People keep saying that the inventory is low, but it means that there’s not a lot of active listings sitting around not selling (which will be the sign that the frenzy is over). Let’s determine whether the inventory has actually been lower than normal by comparing the number of sales to previous years:
The inventory must be fine, considering the number of 2021 sales in EVERY area were at least the median number of their five-year group, or higher, and the highlighted counts were the BEST of the five-year group. The total of 3,176 will probably increase in the coming months and end up #5 of all-time!
If you are a buyer and feel stymied by the lack of inventory, you may want to reconsider. It’s more likely that you’re not moving fast enough, you’re not doing it right, or you’re on the outside looking in.
Last year, home buyers viewed a median of eight homes before purchasing — the lowest number on record, according to research from the National Association of REALTORS®. That’s fewer than in 2009 and 2011, when housing inventory was more plentiful and buyers viewed a median of 12 homes before buying.
Among the median eight homes viewed by buyers, three were viewed online only with the help of virtual and video tours as well as virtual open houses, according to NAR data.
The new listings of 2022 are only trickling out, but we know that there can be spurts.
We’re seeing one underway in Encinitas Ranch, where five listings are hitting the market this week! The three Coming-Soons will all change to active listings on Saturday.
Buyers – there is hope!
Whenever there are two or more homes for sale in a neighborhood, there is one fact of life:
Either yours is selling mine, or mine is selling yours.
The chances of EVERY house being perfectly priced to reflect their condition AND compare favorably to all other choices is about the same as the Padres chances of winning the World Series. It’s possible every year, but come on.
There are times when NONE are perfectly priced, causing a stalemate and no sales.
The market is hot enough that at least one of these listings will compare more favorably than the rest, and will sell this weekend. With few or no other choices for sale currently, the ultra-hot frenzy conditions could pick up two of more of these listings.
Let’s see how many go pending in the next seven days!
Hat tip to Rob for the intro to Sevana, who describes her musical sound as “every sound but with a Jamaican filter. Like if a modern Anita Baker was Jamaican and was creating music for Jamaica.”
Fed policy is critically important to interest rates and January has marked a shift in the Fed policy outlook. In not so many words, the Fed sees itself hiking rates and decreasing its bond purchased more quickly than previously expected. It has conveyed this in various ways since the beginning of the month. Today’s policy announcement and press conference were just the latest iterations. They were also arguably the least equivocal.
Despite the relatively clear communication from the Fed in recent weeks, financial markets were increasingly laboring under the misapprehension that the Fed would take a softer tone in light of recent market drama. In other words, stocks have dropped significantly and rates spiked to 2 year highs as the Fed began its communication push this month, so perhaps they would “communicate” in a more market-friendly way today.
While it’s not uncommon for some market participants to hope for such things, it was never very likely in this case (one of the reasons I reiterated that the Fed is not tasked with babysitting the market in yesterday’s commentary). True to form, the Fed paid zero attention to recent market movement. In their view, rates are still low, and asset prices are elevated. If anything, they feel they need to hustle when it comes to hiking rates and decreasing bond purchases.
Bottom line, the market was a bit flat-footed heading into today’s Fed events. When the Fed stuck to the tightening script rather religiously, rates were forced to snap back to the reality they’d previously done a good job of understanding. Case in point, Treasury yields and mortgage rates are both very close to levels seen last Monday. Mortgage rates just happen to have edged slightly higher, thus earning the dubious distinction of “highest in 2 years.”
What will happen to our local real estate market now?
Speaking of misapprehension, the potential buyers who think home prices will come down will be disappointed. Not only will sellers ignore such frivolity, there will be enough motivated buyers who don’t care either. If they don’t mind paying $300,000 over list price, then they’re not going to care about a silly rate hike.
The coming Fed rate hike in March appears to be already priced in. Mortgage rates have gone up 1/2% this month, and the Fed will probably only raise their rate by 1/4% next month. We could see slightly better mortgage rates 60 days from now.
In the past, homebuyers have rushed to purchase before rates went up, and I think that will be the case this time too…..if there is only something to buy! We have had 150 NSDCC listings this month so far, which is dreadful. Last January we had 288 listings! Link to contest.
The median sales price went up 28% YoY, and the number of $2,000,000+ sales went up 66%!
The number of listings is deceiving because listing agents don’t have to refresh their listings any more. There were 580 expired/cancelled/withdrawn listings in 2021, and the number was 1,888 in 2019 – so the number of properties offered for sale each year were probably more similar than we thought.
Rob Hahn and I had a conversation about the state of buyer agency – which might only interest realtors, if anybody – but we also got into the idea of home auctions too:
We can see how MoM pricing started to slow at end of summer, only to have it pick up again in 4Q21:
San Diego Non-Seasonally-Adjusted CSI changes
Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
Jan ’20
264.04
+0.2%
+5.1%
Feb
265.34
+0.5%
+4.6%
Mar
269.63
+1.6%
+5.2%
Apr
272.48
+1.1%
+5.8%
May
273.51
+0.4%
+5.2%
Jun
274.91
+0.5%
+5.0%
Jul
278.00
+1.1%
+5.4%
Aug
283.06
+1.8%
+7.6%
Sep
288.11
+1.8%
+9.4%
Oct
292.85
+1.6%
+11.5%
Nov
295.64
+1.0%
+12.3%
Dec
297.52
+0.6%
+13.0%
Jan ’21
301.72
+1.4%
+14.3%
Feb
310.62
+2.9%
+17.1%
Mar
320.81
+3.3%
+19.1%
Apr
331.47
+3.3%
+21.6%
May
341.05
+2.9%
+24.7%
Jun
349.78
+2.6%
+27.2%
Jul
355.33
+1.6%
+27.8%
Aug
357.11
+0.5%
+26.2%
Sep
359.88
+0.8%
+24.9%
Oct
363.80
+1.1%
+24.2%
Nov
367.62
+1.1%
+24.3%
Mortgage rates didn’t move much in October and November, holding between 3% and 3.25% for the average on the popular 30-year fixed. While that was slightly higher than the early summer levels, it was still historically low and considerably lower than where rates are now. Rates are now about 75 basis points above year-ago levels. Low rates over the last two years have given buyers more purchasing power and consequently fueled today’s sky-high prices.
“We should soon begin to see the impact of increasing mortgage rates on home prices,” added Lazzara.
A recent report from Realtor.com found that 14 out of the top 50 largest U.S. cities experienced listing price declines over the prior year in December.
We had 1,782 new listings of houses and condos last month, in a county of 3.3 million people? And only 1,332 active listings (I believe that is the count at the end of the month). Look at Phoenix and Las Vegas for comparison, where they have 2x and 3x as many listings.
If we get a surge of inventory, it would just make the frenzy conditions even hotter!
New post (Is There An Inventory Shortage?) has been published on http://bubbleinfo.com - https://www.bubbleinfo.com/2022/01/28/is-there-an-inventory-shortage/
Gina Champion-Cain was a pillar of the local business community. She was also the architect of an almost $400 million Ponzi scheme https://www.bloomberg.com/news/features/2022-01-21/san-diego-s-400-million-ponzi-scheme-and-the-star-developer-behind-it via @BW
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
drp2drp
2020-12-30
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
AmberleePiercy
2020-10-21
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Cecilia Acevedo
2020-10-01
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
WAH08
2020-10-01
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
bethamunce
2019-09-26
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Ann Romanello
2019-04-06
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
zuser20160915180743456
2018-07-03
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
melanielogue
2018-04-30
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
shaunccornell
2018-03-28
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!
