Slowdown?

This collection of opinions has more reach – and more influence – than those of any part-time blogger.  Thankfully, these experts are split on whether the alleged slowdown is temporary, so readers will just be on their merry way in hopes that it will all work out.

It’s what happens when the ivory-tower group chimes in – they attempt to apply the vague old theories to what is happening today, but we don’t know if their principles are still valid.

Gina is the only one who mentioned a specific data point, so let’s put the actual number on it:

First-half sales of detached-homes in San Diego County between $1,000,000 and $2,000,000 were nearly identical year-over-year (1,551 in 2018, and 1,546 in 2019), while sales over $2,000,000 dropped 10% YoY.

Gary probably has the best take on it above, and his day-to-day focus is advising builders.

My thought:

We have a low supply of quality homes mixed with a very affluent demand which is causing every aspect of selling homes via the MLS to be under attack.  Rather than championing (and improving) the traditional system of selling homes, the industry is going to allow off-market sales, ibuyers, commission lawsuits, and Wall Street to sway the outcome.

It will take away some of the free-market influence, which could keep us at an artificially-inflated plateau.

But then again, I’ll stick with what Yogi Berra said,

“It’s tough to make predictions, especially about the future.”

Link to UT Article

Relatively-Low Inventory

Rich’s latest graphs are out, and this inventory history above shows how relatively few homes are for sale locally.

The median detached-home list price for the county today is $849,000!

He did mention a reader’s theory that in the era of online search portals, the inventory has become more efficient.  Better-educated buyers are making faster decisions these days, which keeps the inventory counts down. But the hot buys have always sold quickly, and the over-abundance of data could be dumbing down the decision-making.

Do buyers just grab a house now?

More of Rich’s graphs here:

https://www.piggington.com/may_2019_housing_data

NSDCC Sales, First Half

NSDCC Detached-Home Sales Jan 1 to June 30:

Year
Number of Closed Sales
Median Sales Price
Median Days on Market
2013
1,670
$919,950
21
2014
1,430
$1,020,000
24
2015
1,560
$1,120,000
23
2016
1,526
$1,150,000
24
2017
1,595
$1,225,000
19
2018
1,420
$1,325,000
17
2019
1,371
$1,301,000
22

We saw yesterday that the number of new listings has remained steady, but it seems that buyers keep getting pickier.  First-half sales are down 4% year-over-year, and pricing is a little soft too.

But last year’s sales were down too, and if we consider the 2016 count to be the median in the group above, then this year’s first-half sales are 10% under that.

Yunnie is optimistic though:

Yun said consumer confidence about home buying has risen, and he expects more activity in the coming months. “The Federal Reserve may cut interest rates one more time this year, but there is no guarantee mortgage rates will fall from these already historically low points,” he said. “Job creation and a rise in inventory will nonetheless drive more buyers to enter the market.”

We’ll see!

NSDCC Listings, First Six Months

Bill (in Giants jersey) from the Bay Area has been reading the blog for the last ten years!

He won the earlier contest for Padres tickets, so when he and his family were here on vacation, they took in the first game of the series last night – a 13-2 shellacking by the Giants! They got on TV too:

Congrats Bill and family!

The contest was predicting how many new listings we would have in the first two months of 2019. Bill’s guess was 777, which was the third lowest of those submitted – we all thought more sellers would want to cash out at these prices!

Yesterday’s doomer was looking for the right evidence – historically, one of the first signs of trouble is a surge of inventory.  We saw it last time in the first half of 2006 when listings jumped 23% as sellers started scrambling to get out:

NSDCC Detached-Home Listings Jan 1 to June 30:

Year
Number of Listings
Median List Price
2005
2,892
$1,150,876
2006
3,547
$1,120,000
2007
3,120
$1,182,500

But still no surge here locally in 2019.

Our inventory count this year is looking normal – and 24% under the 2006 count:

NSDCC Detached-Home Listings Jan 1 to June 30:

Year
Number of Listings
Median List Price
2013
2,790
$1,179,000
2014
2,713
$1,120,000
2015
2,871
$1,182,500
2016
2,999
$1,425,000
2017
2,712
$1,425,000
2018
2,700
$1,499,000
2019
2,705
$1,569,000

In the first half of 2005, we had 400 sales close under $750,000, and this year we had 55.

We had 560 homes list for $2,000,000+ in the first half of 2005, and 238 closings.  This year, we had 901 listings over $2,000,000, and 298 closings!

Inventory Watch

One of our favorite doomers says the tide is rolling out because inventory is up 37% in L.A.

There are 11.5% more San Diego homes for sale, year-over-year.  But in an area of 3.3 million people, having less than 10,000 homes for sale doesn’t sound like panic time – and other metros have more:

Currently we have 1,029 NSDCC houses for sale, and last year at this time the count was 978, or 5% lower.

The tide rolls out at the end of summer- let’s see how many sellers stay on the market in 4Q19.

https://www.zillow.com/research/local-market-reports/


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Carlsbad Village Redevelopment

Shouldn’t Matt Hall sell his downtown properties or resign as mayor so the regular political process can be conducted?

There will be no moratorium on development in the Village and Barrio.

The City Council decided to not move forward with the proposal brought forward by Councilwoman Barbara Hamilton during its June 25 meeting after receiving feedback from city staff and discussion regarding a lack of standing to make such a move.

Cities can adopt interim, urgency ordinances prohibiting uses in conflict with a general plan, specific plan or a zoning proposal. However, a four-fifths vote is needed, along with a finding of a current and immediate threat to public health, safety or welfare.

But since Mayor Matt Hall was recused due to financial interests in the Village and Barrio, a majority vote would have been required for a moratorium.

However, Hamilton, who represents District 1, which covers the Village and Barrio, received approval to bring back five items for further discussion for the council workshop on July 9 and approval for a portion of the Village and Barrio Master Plan on Aug. 20.

Those issues include housing and parking in-lieu fees, historical preservation, permitted uses and “decision-maker definition.” The council also passed a decorative lighting study in the Village, 4-0 (Hall was recused).

Hamilton said she her goal was to take a step back from the construction and ongoing redevelopment to assess the area’s needs on a larger scale. Specifically, affordability was a big topic of discussion as the council attempts to incorporate more affordable housing in those neighborhoods.

“As development continues, and we continue to offer housing in-lieu and parking in-lieu, both of these fees haven’t been reviewed in years,” Hamilton said. “These don’t seem to incentivize affordable housing or mobility solutions for the community. The end goal is to take advantage of the authority that we have as council to restrict the use of housing in-lieu and parking in-lieu.”

A majority of speakers, meanwhile, railed against the proposed moratorium saying it would only increase rents and negatively affect businesses.

Michael McSweeney, senior public policy advisor for the San Diego Building Industry Association, did not hold back against the proposed moratorium.

“This is something unprecedented,” he said. “In the middle of a housing crisis, we want to talk about stopping. That’s the equivalent, in my mind, if there’s a wildfire we’ll talk about water rationing.”

He, along with others, also questioned where the danger to public health safety was to call for a discussion about a moratorium, which must have been proven to enact an urgency ordinance of 45 days.

Brendan Foote, who does adaptive reuse, said the council is missing one point regarding affordable housing, the cost of land. A starting point of $200,000, for example, to purchase the land, plus thousands of dollars for city fees and then construction costs make affordable units unattainable.

“I love and respect the charm of Carlsbad Village and don’t see it going anywhere,” Foote said. “We want to see positive change. We need to get a little more creative and look at this dwelling units per acre.”

Hamilton then pivoted away from the moratorium and asked for her other concerns be prioritized before the council.

Councilwoman Cori Schumacher said it was not prudent for a moratorium, as it is up to the council how to apply the tools at their disposal for development. Also, the council does not have final authority over projects in the Barrio under the new master plan.

The Planning Commission has final say, but the council will consider taking over final approval when the master plan returns on Aug. 20.

https://www.thecoastnews.com/carlsbad-avoids-village-barrio-moratorium/

Redlining in San Diego

The history of housing discrimination is getting a lot of attention these days, and rightfully so.  If you, or someone you know, wants to contribute, KPBS is looking for stories:

KPBS is doing an investigation into the legacy of “redlining” in San Diego.

This is the historic practice of excluding minorities from certain neighborhoods through regulations on mortgages, leases and home purchases. We’re looking into the impact this practice has had on the economic prosperity of different neighborhoods in San Diego.

 Some families in San Diego may have benefitted from this history, through no fault of their own. Others may have been hurt by it.

 If you or your family has any connection to this history, or if you know someone who does, please reply to this email or send an email to sources@kpbs.org with “Redlining” in the subject line.

 Thank you for sharing your knowledge and becoming a trusted KPBS source!

There was actually a red zone in La Jolla around the Taco Stand on Pearl!

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