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.
Just a month after President Donald Trump’s inauguration, a federal anti-money laundering program that targets luxury real estate is set to expire.
The dragnet monitors pricey home deals for signs of dirty cash, helping detect criminals who launder money through real estate. Manhattan and Miami-Dade County were the first markets scrutinized by the feds.
Here’s the big question: Will Trump — who made his money as a developer — keep the heat on the real estate industry? And if the administration of a developer-turned-president chooses not to renew or expand the regulations, will it be perceived as a conflict of interest.
Unlike other industries where cash changes hands freely, real estate has few checks on buyers.
Drug dealers and corrupt foreign officials have been busted buying condos and mansions in the United States. While the Obama administration rules were blasted by developers and brokers as faulty, they don’t seem to have hurt business as much as first feared since going into effect in March.
For those who saw the July stats and wanted a deeper look, here is a three-month comparison that wraps up the spring selling season:
NSDCC Sales, May-July
# of May-July Sales
Median Sales Price
In spite of the median sales price increasing 10% year-over-year, sales have been hanging tough in 2016. Will it keep going with distractions like the Olympics, our political circus, and school starting?
Click on the ‘Read More’ link below for the NSDCC active-inventory data:
A good way to measure the strength of the spring selling season would be to examine home sales that close in May and June. In spite of medians that have jumped 30% or more in just five years, and a low-end market that has evaporated, sales in May/June of this year were very strong:
NSDCC House Sales, for May/June
# of Sales
# of Sales Under $800,000
It’s not the low-end that is carrying this market – it is the affluent. It’s why the market will likely keep going – people have more money than houses!
You can also see how difficult it is to downsize. Those who are looking to pocket a big windfall – hopefully the entire $500,000 tax-free amount – will recognize how hard it is to stay around the coast.
Of the 98 sold under $800,000, only 31 of them were single-story!
The national cheerleaders get excited about every nugget of data, and are happy to jump to conclusions. Yunnie is finally tip-toeing around the downsizing trend that we see everywhere around here, but he can’t assume that those sellers are buying too:
“The May gain over April signals that the real estate market has maintained strong momentum all spring,” says realtor.com chief economist Jonathan Smoke. “We are now in this year’s peak home buying months, and this pace of sales should produce the gains we have been forecasting that will make 2016 the best year of home sales in a decade.
The biggest challenge to prospective buyers right now is tight supply, which we have seen for 45 consecutive months. In these conditions, home values have strong support, but potential buyers will continue to face challenges finding a home for sale that meets their needs. That is why we’re seeing the age of inventory drop dramatically while prices have gone up 5 percent over the last year and are now at record nominal levels.”
Lawrence Yun, NAR chief economist, says existing sales continue to hum along, rising in May for the third consecutive month. “This spring’s sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they’ve accumulated in recent years and finally deciding to trade-up or downsize,” he says. “With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now.”
Adds Yun, “Barring further deceleration in job growth that could ultimately temper demand from these repeat buyers, sales have the potential to mostly maintain their current pace through the summer.”
The local NSDCC sales in May built on the momentum from April, and the 2016 three-month total looks very similar to last year (865 vs. 859):
As mortgage rates dipped back into the mid-3s in February, buyers responded. The closed sales in April and May were healthy, and supported by sellers who are being reasonable about price – the cost-per-sf is about the same as last May.
Monthly Detached-Home Sales, Carlsbad to La Jolla
Flat to slightly-rising prices are the happy compromise for everyone!
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