Last Friday I had my nine reasons why inventory is going to surge in 2025, and it’s going to start up in January just like it did this year. It wasn’t a bad thing in 2024 because NSDCC sales have increased +6% year-over-year as the demand picked up some of the extra supply.
But as we saw in August, the demand has its limits, so any surge in supply in 2025 needs to be muted, and hopefully we’ll end up with about the same number of listings as we had in 2024 – and they just come earlier.
My nine categories are full of potential home sellers, and here’s #10 – covid buyers:
Younger Americans who bought homes during the COVID-19 pandemic could account for a surprisingly large share of home sellers in the coming year, as boomers who have owned their homes for decades mostly refuse to sell, a new survey finds.
Among current homeowners, nearly 1 in 5 say they plan to sell their home next year, according to the results released on Wednesday by Bright MLS. Although people who purchased their home in the past five years accounted for just 24% of all homeowners, they made up 32% of those who plan to sell their home in 2025.
Homeowners in their 30s and 40s will be the most active group of sellers in 2025, with 27% of homeowners aged 30 to 39 and 28% of homeowners aged 40 to 49 indicating they expect to sell in the coming year. By comparison, just 10% of older homeowners plan to sell.
“Record-low mortgage rates during the pandemic were a huge incentive for individuals and families to buy a home. Many of these buyers also have been able to quickly accumulate significant equity in their homes as home prices have escalated,” says Lisa Sturtevant, Bright MLS chief economist.
In November, national median list prices were up 37% from the same month five years ago, according to Realtor.com® economic research data.
“This wealth gain has created financial security for this group of homeowners, and is also allowing them to be move-up buyers even in today’s relatively high interest rate environment,” says Sturtevant.
The Realtor.com 2025 Housing Forecast notes that the market is shifting from a strong seller’s market to one in which buyers and sellers have more balanced market power.
“As a result, sellers will need to price carefully to attract buyers, especially in markets where affordability is an issue,” says Realtor.com Chief Economist Danielle Hale.
Hale adds that while there’s potential for a favorable market for sellers, “the overall landscape will depend largely on how economic conditions, interest rates, and housing supply evolve over the first few months of the year.”
The survey found that of homeowners in their 30s and 40s who are planning to move, 30% have a mortgage with an interest rate below 4% and more than two-thirds have a rate below 5%.
Mortgage rates are currently averaging 6.69%, and the Realtor.com economic research team forecasts they will continue to average above 6% through the end of 2025.
It means that many families who plan to move will do so regardless of the higher rates. The survey found that the traditional reasons of family and career were the main impetus for moving among younger homeowners who plan to sell.
Among homeowners in their 30s who plan to sell, 37% said it would be for job reasons and 34% cited family reasons, including marriage, children, divorce, and being closer to family.
For homeowners in their 40s, the priorities were reversed, with family changes cited as the most common reason for moving, at 44%, and career changes, at 26%.
Only about 6% of homeowners aged 60-plus said they were planning to sell their home in 2025, according to the survey.
To demonstrate further how the momentum is building, let’s look at SE Carlsbad.
4th Quarter SFR Closed Sales Between $2,000,000 and $3,000,000 in the 92009:
2023: 9
2024: 23
The optimism coming off the election helped, because ALL of these went pending since November 5th:
Only one had to take a real haircut on price – so far, two sold for full price and one sold over list!
If four of the pendings close this month, it will mean that the 4Q24 sales were 3x more than last year!
True, those could have been the last buyers ever for the 92009. But doesn’t there have to be potential buyers who decided to wait-and-see what 2025 has in store? I think so, and around the 92009, there will be a strong set of recent comps to support the valuations!
It reminds me of the 4th quarter of 2012 which snuck up on us because the short sales and foreclosures had not cleared yet. The NSDCC sales in 4Q12 were 44% higher than in the previous fourth quarter, and the following year, 2013, was the hottest year of the decade.
There are 20% more active listings, and 21% more pendings than we had last December – a monthly trend here in the fourth quarter of 2024 as the demand is keeping up with the supply.
Compare it to August when there were 26% more homes for sale year-over-year, but 17% fewer pendings!
The momentum going into the new year is terrific – it’s going to feel like the frenzy is back!
The holiday season is truly my favorite time of year! I love spending extra time with family and friends, decorating my home, exchanging thoughtful gifts, and taking time to reflect on the past year while dreaming up plans for the future. These traditions fill me with nostalgia, hope, and love – the perfect way to close out the year!
In the spirit of celebrating the holidays and taking advantage of this magical time, here are some San Diego events to get you feeling festive!
December 14th:
Festive 5Ks: Choose between Del Mar’s Red Nose Run along the beautiful beaches or Pacific Beach’s Santa Run in full Santa swag! Oceanside Harbor Parade of Lights: Bring a blanket, some hot chocolate and pick a comfortable spot to watch this year’s celebration. Mission Bay Parade of Lights: Kick off this holiday tradition with SeaWorld’s fireworks and a holiday boat parade on the bay.
December 15th: Pancakes & Pajamas with Santa: Visit the Pendry in downtown for a festive buffet with Santa himself. San Diego Bay Parade of Lights: A time-honored holiday tradition, the annual parade promises to dazzle and entertain bayfront crowds.
December 27th: Holiday Bowl & Parade: The scenic, bayside streets of downtown come alive with the Port of San Diego Holiday Bowl Parade (did you know it’s America’s largest balloon parade?!), followed by Syracuse vs Washington State at Snapdragon Stadium.
For the past two years, I’ve kicked off January by writing down 100 goals I want to achieve for the year ahead. Throughout the year, I cross things off, and in December, I review what I’ve accomplished, what fell through the cracks, and what’s still within reach (I’ve got 4 books left to hit my reading goal of 12 this year – wish me luck!). I love this tradition because, even though I never complete all 100 goals, I always achieve more than I expect. It’s a great way to reflect and plan for the year ahead.
The first time I did this, one of my goals was to book a tour as a professional dancer. At the time, it felt like a long shot. But come August, I landed my dream job and was on a stadium tour with Karol G – still my biggest accomplishment to date!
Whether you believe in manifestation, a higher power, or just the power of a plan, I truly believe that writing down your goals puts them into motion. So amidst the holiday fun and local events this month, why not set aside some time to dream big and write down your next great achievements? You never know what might come true!
They are saying that in the expensive coastal markets there are fewer empty-nesters, but they base that opinion on the percentages? The San Diego metro of 3.3 million x 13% = 429,000 empty-nesters sounds significant to me!
Some have suggested that empty nest households – those aged 55 and older living with no children with at least two extra bedrooms and in place for at least a decade – could eventually flood the housing market with their homes and help make homes more affordable. However, data indicates that this demographic is unlikely to make a meaningful impact over the coming years, especially in the most expensive markets.
Nationwide, there were roughly 20.9 million of these empty nest households in 2022, up modestly from 20.2 million in 2017.
All else equal, in order for empty nest households to make a meaningful contribution to lowering house prices, their numbers must exceed the number of families that currently need their own housing and those that will want or need homes in the future. In addition, because relative affordability varies so widely across the country, this potential supply of homes would need to be concentrated in markets with the worst housing shortages to make a dent. Unfortunately, this future supply coming from empty-nest households doesn’t line up with the areas of greatest need on the map.
The number of empty nest households does exceed the number of families in need of housing: by 2.6 times.
There were 20.9 million empty nest households in 2022 compared to 8.1 million families living with non-relatives that were likely in need of their own unit, and that surplus has grown over time. From 2017 to 2022, the number of families doubling up — living with non-relatives — grew by 500,821. During that same period, the number of empty nest households increased by 703,892.
The problem: Most empty nest households can be found in already relatively more affordable markets. These are areas where housing is already more available, the rate of doubling up with non-relatives is much lower, and they’re located far from where the crush of current young workers choose to live.
A flood of currently owner-occupied homes hitting the market as their current owners pass away or otherwise vacate their homes will NOT solve housing affordability challenges, especially in high demand housing markets.
A silver tsunamiis likely to have a larger impact in regions like Pittsburgh and Cleveland. Younger residents have tended to leave these areas to pursue better job opportunities elsewhere, leaving older generations to make up a larger share of those who remain. Young workers choose to live near productive job centers and on the coasts, areas that have much lower populations of older retired individuals holding back housing supply in the first place.
Among the 50 largest metropolitan areas, Pittsburgh, New Orleans, Detroit, Buffalo, Cleveland were the markets with the largest gap between the potential housing supply from empty nest households and potential demand from younger residents. But these are already relatively more affordable markets with fewer home buying age workers to begin with.
In expensive coastal markets with strong job centers where home buying age workers choose to live — like Austin, Seattle and Denver — there are fewer empty nest households to begin with.
As a result, the impact of a future increase in supply coming from the existing housing stock owned by older individuals would likely have a smaller impact on affordability in expensive high demand coastal markets. Without the promise of remote work or investments that improve work prospects and raise the desirability of Midwest markets, it is unlikely that we will see a big shift in migration patterns towards markets full of empty nesters.
Rather, the fix for affordability challenges remains a strong supply expansion coming from newly built homes. Zillow research shows that housing shortages were the most severe in markets with more land use restrictions. In addition to promoting denser construction, removing barriers to homeownership that aren’t related to income — credit assistance programs, down payment assistance or help with closing costs, for example — would likely improve access to homeownership.
Some of the active home sellers aren’t detecting any reason to stop trying.
With 45 new listings in the last week, we’re back up to 401 NSDCC houses for sale – what off-season? If you haven’t cancelled your listing by now, you’re plowing through Christmas and into the new year hoping for some holiday magic!
Last week, I left Del Mar out of this chart by accident. Here it is again with the corrected, and less dramatic numbers but still the same trend – price compression on both ends is squeezing the middle where you can buy a larger home that needs work for about the same price as a smaller home in top condition:
Back in the 2008-2010 era the market was quite different.
I did a bunch of videos during the downturn, and ended up with 435 youtubes that had 1,000+ views!
These days, I’m lucky to get 100 views.
This was a typical example of videos I did around Carlsbad. The big 3,100sf model shown here was eventually sold for $770,000 in 2012, and now the zestimate is $2,000,000+.
According to this list, San Diego is only the #46 best city in the world – and they even have St. Louis and Houston ranked higher! You can do better – here’s the list (London is #1):
Nice improvement in mortgage rates recently. You can get into the low-6s again by paying a point or two!
In the last 90 days, there have been 433 sales between La Jolla and Carlsbad, and the median days-on-market was 26 days. More than half sold in less than a month, and it has been sneaky hot since election day!
With rates trending lower over the brief holiday season, buyers should be engaging right away in 2025.
