Tim and Allison were nice enough to let me look around their 4 br + den/3.5 ba, 3,480sf home on a 15,087sf lot west of the I-5 freeway on Hymettus priced at $2,645,000:
In three out of the last four years, our highest median sales price was in May – which are the sales that were decided in March and April:
I think we can expect a similar fast start to the selling season next year as pent-up demand that went unsatisfied in 2019 rushes in and grabs something just to get it over with while rates are still in the threes.
The average cost-per-sf is more choppy due to being skewed by abnormal sales prices, but this graph demonstrates the same – look at the hot start we got in Feb-May in both of the last two years:
The Johnson House was built in 1962 through a collaboration of the The Johnson Family, Bob Jones the Architect/Friend, and builder Herb Turner. This home was originally designed to take full advantage of the scenery around the home through the use of floor to ceiling glass walls, sliding glass doors to bring the outside in, and several different outdoor spaces. Inside the home you will find many of the original features of the home, such as the exposed post and beam architecture.
3 br/2 ba, 2,130sf built on a 11,900sf lot in 1962
SP = $2,670,000
The most susceptible to home thievery are those properties that are paid off, and all you need is a crooked notary. This was more of a vengeful act by an ex-boyfriend that could be unwound a little easier because it had a mortgage and harder to re-sell. Hat tip to SM for sending!
Rohina Husseini had no idea someone could steal a house, but the first small clue that the home she owned for nearly a decade was no longer hers was a piece of junk mail that most of us ignore.
The Springfield, Virginia, mother said she initially tossed the mortgage refinancing offers that began arriving over the summer in the trash, but one detail bugged her: The letters were addressed to another woman. Curious, Husseini said she finally opened one.
“You bought a new house, congratulations,” read the letter addressed to Masooda Persia Hashimi.
“I was like, ‘Wow, this doesn’t seem right,’ ” Husseini said. “I don’t know this person at all. She never lived in my house even before [I moved in].”
In the frantic hours that followed, Husseini discovered the total stranger was now the legal owner of the brick Colonial worth about $525,000 that forms the center of her life with her husband and daughter.
Above you can see how our market compares to others, and below is the history of our ‘months of supply’. I said in the video yesterday that I thought the NSDCC sales in 2020 will be down 10% year-over-year mostly because there aren’t enough reasonably-priced homes to sell (or conversely, there aren’t enough buyers who can/will overpay for the multi-million-dollar homes).
I think you can see some of the price resistance lately as the orange line got into the 3s the last two years. We’ve seen how the velocity of the price increases has slowed considerably and when that happens, the natural next step for the market is fewer sales.
The orange line hit 3.0 in April of this year, when the previous April it was only 2.4, which means the inventory grew quicker at the start of the selling season. Expect the same in 2020, and when buyers see a rapidly growing inventory, it’s natural for them to be cautious and picky.
The album that I’ve plugged constantly all year called In the End, by the Cranberries, did get nominated for a Grammy for Best Rock Album! This isn’t it, but this four-song set demonstrates some of Dolores’ accented use of yodeling techniques and Irish keening. Her vocal range goes as low as B2 or as high as C6:
New-home sales probably will jump 11% to 750,000, according to Yun’s new forecast, which would be the highest reading since 2007.
Sales of existing homes likely will increase 3.7% to 5.56 million in 2020, the highest tally since 2017, Yun said.
“Some loosening in inventory will happen in 2020, and so we expect home sales to rise,” Yun said at NAR’s convention in San Francisco. “We’ll see an increase in inventory, but not any oversupply, so home prices should continue to move higher – our hope is in a much tamer fashion.”
Yun said he expects the median price of an existing home in the U.S. to be $270,400 next year, rising 4.3% from 2019. That would be a slower pace than the 4.9% annual gain in the median price he forecasts for 2019 and the 5.7% recorded for 2018.
The median price for a new home probably will be $313,500, down 4% from 2019, but that could stem from a shift toward smaller houses as builders try to meet demand from first-time buyers.
The average U.S. rate for a 30-year fixed mortgage probably will stay at 3.7% through the second quarter of 2020, Yun said. In 2020’s final two quarters, it likely will rise to 3.8%, he said.
Talk of a U.S.-China trade treaty has caused bond yields to rise in recent weeks, which could influence investors in mortgage securities to demand higher returns. But, Yun said he expects “sub-4” rates to continue through 2020.
These guys don’t release their local forecasts:
Home prices increased on an annual basis by 3.5 percent in October according to CoreLogic’s Home Price Index (HPI). The index rose 0.2 percent from the previous month.
The rate of increase in home prices appears to have stabilized for the moment. After trending higher for several years, the HPI hit a recent peak of 6.62 percent in April 2018, then decelerated to 3.53 percent by the following March. Since then it has moved back and forth over a narrow range, 3.3 to 3.6 percent.
Frank Nothaft, CoreLogic’s chief economist, said “Local home-price growth can deviate widely from the change in our U.S. index. While we saw prices up 3.5 percent nationally last year, home prices also declined in 22 metropolitan areas. Price softness occurred in some high-cost urban areas and in metros with weak employment growth during the past year.”
The CoreLogic HPI Forecast indicates that home prices will increase by 5.4 percent on a year-over-year basis from October 2019 to October 2020. They are expected to increase by 0.2 percent from October to November of this year. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables.
CoreLogic’s current Market Conditions Indicators (MCI) show 35 of the country’s 100 largest metropolitan areas based on housing stock were overvalued as of October. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income. Those markets where home values are 10 percent higher than those long-term levels are considered overvalued and those 10 percent below are considered undervalued. The MCI placed 27 areas in the undervalued category and 38 at value as of October.
During the second quarter of 2019, CoreLogic, together with RTi Research of Norwalk, Connecticut, surveyed Millennials about their housing sentiments. Three out of four told researchers they are confident they would qualify for a loan with their current financial situation. Still, despite this confidence, more than half of the cohort cites buying a home as a stressful experience, noting spending the majority of their savings as one of the leading stressors.
Last December, I had guessed NSDCC sales would drop by 20% this year, but that was back when mortgage rates were touching 5%. With rates back in the 3s for most of 2019, our sales exceeded my expectations – here are the NSDCC detached-home listings and sales for the first 11 months:
NSDCC Detached-Home Sales, Jan-Nov
We’re only 28 sales behind last year, and the late-reporters should pull us up real close to 2018.
This year’s sales AND pricing statistics are virtually identical to last year!
There should be more forecasts coming in the next week, but let’s consider what we have so far.
This in today from realtor.com – they have sales dropping in 2020, and prices flat:
Home sales will drop, the housing shortage could become the worst in U.S. history, and home values will shrink in some cities. That’s the 2020 forecast from realtor.com, which holds one of the largest databases of housing statistics available.
Sales of existing homes will fall 1.8% from 2019, according to the forecast. Home prices will flatten nationally, increasing just 0.8% annually, but prices will fall in a quarter of the 100 largest metropolitan markets, including Chicago, Dallas, Las Vegas, Miami, St. Louis, Detroit and San Francisco.
It is a seemingly contrary assessment, given the current strength of the economy and of homebuyer demand, but the dynamics of this housing market are unlike any other — the result of a housing crash unlike any other.
“Real estate fundamentals remain entangled in a lattice of continuing demand, tight supply and disciplined financial underwriting,” said George Ratiu, senior economist at realtor.com. “Accordingly, 2020 will prove to be the most challenging year for buyers, not because of what they can afford but rather what they can’t find.”
They also predict that the San Diego-Carlsbad metro sales will drop by 3.2%, and prices rise +0.2%.Link to Realtor.com Forecast
Here are other similar forecasts:California Association of Realtors NSDCAR (our local realtor assoc.) Forbes
From the enthusiastic Forbes article:
“Low interest rates and a shortage of starter homes will continue to push up prices,” DeFranco said. “This is especially the case for lower price points, since builders have tended to focus on more expensive, higher-profit houses and less on replenishing low inventories of entry-level homes.”
It seems the price growth may continue beyond 2020, too. Data from Arch MI shows the chance of home price declines at a mere 11% for the next two years. There are currently no states or metro markets projected to see prices declines in that period.