The lowest mortgage rates since early 2023 might keep buyers in the hunt a little longer than usual!
Will they accept the current pricing, or will they insist on grinding lower?
We can get a feel by examining those listings that have been marked pending this month.
The median days-on-market has been running around 14 days for the last few months, and for the 145 NSDCC closed sales in the last 30 days it was 17 days.
There have been 31 NSDCC listings marked pending this month, and their median DOM is 30 days.
There were 12 that went pending in 14 days or less, and six that took more than 60 days.
Did the sellers dump on price to cause a sale? Or were they patient and just waited their turn? Yes, mostly!
Here are those that took 15 days or longer to go pending in September:
It doesn’t look like ANY of those were dying to give it away! Only one lowered more than 5%.
Could they just be lucky? Yes, but luck is not a strategy.
We will come back in a month or two and see their eventual prices at closing!
The presidential election is less than 60 days away and even if one of the candidates is a clear winner at Tuesday’s debate, the fight will get nasty from here on out.
The distraction is likely to cause potential home buyers to want to wait-and-see. Thankfully, the hope of lower mortgage rates will keep more than just the bottom-feeders in the game – but the serious buyers will have to dig out a deal, because the sellers are being tough on price. Why? They have comps!
It was noted earlier how the market shifted in the middle of May.
In the last 90 days, there have been 531 closed sales between La Jolla and Carlsbad. Their stats:
Median LP: $2,399,000
Median SP: $2,370,000
Median Days on Market: 14
Any casual observer will quickly conclude that the market looks to be in fine shape.
Just the fact that there have been 531 sales sounds pretty good!
But it is easy to miss. What can we learn from the active (unsold) listings?
To derive some conclusions about the overall market conditions, let’s examine the 83 actives priced under $5,000,000 that have been on the market for more than 60 days. After they have been on the market for 2-3 weeks, the showings dwindle down to zero or close, so the market is talking if they’re listening and want to do something about it.
Of the 83, there are 26 who haven’t lowered their price, and three that have raised their price! That’s 35% whose motivation is so low that they’re going to wait until the right buyers come along.
For the most part, those who have lowered their price didn’t do much. We are now in the post-summer soft-and-getting-softer environment, so a meaningful price reduction needs to be 10% or more to get anyone’s attention. Here are samples of the current NSDCC active listings:
Those who have dumped more than 10% and are still unsold are asking themselves, ‘what’s it going to take?’. We just saw that 20% of last month’s sales were still closing OVER their list price – what gives?
The difference is the condition of the home.
The most amazing frenzy of all-time lasted for two years and spoiled everyone. Not only did homes not need to be fixed up much, but the pricing could be sloppy too and yet virtually every house was selling. There were times when 70% to 80% of the homes sold were closing over their list price!
We’ve had an astounding change of market conditions in a relatively short period of time to think that we went from that 70% to 80% to now 20% or less closing over list. It means those 20% are the really spectacular buys, and those seemingly premium listings now need to have aggressive pricing and/or be substantially improved recently to have a shot at getting their price.
Sellers need to be doing everything better. Do more improvements (especially on curb appeal), better staging, premium photography/video, more-attractive pricing, and hire the best agent you can find!
How do you know about the agent? They are talking about the shift, and what to do about it!
Do you want to move out of the rat race but stay close enough to San Diego to come back occasionally for doctor visits and other conveniences? How about Julian? There are several homes for sale under $1,000,000 and you can probably get a good feel for what to expect in one minute here:
The trend of over-list sales is already heading for the off-season. There were just 36 sales (20%) that closed ABOVE the list price last month. Of those 36, there were 16 that paid $100,000+ over the list price.
In contrast, there were 66 sales (37%) that sold for at least $100,000 UNDER the list price.
Man, those are treacherous market conditions! Do you offer $100,000 over or under?
We knew that Toll Bros are building 42 homes next to the Chevron gas station on La Costa Avenue and the freeway. They are doing the same treatment as the builder did at Halia – burying the contaminants instead of removing:
David Hill, a Batiquitos Lagoon Foundation board member who specializes in water quality management, criticized the developers for encapsulating rather than removing what he said were 6,300 tons of hazardous materials, including organochlorine pesticides, buried beneath the planned homes.
Another surprise is the planned hotel to be built next door:
Lance asked how the new realtor rules were affecting agents – here are responses from around the country that I clipped from two different email threads. Thanks Lance!
Building ADUs is one thing – being able to sell them separately would be a game-changer. To sell them, either the group needs to be condo-ized or the lot needs to be officially split. This new law says that if the governing entity doesn’t approve your plan within 60 days, the lot split is automatically approved. All it will take is for a surge of applications to bog down the approval process and there could be lot splits happening that shouldn’t be. It was also noted in the article’s comments that Toni’s spouse is a developer.
As the state Legislature wrapped up its regular session, lawmakers passed legislation authored by Sen. Toni Atkins of San Diego to close loopholes in Senate Bill 9 to encourage new housing in single-family neighborhoods.
The two-year-old SB 9 allows property owners to split their lots and build up to four units on a single-family parcel. It has faced pushback from many localities, and Atkins’ new Senate Bill 450 attempts to circumvent that.
“Since the passage of SB 9, we have seen local jurisdictions impose overly-burdensome requirements on homeowners seeking to construct more housing in their communities with SB 9 duplexes and lot splits,” said Atkins, who is president pro tempore emeritus of the state Senate.
“SB 450 will ensure that homeowners have the tools they need to build additional housing on their property, creating intergenerational wealth and providing access to more rental and ownership opportunities for Californians,” she said on Thursday.
The updates to the original law include:
Requiring local governments to either approve or deny an application for a new SB 9 unit or lot split within 60 days.
Requiring a local government to provide homeowners with a reason and remedies if their application is denied.
Deleting unnecessary and redundant language relating to the demolition of a property and maintaining key tenant protections.
Requiring consistency in local zoning, subdivision, and design standards to prevent governments from imposing overly burdensome requirements.
The legislation now to goes Gov. Gavin Newsom for his consideration.
