Padres Contest Winner!

Padres’ Tickets Contest – Guesses Under 800:

740 – Doughboy

755 – Neil

777 – Bb

785 – Recordsclerk

799 – TominLaCosta

Even if a few more are added in the coming days, Bb is our winner – congratulations!  (Bb, contact me for tickets)

Today’s count:

NSDCC New Listings Jan 1 to Feb 28 (as of March 11th):

2018: 783

2019: 767

There was enough concern about how the market wrapped up in the second half of 2018 that I thought we could see more sellers getting an early start in 2019.  But there’s no panic – we didn’t even list as many homes as we did in the first two months of 2018, let alone more.

Inventory Watch

We’ve had a mini-surge in listings over the last few days!  There will be a few more added to the MLS this week, but it looks like the total for the first two months of the year will wind up in the 760-785 range.

NSDCC New Listings Jan 1 to Feb 28 (as of March 4th):

2018: 783

2019: 760 

Padres’ Tickets Contest – Guesses Under 800:

740 – Doughboy

755 – Neil

777 – Bb

785 – Recordsclerk

799 – TominLaCosta

We wanted to gauge whether there was any panic setting in among sellers, judged by how many more were rushing their home onto the market early in the selling season.  If there would have been a surge of 5% to 10% more listings during the first two months of this year, it could have been a tipping point.

But as it turns out, we’ll be lucky to match last year’s total.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Closed sales are better than expected:

NSDCC Closed Sales:

Year
January
February
Median SP YTD
Avg $$/sf YTD
2017
175
173
$1,222,000
$513/sf
2018
150
164
$1,294,005
$573/sf
2019
150
171
$1,275,000
$540/sf

(Updated March 11th)

The 2019 median list price and sales price were the same $1.275M!

But the NSDCC Pendings are stalling, and now 19% under last year’s total at this time, so I’ll stick with my -20% guess on sales. We got off to a hot start this year, but the enthusiasm is slowing – based on this:

Weekly Total Pendings

Week
2018
2019
% diff
Jan
244
217
-11%
Feb
262
233
-11%
Feb
280
255
-9%
Feb
295
263
-11%
Feb
318
261
-18%
Mar
328
267
-19%

The average list-price-per-square-foot of listings priced under $1,500,000 has been flat lately, and about the same as last year. But listings priced between $1,500,000 and $2,000,000 are averaging about 10% higher LP/$ than last year.

A sluggish selling season would probably end earlier than usual, but give us at least a couple of more months, please!

(more…)

NSDCC Actives/Pendings

It’s March! How are we doing?

We’ve considered a 2:1 ratio of active-to-pending listings to be a sign of a healthy market. Though pricing is much higher than in the recent past, we’re under 3.0 is all but the highest-end areas:

Here are the Actives/Pendings stats for each area:

Area
Zip
ACTIVES
PENDINGS
ACT/PEND
SOLDS Last 30 days
Cardiff
92007
21
11
1.9
3
Carlsbad NW
92008
42
15
2.8
12
Carlsbad SE
92009
72
38
1.9
29
Carlsbad NE
92010
25
11
2.3
12
Carlsbad SW
92011
41
27
1.5
18
Del Mar
92014
78
18
4.3
9
Encinitas
92024
74
43
1.7
23
La Jolla
92037
171
32
5.3
18
RSF
67+91
179
23
7.8
8
Solana Bch
92075
25
6
4.2
5
Carmel Vly
92130
80
37
2.2
31
All Above
All
808
261
3.1
168

The first half of 2018 was very active, so just to stay close would be a win.

Sales in January caught up with last year’s count, and the year-over-year February sales are stronger than expected too – we had MORE sales in 2019! (updated later on March 1st)

NSDCC Closed Sales:

Year
January
February
Median SP YTD
Avg $$/sf YTD
2018
150
164
$1,294,005
$573/sf
2019
150
165
$1,275,000
$540/sf

Pricing is soft, but close enough for now.

Expectations for Selling Season, 2019

We saw yesterday that we had 5% fewer January listings year-over-year, giving the impression that sellers aren’t rushing their homes to market.

But we came into 2019 with more leftover listings from last year – and they are already starting to pile up:

NSDCC Detached-Homes

Year
January Sales
Active Listings, First Week of February
2016
171
821
2017
175
774
2018
150
652
2019
145
774

Last year we were overdue for some slowdown, but were able to survive lower January sales because the inventory heading into the selling season was so thin that urgency was higher among buyers, which kept the party going.

This year we had fewer sales even with higher inventory, which means the selling-success rate is dropping steadily.  Once more unsold listings start stacking up, the urgency among buyers will diminish.

This is the same data as yesterday, but over three years instead of five, and shows how the 2018 selling season didn’t pop like in previous years:

Click to enlarge

Mortgage rates went over 4.5% in May which helped to discourage sales, but you can see how the initial surge barely got past March.  Even if rates stay where they are today, we could have a muted sales season just because we are already loaded with listings.

Spring Selling Season Starts Now

Click to enlarge

The Big Game is over, so many will turn their full attention towards moving!

We’re off to a good start:

  1. Mortgage rates are about the same as they were last year,
  2. The NSDCC inventory isn’t exploding, and
  3. The NSDCC Pendings have jumped up 19% in the last two weeks!

You can see in the graph above that sales start right away, and March closings are substantially higher than in February.  Also note that by mid-summer, sales were dropping off quickly too.

We should have three hot months this year – at least!

“Picking Up”

We were due for a surge in market activity with rates coming down, and the Chargers and rain both being done.  Several agents are reporting increased activity over the last few days, and it seems like buyers are engaging.

We should see heightened activity for the next week, then a break for a few days around the Super Bowl as everyone grabs their guacamole, with the Spring Selling Season beginning in earnest on February 4th.

The weekend of February 9th and 10th should be huge!

It’s nice that we have somebody to talk to now, but what does it mean?  It means people are looking around – that’s it.  Those who find an incredibly-good fit might pounce, but most are going to wait-and-see how the season develops.

So far, we’re having about the same number of new NSDCC listings come to market as we did last year, so no panic among potential sellers.  Their main focus is only on how high they can push their price – it’s the buyers who are paying close attention to the real market activity, and what they see is determined by their mindset.

Here are some examples:

NSDCC Spring Kick 2018

Though the number of pendings has been lower recently, the closed sales are about the same as last year. Buyers are probably more reluctant to cancel a sale once in escrow?

NSDCC Action Between Jan 1st and April 10th

Year
# of Closed Sales
# of New Listings
CS/NL
% of Sales Over $1M
2013
765
1,481
52%
40%
2014
678
1,408
48%
51%
2015
730
1,445
51%
58%
2016
639
1,550
41%
58%
2017
648
1,368
47%
61%
2018
653
1,371
48%
73%

Almost three quarters of the sales are over $1,000,000 now!

Spring Selling Season is Done

Typically, sales begin to taper off in July and decline for the rest of the year.

This year should be no different…..and the drop might have already begun:

NSDCC Monthly Sales, 2017

May: 343

June: 225 (as of this morning)

The last week of the month always has a flurry of closings, and we should get close to 300 by the time the last June count is done.

But the rest of the year should be a bit slushy.

Spring Fizz?

Reader Tom had this observation yesterday:

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

Year
# of Sales
Median SP
Avg. $/sf
2012
345
$813,500
$367/sf
2013
438
$873,250
$406/sf
2014
351
$1,030,000
$494/sf
2015
419
$1,100,000
$496/sf
2016
365
$1,142,331
$525/sf
2016
361
$1,140,000
$499/sf

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?

  1.  Don’t use Active Listings as Comps – All the active listings tell you are the list prices that aren’t working.
  2.  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.
  3.  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!
  4.  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.
  5.  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!

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