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Posted by on Oct 17, 2017 in Jim's Take on the Market, North County Coastal, Sales and Price Check | 3 comments | Print Print

Gap Between Median List and Sale Prices

Reader hema-mendo wondered about the mega-gap between the NSDCC median list price, and median sales price for the last 30 days:

I don’t get it. Why is the spread so wide?

It is a bit alarming to see more than a million-dollar gap between the two:

NSDCC median list price: $2,300,000

NSDCC median sales price, last 30 days: $1,245,300

Half of the current listings – and 83% of the sales – are under $2,300,000!  None of the supply-and-demand economics seem to apply to the high-end sellers and their agents – they are happy to sit and wait……for something.

Most probably think it just takes time before the right young couple with 2.2 kids comes along some day.  But the numbers are daunting.

A median list price means we have 402 houses listed over $2,300,000, and there were 41 sales of the same over the last 30 days – let’s call it a 10-month supply.  But it’s been this way for years, and no one seems to mind.

This is what happens when virtually everyone on the market is an elective seller, and is loaded with equity.  Once a house hits the open market, the ego takes over because now the sellers’ family and friends know the price.  Unless the reason for selling is one of the Big Three (death, divorce, or job transfer), the seller’s ego insists on defending that price, even though nobody has looked at their home for weeks or months.

Waiting is much easier on the ego than having to dump on price.

3 Comments

  1. It is clear the message is out…the bottom line NSDCC entry level houses are getting bought up. I recently told my friend in early June to call you, he wanted a house SFR not attached and there were 3/4 in Encinitas the area he wants to live, I told him that he was gonna get priced out..at the time it was 730…now its more like 790…even 800. What is happening is that bottom end entry level houses in Cardiff, Encinitas, Carlsbad are getting taken out by smart buyers, that is why the median actual sales price is so low, compared to the list price. Looking at the future, these are the areas that are gonna get very expensive…SF like first, and while interest rates are historically low…it is a no brainer, even with a price drop the interest rate will be higher when and if that occurs. I believe the high demand areas will stagnate and not drop on these doomsday predictions.

    I have to disagree on the attitude/ ego being bigger on high end sellers…if you are living in a 2.3 million dollar house on the coast..why be in a rush to sell..your lifestyle is is terrific. That is why the high end stuff, while fairly price negotiable, stays on…where do you go..or get any better…its the quality of life style that makes that kind of seller a different breed.

    What we are witnessing is for most people, the last great chance to get in the coast and lock for 15 or 30 years cheap money at a fixed rate…knowing like everybody that inflation is real and a heck of lot more in existence that the government is saying there is. Just look at your buying power from 2015 to today 2017..that is true inflation …just like the new tax on transactions in real estate, and the new permit fees and government fees, and building materials and labor….My advice, pick the best area, come the cheapest( you can always fix up the place) and nail the money down on a fixed rate loan.

  2. Last July, Bitcoin was worth $2,500.

    Now it’s around $5,700.

    How come? One reason might be Goldman Sachs is throwing in to legitimize the currency. You can now buy a house with bitcoin. How’s that for doubling your fun? That is, imagine if you’d sold your house in July, and were allowed to accept bitcoin. What would your state of mind be today? That’s enough money to keep some people from not divorcing! Yep. Goldman Sachs noticed that too. As usual, they aim to keep families together.

    The market’s changing faster than charts can take the changes into account.

    Conclusion: Just count California butts. They all need a place to put their stuff. Estimate how long the government will take to accommodate them. Price accordingly.

  3. I have to disagree on the attitude/ ego being bigger on high end sellers

    I don’t think the ego is bigger on high end sellers, it’s just the place where we can see how it works.

    If there were 10x as many listings as sales on the lower-end, we’d see the same thing.

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