||
| 2014 |
Will this selling season get up to frenzy-speed like last year?
Or just settle in at a more-leisurely pace?
We’ll know in the next 30-45 days. There is a natural lull around April 15th, and momemtum will have to be flowing by then to push a frenzy for another couple of months.
What will it take?
More listings priced reasonably – which sounds far-fetched, on both counts – and buyers willing to pay more than last year.
Here are the new-listings counts, and the LP-per-sf for each area:
Total Number of NSDCC Detached-Homes Listed Between Jan 1 – Feb 28
| Area | |||
| Carlsbad SE | |||
| Carlsbad SW | |||
| Carmel Valley | |||
| Del Mar/Solana | |||
| Encinitas | |||
| La Jolla | |||
| RSF | |||
| Totals |
The numbers are similar enough that they could be considered noise: 3% fewer listings at +7% higher list pricing with 10% fewer sales in the first two months of 2014 (though that will be closer to -5% with late-reporters).
I think buyers will be more picky as time goes on, and the bidding-war firefights will dwindle as sellers keep pushing higher.
A more-leisurely frenzy for the next 1-2 months?
The first phase of the housing market’s recovery in San Diego County seems to have drawn to a close, but a second phase is coming that could breathe new life into the local construction industry and help spur growth throughout the economy, said economist Christopher Thornberg, founding partner of Beacon Economics in Los Angeles.
Although the growth rate of home prices has slowed in recent months, the housing recovery will rebound by the end of the year, Thornberg said Thursday evening at a meeting sponsored by City National Bank.
In an interview earlier in the day, Thornberg said the second phase of the housing rebound will be driven by pent-up demand from homebuyers rather than investors’ speculative purchases, which have fueled much of the recent rise in prices.
Prices won’t grow as fast as they have recently, Thornberg said, but growing demand will lead to more pressure for new homes, meaning more work for builders.
“The real recovery begins when there’s real growth on the construction side,” Thornberg said.
I think you need to have a decent increase in inventory if you want to get an increase in sales. Sure seems like there isn’t much on the market, and what is left is stale and overpriced.
The flow of inventory seemed to have picked up the last 10 days or so but certainly no flood yet – surprising given the higher pricing available.
We are nearing peak and will slow down. The price increases will be because new inventory. Rising rates will retard the increases, but we will be still increasing into 2015.
Depending on the 2016 election there will be a pull back, but not sure how strong. I think for most of 2015 we will go sideways.
Building a foundation of pricing in 2014 would be a good thing. If 2014 goes like 2013 did, then we are setting up for another crash when rates start to go up. If we consolidate and stay level or inch up at a reasonable rate, then over-all confidence will be higher and when rates creep up, it won’t impact sentiment as much. Slow and steady wins the race.