I think the market turned this week. I’m seeing more inventory where I look. I’m seeing more price reductions. I’m seeing houses come on decently priced that aren’t flying off market. I think we will look back in 2 years and see this was the peak month. Downhill from here.
We’re coming off an active spring selling season so far:
NSDCC Detached-Home Sales between March 1 – April 15
# of Sales
We might be seeing the real estate tides going out, and the accurate pricing becoming more obvious, which happens this time of year. The over-priced listings start stacking up once we get this far into the selling season (May starts next Monday!).
We also noted last year that the peak time to sell is right now, and that by May 15th the new pendings start to drift off. Could the selling season be closing out earlier this year?
The rest of the selling season is going to be case-by-case. There is a smaller beach house in Oceanside today listed in the low-$700,000s that has so much action that the bids are pushing towards $800,000!
What can sellers do?
Don’t use Active Listings as Comps – All the active listings tell you are the list prices that aren’t working.
Don’t Rely on Sold Comps as Absolute Proof of your Home’s Value – They are likely indicators, but those buyers might have been crazy, or got suckered into a hot bidding war. Question the cash sales too; buyers are throwing around money like water.
Don’t Use Range Pricing – Give buyers a clear number to shoot at. My listing in NE Carlsbad suffered an unfortunate occurrence when the house across the street listed on a too-large range of $725,000 – $800,000. The owner/agent got four offers over the first weekend, which did the same thing it does to all sellers – it makes them want the top of the range. I told her she should ditch the low end, and just go with the $800,000. She didn’t, and instead cancelled the listing three weeks later. In the meantime, I’m trying to sell the same model with view for $849,000, which would have looked reasonable if hers was $800,000 with slope instead of view – we both could have sold!
Lower Your Price – If you’ve been on the market for weeks, buyers think something is wrong with your price. Buyers are on to it – ‘how long have you been on the market’ is the most heard question at open houses.
Keep Improving Your Home – If you don’t want to lower the price, you can keep improving your home along the way to justify the price.
Daytrip left this comment:
I think price peaks and drops will be like playing whack-a-mole this season. Take out the noise, and it’ll still be heading up. Quality properties will get good prices.
I agree, but once a house is for sale, it is subject to market forces. Sometimes you just hit a dry spot, and adjusting is more effective than waiting!
The overall environment can be sized up by comparing how many houses have sold, compared to the number of new listings hitting the market.
A surge of new listings can set buyers back on their heels. We could make that case about what happened last spring, when we had 100 more NSDCC listings hit early, and sales dropped a bit from the previous year:
NSDCC Action Between Jan 1 and April 10th
# of Closed Sales
# of New Listings
% of Sales Over $1M
The 41% from last year looks like the anomaly now though, and this year looks stronger than ever, with sales maintaining last year’s pace in spite of almost 200 fewer listings! All while the lower end has been disappearing – this year we have 61% of our sales over $1,000,000!
A normal-looking week around North San Diego County’s coastal region:
I was comparing notes with a top agent yesterday, who agreed that the market is on fire right now. Houses that didn’t sell last year have been selling now, whether they lowered the price or not. Expect the surge to continue until the first week of April – we will lose some steam due to tax day on the 15th, and Easter on the 16th of April.
We noted that it should get hot again for 3-4 weeks, up to graduation season, and then another surge after the Fourth of July for a month or so!
Click on the ‘Read More’ link below for the NSDCC active-inventory data:
Historically we have considered our market to be relatively ‘healthy’ when the actives-to-pendings ratio is around 2.0. When you compare today’s stats to last February – we’re looking pretty good!
NSDCC detached-home market (La Jolla to Carlsbad):
Oct 28, 2015
Feb 1, 2016
Mar 23, 2016
June 21, 2016
Aug 17, 2016
Dec 4, 2016
Feb 4, 2017
For those wondering how we will get out of the gate in 2017, consider how fast the market picked up last year – by mid-March, we were already in full-tilt boogie mode, reflected in the lowest ratio of the year!
Here are last February’s Actives/Pendings for each area:
February 1, 2016
Median LP of ACT
Here are today’s numbers – every area except the ultra-high end is sporting a sub-2.0 ratio going into the selling season! Carmel Valley has 41% fewer active listings than a year ago, and the median list price of their active listings today is 33% higher than last year!
Buyers are wondering, “When will we see more inventory?”
We got off to a hot start in 2016, with the first three months having more new listings than in previous years. But last month was a dud, relatively.
NSDCC New Listings By Month
This is the chart of NSDCC sales sorted by the month they went pending. In spite of the surge of new listings in the first quarter of 2016, sales in January and February were the lowest of recent years.
NSDCC Sales Sorted By The Month They Went Pending
I think buyers will be somewhat hesitant in 2017, and sales might get off to a slower start like we did last year. But there are 306 NSDCC houses that are currently pending! By March, we should be rocking.
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