Frenzy Monitor – June

Almost all areas are bursting with active listings. Encinitas has joined La Jolla and Rancho Santa Fe in the “List ‘Em High And Let Them Fly” category. The median list price in the 92024 is $2,998,000!

Will buyers be affected? Will they notice?

La Jolla and Rancho Santa Fe don’t allow for-sale signs in the yard so you won’t notice just by driving around. The City of Encinitas is 20 square miles so having 75 signs probably won’t look like a glut. The average DOM is 40 days in Encinitas – once it gets up to 71 like it is in the Ranch, then buyers might take notice.

Peak 2024

The local market got off to a hot start in 2024 (January was hot – something to remember in 2025), so it follows that the selling season could conclude sooner than hoped. Let’s use the data to help decide it.

The NSDCC inventory peak of the year has been in mid-July recently:

July 17, 2023: 430

July 25, 2022: 480

July 19, 2021: 392

When we include the Coming Soons, the number of active listings today is 495 which blows right by the high counts of previous years – and we’re not done yet. The actives will be stacking up for another few weeks before sellers get discouraged and give up on 2024.

How about closed sales? They are the best indicator of all.

NSDCC Monthly Sales

The April sales this year will probably be the high point of 2024. There are 169 pendings today, and 117 of those went pending before June 1st so they have a good chance of closing this month. But adding those to the 44 already closed only gives us 161 sales for June.

It’s ok that the peak has come and gone already for this year.

It just means pricing needs to be sharp – sharper than ever – for the duration!

$33,995,000

Having a 2.65-acre lot in the middle of La Jolla is rare!

Here are 26 reasons why you absolutely must see this amazing estate considered “The Crown Jewel of La Jolla.”

1) This authentic Santa Barbara estate was masterfully designed by renowned architect Edgar Ullich (Mills Act Designation)

2) Updated, expanded, and modernized by the current owner and Island Architects

3) 2.65 acres of enchanted gardens inspired by Balboa Park (Kate Sessions)

4) Panoramic views of the ocean and coast 5) Resort-inspired private saltwater pool, koi pond, spa, and cabana with full kitchen and bathroom

6) Regulation tennis court

7) Chef’s kitchen with all the modern amenities

8) Formal sitting room

9) Music room and study

10) Billard and bar lounge

11) Hollywood-style theater

12) Game room and golf simulator

13) Grand formal dining room

14) Spacious owner’s suite with two spa-like bathrooms and large walk-in closets

15) Gym with redwood sauna

16) Large bedrooms all ensuite

17) Charming bunk room for kid sleepovers

18) Large family room

19) Multiple verandas with ocean views and vistas to your own “Park”

20) Two separate and spacious guest suites (2br/1 Ba) (1br/1Ba)

21) Amazing mature vegetation that millions of dollars could not replicate

22) 6-car garage

23) Gated compound

24) Home automation for lighting and audio

25) Ten romantic fireplaces

26) Two laundry rooms

https://www.compass.com/listing/1205-muirlands-drive-la-jolla-ca-92037/1580780512648973241/

Inventory Watch

The count of active listings is powering skyward, and could be 500+ in the next week or two. There haven’t been more than 500 actives between La Jolla and Carlsbad since before the pandemic, so you can say that the inventory getting back to normal.

But unless pricing turns around, it won’t be be the same “normal” like it was prior to the pandemic.

The median sales price in 2019 was $1,327,250. This year it is $2,350,000.

The median list price today is $3,500,000 today.

The median list price was $4,444,000 when 2024 began. There were only 255 active listings to start the year. The distribution:

NSDCC Active Listings

(more…)

Jim the Woodworker

Here’s an example of the transformations we do in our quest to achieve top dollar for our sellers.

The existing hardwoods were acceptable, but the darker cabinets and slate backsplash weren’t going to impress today’s buyers enough to pay top dollar. We decided to reface the cabinets with the usual white shaker doors and drawers, and bring the sizzle with new quartz counters.

The quartz slab was ten feet long, and we needed about 10′ 3″ to reach the floor and be a true waterfall. I made the decision to take a chance. As long as everything else was perfect, I figured no one would NOT buy the house just because it was a little short:

But there was more to it than just being short – it was also two levels, with drywall on the left, and wood on the right.

But I knew an easy fix – have our guy Joe at Oceanside Drywall flatten it out:

All that was left was to finish it off with baseboard, and we’d be done. How hard is that?

There are baseboard guys – it’s what they do every day.

We thought that was who was sent to wrap this up, but when I arrived I found that the hackmaster came instead and rushed it. The buyer was coming to inspect the next day – so I had to get busy. I used some drywall mud to patch up the gaps and imperfections on the left side:

But drywall mud doesn’t stain well so I ran to get matching paint instead:

The right side was a disaster.

Not only was the quarter-round hacked together, but his saw nicked the floor too.

This isn’t what I do, normally, so it took me three hours to make it look acceptable!

If it wasn’t distracting to the eye, then the rest of the finished product should carry me:

It did!

Buyers want more than turnkey – they want to be impressed. They want to know that when their friends and family come to visit, they will be impressed too.

As a result, we go all out!

Where Is This Going?

It’s natural to wonder what is going to happen next.

Today’s hot employment report squashed any hope for lower rates this summer. Home sales are waning. The realtor cartel is a mess. Yet, more listings are hitting the market at all-time high prices without any regard for market conditions.

Home sellers don’t care – they just want their money.

Let’s reflect upon a case we had here at the end of 2022. We know that Carmel Valley has excellent schools and tend to draw the affluent family buyers, which is great for those who can afford $3,000,000+ now.

One of the first neighborhoods built in Pacific Highlands Ranch was a group of what is now considered smaller homes on tiny lots with zero lot lines.

After the mortgage rates took off in 2Q22, the sellers there waited as long as they could – but finally started dumping on price to get out. These are in the order of closing dates – check the first four sales:

When we listed 6065 African Holly, I was determined to stop the bleeding. What good would it do to to list for $1.7 or $1.8 when the last three sales were $1,600,000?

It worked. We got a bidding war started and a cash buyer who was picking up rentals in the neighborhood was the winner, paying $1,660,000.

What’s happened since?

The next four sales sold for about the same, roughly, with three of the four homes taking weeks to find a buyer even though this is PHR entry-level and these are walking distance to Trader’s Joe which has to account for something.

The most interesting fact?

Not one home has listed for sale in the last 12 months!

NO ONE IS MOVING!

The same thing is happening in La Costa Valley, a master-planned community of 1,075 houses built mostly in the late 1990s – and stock full of empty-nesters loaded with equity. In 2024, there have been 12 LCV listings so far, out of 1,075!

I think we could see two things coming down the pike:

  1. As the market slows, fewer people want to sell because they get the idea that the market is ‘bad’.
  2. Estate sales make up most of the inventory.

It would mean that inventory in the newer neighborhoods (less than 30 years old) will dry up like a peach seed, and most of the action will be selling the fixers in the older neighborhoods.

More Inventory Affecting Sales

Earlier this year, I speculated that the market could endure – and probably snap up – additional inventory, as compared to last year. The 2023 inventory was like the Mohave Desert!

It seemed that 10% to 15% more would be easily digested, and maybe even +20% or +25%.

Bill’s new stats out today suggest how much, is too much:

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