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Jim Klinge
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701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011

Category Archive: ‘Inventory’

Inventory Watch

I mentioned that Lawrence Yun should talk to some realtors because he could do a better job explaining the dynamics about the inventory.

He keeps saying that there is an inventory shortage, but the number of houses for sale between Carlsbad and La Jolla today is at the high point for year.

They’re just expensive.

In mid-August of 2014 we had 135 NSDCC houses for sale that were listed under $800,000.

Today we have 14!

The number of houses for sale usually peaks in July or August, so the inventory should start to unwind from here as sellers pack it in for the year.

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Posted by on Aug 13, 2018 in Inventory, Jim's Take on the Market, Market Buzz | 0 comments

Inventory Watch

The most interesting stat of the day?

While the rest of the inventory numbers are relatively stable, the number of pendings in the Under-$1,000,000 category is at its lowest point since January – and the average LP-per-sf is about 5% lower than January too.

The number of NSDCC active listings under $1,000,000?

Almost three times as many as we had in January!

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Posted by on Aug 6, 2018 in Inventory, Jim's Take on the Market | 0 comments

Slowdown Data

Here is some data to help calibrate the slowdown fears.

These NSDCC detached-home inventory counts are from the first week of April, and the last week of July, plus a look at the closed sales for the first seven months of the year:

April Inventory
July Inventory
# Diff
NSDCC Sales Jan-July

The 2018 numbers don’t look much worse than in recent years.  Once the July sales are finalized, this year’s sales count should be close to 1,700.

This is the time of year when the OPTs are stacking up, which makes it look like garbage time, and easier for buyers to go on vacation instead.  It also makes it tougher for the decent buys to stand out.

Posted by on Aug 3, 2018 in Inventory, Market Buzz, Market Conditions, North County Coastal | 3 comments

Inventory Watch

Need just one statistic to indicate a slowdown? It was just three months ago (April 23rd) that we had 59 houses for sale, priced under $1,000,000.

Today there are 116 houses listed under $1,000,000.

Here are the NSDCC inventory counts from the last week in July:

NSDCC Detached-Home Active Listings, Last Week of July

There’s no need to panic – we’ve been in this situation before, inventory-wise. We still have 364 in escrow too, which has been a consistent number over the last seven weeks.

This is about the last week to open escrow and get in before school starts!

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Posted by on Jul 30, 2018 in Inventory, Jim's Take on the Market | 0 comments

Inventory Watch – Stage Three?

The pending count finally reversed course and gained 6% this week, after dropping for the last five weeks.  Just in time to be greeted by this ZH post on the three stages of a housing bubble – hat tip to Doug for sending in:

Stage One usually ends with price spikes in the hottest markets so extreme that they generate headlines. Like these:

Phase Two of a typical US housing bubble begins when sellers read these headlines and note that prices are now above what they could have gotten in the last bubble. With the memory of how badly they’d wished they’d sold at the peak, they realize that they’ve been given a second chance to cash out, move to a cheaper, less-frenetic place, and coast on their real estate riches. So they call a realtor and list their house. As do a bunch of their neighbors. Supply, out of the blue, jumps.

That may be what’s happening now:

The most competitive, tightest housing market in decades may finally be loosening its grip, and that could put pressure on overheated home prices. The supply of homes for sale in the second quarter of 2018, the all-important spring market, rose at three times the rate of the same period in 2017, according to Trulia, a real estate listing and research company.

The inventory jump was the largest quarterly improvement in three years and could be signaling a slight thaw in today’s housing market. But it is just a start.

“This seasonal inventory jump wasn’t enough to offset the historical year-over-year downward trend that has continued over 14 consecutive quarters,” according to Alexandra Lee, a housing data analyst for Trulia’s economics research team.

The supply of homes for sale is still down 5.3 percent compared with a year ago. Still, all real estate is local, and some markets are seeing greater relief. Thirty of the nation’s 100 largest cities, including New York City, Miami and Los Angeles, now have more supply than a year ago.

Of course, the increase is a double-edged sword. Supplies are increasing because sales are slowing, and sales are slowing because prices are so high. In New York City, the median household must spend 65 percent of its income to buy a home, according to Trulia. In Los Angeles, it takes 59 percent.

“Among these unaffordable metros, San Diego posted the largest inventory growth—22 percent year-over-year,” wrote Lee. “Compare that with the same quarter last year, when that Southern California metro registered a 28 percent inventory decrease.”

Mortgage applications to purchase a newly built home plummeted nearly 9 percent in June compared with June 2017, according to the Mortgage Bankers Association. This suggests lower new home sales going forward, despite higher price.

CNBC link

Stage Two’s deluge of supply sets the table for US housing bubble Stage Three by soaking up the remaining demand and changing the tenor of the market. Deals get done at the asking price instead of way above, then at a little below, then a lot below. Instead of being snapped up the day they’re listed, houses begin to languish on the market for weeks, then months. Would-be sellers, who have already mentally cashed their monster peak-bubble-price checks, start to panic. They cut their asking prices preemptively, trying to get ahead of the decline, which causes “comps” to plunge, forcing subsequent sellers to cut even further.

Sales volumes contract, mortgage bankers and realtors get laid off. Then the last year’s (in retrospect) really crappy mortgages start defaulting, the mortgage-backed bonds that contain their paper plunge in price, et voila, we’re back in 2008.

How far away is the climax of Stage Three? It’s too soon to tell, with just one quarter of trend-reversal data on-hand. But if you’re thinking of selling (or if you own a lot of bank stocks or are thinking of shorting such stocks), now might be a good time to start paying attention and taking the appropriate steps.

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Posted by on Jul 16, 2018 in Inventory, Jim's Take on the Market | 7 comments

Inventory Watch

The pending counts have been dropping precipitously since June 11:

NSDCC All: -15%

Under-$1,000,000: -29%

While a lower number of pendings can be due to more closings from the fat part of the selling season, it not like we’re setting any sales records either.  The NSDCC June sales are down 20%, year-over-year, just like they were in May.

Get Good Help!

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Posted by on Jul 9, 2018 in Inventory, Jim's Take on the Market, North County Coastal, NSDCC Pendings, Sales and Price Check | 1 comment

Local Predictions for 2018 – Update

We’re halfway through 2018 – let’s check on the predictions.  Here is where Rob Dawg, Franklin Jones, Ash, and myself guessed what would happen this year:

My thoughts in December for 2018, plus extra stats:

I guessed earlier that NSDCC detached-home sales will drop 5% in 2018 – but that would still give us around 3,000 houses sold, which is a healthy amount, given that rates and prices are both expected to be higher.  The median sales price, full of imperfections, should keep rising, and I’ll guess +5% in 2018.

Those same factors, plus a few more boomer liquidations, could also create a bull rush frenzy, with intense wrangling for decently-priced houses listed under $1,500,000.  With more inventory, we could approach 3,200 sales again (3,084 NSDCC houses sold in 2017) .

The higher-end market is challenging too, but in the opposite direction.  Today there are 374 NSDCC houses for sale listed over $2,000,000, and we sold about 50 per month in 2017.

We ended the year with 62% of the houses for sale between La Jolla and Carlsbad being priced over $2,000,000, with a median list price of $2,495,000 overall.

We had 10% fewer listings in 2017 than in 2016, but 2% more sales!

Where are we now?

First-half NSDCC sales are down 11% year-over-year.

Median list price today is $2,295,000, which is down 9%, compared to December 27, 2017.  Of the 935 houses for sale, 55% of them are priced over $2,000,000.

The 2017 NSDCC median sales price was $1,225,000, and the median sales price has been $1,325,000 for the first half of 2018, an 8% increase.

We’ve sold 317 houses over $2,000,000 in 2018, or about 53 per month.

Although we had 10% fewer listings last year than we had in 2016, we have had 9% more listings this year than in the first half of 2017.

Nine percent more listings, but 11% fewer sales?  Expect that buyers will become increasingly picky – there are plenty of houses to go around!

Posted by on Jul 5, 2018 in Inventory, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check, Thinking of Buying?, Thinking of Selling? | 3 comments

Inventory Watch

If we were to compare a simple set of data points to describe the general condition of the NSDCC market today, it would be these:

The UNDER-$1,000,000 Market:

NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Apr 2
Jul 2

The lowest-end of the market – the place that should be the hottest – has almost doubled the number of houses for sale over the last 90 days (and this is the selling season!).

During the same period, their average list pricing has declined 5%, and the number of pendings has dropped 20%. A casual observer might conclude that the market is in freefall, but it’s just sorting itself out.  We are seeing what the ibuyers are finding out – sellers are willing to take less, and still call it a win.

While sellers would love to get a crazy-high, new-record price for their home, prices have gone up so much recently that even if they have to take less, it is still a substantially-higher profit over just a few years ago.

Last year, there were 314 closed sales between April 2nd and July 2nd, but this year the current count is only 217 – so not every seller is in recognition.

Get Good Help!

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Posted by on Jul 2, 2018 in Inventory, Jim's Take on the Market, Market Conditions | 4 comments

Inventory Watch

The total number of pendings dropped again this week, which makes the plunge now -11% over the last 14 days.  Hopefully it’s a result of escrows closing, but NSDCC sales between June 1-15 was down 5% compared to last year.

I said in the last video that we should see a surge of activity over the next few weeks as the selling season winds down, but it looks like it will be a long cold winter after that.

For those who detest my incessant ranting about the business, you’re in luck today because George got me going early this morning. Scroll down to the comment section two posts down, or click HERE.

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Posted by on Jun 25, 2018 in Inventory, Jim's Take on the Market | 0 comments