January house sales between La Jolla and Carlsbad look pretty good, given the higher pricing and TRID fumbling.
Our good luck with sales should continue – rates are lower this month, plus February actually has one more business day than January, thanks to leap year!
NSDCC January Sales and Pricing
# of Sales
Days on Market
I wouldn’t worry too much about the median sales price being lower, because the monthly comparisons have smaller sample sizes and more easily affected by the different mix of houses. The number of sales will probably catch last year’s count once the late-reporters are done, and the brisk 52 DOM is really cooking, given the higher pricing.
We have been measuring the ‘health’ of a market by comparing the actives to pending listings, and figured that a 2:1 ratio was about right. You can click on the ‘Actives/Pendings’ button below (next to date) to see the history.
But it looks like the day has come – that you have to spend at least a million dollars to buy a decent house near the coast:
The number of NSDCC houses for sale priced under $800,000 is down to fifty (50), which is the lowest amount since we started counting just over two years ago. There should be quite a scramble for the quality homes available, and the definition of quality is probably deteriorating by the minute!
Click on the link below for the complete NSDCC active-inventory data:
The fourth quarter of 2015 didn’t show any surprises – sales and pricing are rumbling along. Del Mar had a statistical pricing slump, but if you look at the median cost-per-sf ($601/sf, $627/sf, $617/sf), it helps to smooth out the bumps in a super-custom area:
There will still be late-reporters, but let’s review the annual NSDCC sales.
NSDCC Annual Sales
Median Sales Price
What can we expect for sales this year?
Rates have dropped back under 4% this week, which will help. But sellers will be expecting higher prices in 2016, which will dampen the buyers’ enthusiasm.
My guess for 2016?
Rates at or below 4% = 5% fewer sales.
Rates above 4% = 10% fewer sales.
If rates get into the mid-4s, then my guess is for 25% fewer sales.
The lack of quality inventory will contribute greatly too. Buyers don’t mind paying a little more if they get something extra for it.
But we need to become accustomed to a regurgitated inventory.
It’s likely that we will continue to see sellers try to get their inflated price year after year, rather than lowering the price until it sells. Of the 88 new NSDCC listings this year, 61% of them were on the market in 4Q15. It is a higher-end phenomena too – virtually all listings over $2,000,000 were refreshed.
The San Diego Case-Shiller Index is 6.2% higher than it was 12 months ago (October to October readings), which beats just about everyone’s expectations.
But the tony north-coastal region (La Jolla to Carlsbad) had already experienced healthy price gains since 2012. At the beginning of 2015, lower mortgage rates (3.5% to 3.75%) fueled a surge of sales at higher pricing, but then things mellowed out the rest of the year – just like Rob Dawg predicted!
If it weren’t for the blip in November, it would be clear that the first quarter of 2015 was the best time to sell, price-wise. If we do get more inventory this year, the same will probably be true – more houses for sale combined with higher mortgage rates = more of a buyer’s market.
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