In the never-ending attempt to make sense of the market using data, it is interesting to note today that in two out of three price categories, the current pendings are priced higher than the actives.
||NSDCC Active Listings
|$1M to $1.5M
|$1.5M to $2M
It’s makes me think that the home’s condition is what’s driving sales. People are willing to buy, and even pay a little more for the creampuffs, while the homes with any defects are struggling to sell.
Buyers are looking for any reason not to buy, and stay on the couch. All we need to fix that is a compelling home/price!
The number of pendings went up this week, giving hope that our local real estate market will glide through the off-season.
There are 19% more houses for sale between La Jolla and Carlsbad today than there were a year ago, but it doesn’t feel like it – unless you are in the higher-end market where there are still 523 houses priced over $2,000,000 that are selling slowly (84 pending though!).
For those looking for our jumping-the-shark moment, this might be it.
Inventory is growing, and there is only one reason: More prices are wrong.
But when you sell your best asset down the river and let amateurs run it who are out of touch with reality, you get explanations like this:
The number of homes for sale in the country is starting to flatten, which realtor.com® researchers say is signaling a “crucial inflection point for the inventory crisis.” Inventory has decreased slightly by 0.2 percent from a year ago, but is poised for an increase in the months ahead due to an 8 percent increase in new listings. This marks the largest annual jump since 2013, according to a new report from realtor.com®.
“After years of record-breaking inventory declines, September’s almost-flat inventory signals a big change in the real estate market,” says Danielle Hale, chief economist for realtor.com®. “Would-be buyers who had been waiting for a bigger selection of homes for sale may finally see more listings materialize. But don’t expect the level to jump dramatically. Plenty of buyers in the market are scooping up homes as soon as they’re listed, which will keep national increases relatively small for the time being.”
She gives the impression that more homes for sale will be satisfied by pent-up demand – that we shouldn’t “expect the level to jump dramatically”, because the new inventory will get scooped up.
If you ask me, +34% and +24% is dramatic!
Inventory is up because buyers are waiting for a bigger selection of affordable and better-priced homes for sale. Any time the inventory grows, it is due to overly-optimistic pricing.
Here we are – Happy 4Q18!
Predictably, the inventory is starting to subside, and hopefully just leaving the motivated sellers. The number of houses in escrow is a good gauge, and they have been steady over the last five weeks (312, 302, 305, 296, and 302).
The September sales are going to be less than last year though.
We had 259 NSDCC sales in September, 2017, and 264 in 2016. We’ve had 192 sales marked closed last month – but it’s early. It should get up to 220 or more.
We are mellowing down easy – the new pendings averaged 50 per week in September (they were 55 per week last year, and 66 per week in 2016). The total number of pendings slipped under 300 for the first time since mid-February, and are now at 296.
The Case-Shiller Index is tomorrow, and October starts a week from today!
Our local market is still kicking – the number of pendings went up this week (+1%), and we had more new listings than we’ve had in a month (91).
But it’s a market for the affluent – literally 55% of the houses for sale between La Jolla and Carlsbad are listed for more than $2,000,000!
The NSDCC Pendings by price range vs last week:
||# of Pendings Last Week
||# of Pendings This Week
|$1.0M to $1.5M
|$1.5M to $2.0M
Wow, the Over-$2.0M market is on fire!
The total number of pendings is down to where they were in February, so the off-season has begun. What can we expect the rest of the year?
NSDCC detached-home sales compared to 2017:
|Third of Year
||# of 2017 Sales
||# of 2018 Sales
||YoY % change
This year’s selling season was plagued with wildly over-priced listings, so no surprise that the number of sales dropped off year-over-year.
I think we’ll see a rebound of sorts, and sales in the last third of 2018 only be about 5% less than in 2017. Anyone trying to sell during the off-season should be more motivated, and as a result, be priced more competitively. We’ll see!
The NSDCC Actives vs. Pendings by price range:
||2 to 1
|$1.0M to $1.5M
||2 to 1
|$1.5M to $2.0M
||3 to 1
||8 to 1
In the past, we’ve considered a ratio of 2:1 to be about normal. Given this market and time of year, these look pretty good, except for the high-end which has always had excess supply. Read More
There are 117 NSDCC houses for sale listed under $1,000,000 today, which is the highest count of the year – even though the average cost-per-sf is near the low of the year ($430/sf). But the rest of the market is holding up, based on the average cost-per-sf of the active listings:
The MLS doesn’t publish the stats for the Above-$2M market for some reason.
In the other three categories, the number of houses for sale are at, or near, their highs for the year, which can be expected for the end of summer. The new-pendings are slowing down, which is normal too for this time of year:
The number of new listings dropped 10% compared to last week, and the total number of pendings dropped 5%. The rest of the year should dwindle down quietly.
Surprisingly, the segment that is struggling the worst is the low-end. The number of NSDCC houses listed under $1,000,000 is near the high for the year, and the average $$/sf is at the low for the year. The number of pendings is similar to January’s count too. We may have run out of people willing to pay so much, for so little.
Hopefully September will bring deal-shoppers around one more time!