Buyers on the lower end can rejoice that there is more inventory – there are 50% more houses for sale under $1,200,000 then there were in early May.
Of course, all that means is that more buyers are holding back, and sellers aren’t adjusting fast enough:
The UNDER-$1,200,000 Market:
| Date |
NSDCC Active Listings |
Avg. LP/sf |
DOM |
Avg SF |
| April 29 |
201 |
$384/sf |
36 |
2,599sf |
| May 5 |
195 |
$381/sf |
36 |
2,633sf |
| May 9 |
207 |
$387/sf |
35 |
2,624sf |
| May 18 |
241 |
$397/sf |
33 |
2,566sf |
| May 23 |
236 |
$397/sf |
34 |
2,529sf |
| May 30 |
230 |
$391/sf |
35 |
2,591sf |
| June 5 |
229 |
$393/sf |
35 |
2,577sf |
| June 11 |
239 |
$390/sf |
34 |
2,569sf |
| June 17 |
246 |
$389/sf |
36 |
2,577sf |
| June 24 |
255 |
$397/sf |
36 |
2,535sf |
| July 1 |
244 |
$401/sf |
38 |
2,526sf |
| July 8 |
256 |
$398/sf |
38 |
2,530sf |
| July 15 |
269 |
$403/sf |
38 |
2,486sf |
| July 22 |
258 |
$401/sf |
39 |
2,442sf |
| July 29 |
262 |
$386/sf |
39 |
2,493sf |
| Aug 5 |
287 |
$393/sf |
38 |
2,495sf |
| Aug 12 |
300 |
$391/sf |
40 |
2,521sf |
The OVER-$1,200,000 Market:
| Date |
NSDCC Active Listings |
Avg. LP/sf |
DOM |
Avg SF |
| April 29 |
620 |
$806/sf |
94 |
5,183sf |
| May 5 |
606 |
$806/sf |
93 |
5,223sf |
| May 9 |
628 |
$808/sf |
93 |
5,150sf |
| May 18 |
653 |
$807/sf |
92 |
5,161sf |
| May 23 |
661 |
$814/sf |
92 |
5,141sf |
| May 30 |
659 |
$805/sf |
95 |
5,222sf |
| June 5 |
663 |
$794/sf |
96 |
5,185sf |
| June 11 |
672 |
$779/sf |
96 |
5,163sf |
| June 17 |
661 |
$787/sf |
99 |
5,164sf |
| June 24 |
679 |
$791/sf |
98 |
5,097sf |
| July 1 |
705 |
$785/sf |
94 |
5,084sf |
| July 8 |
702 |
$779/sf |
95 |
5,100sf |
| July 15 |
736 |
$776/sf |
94 |
5,038sf |
| July 22 |
748 |
$782/sf |
96 |
5,043sf |
| July 29 |
736 |
$782/sf |
100 |
5,057sf |
| Aug 5 |
754 |
$765/sf |
100 |
5,024sf |
| Aug 12 |
750 |
$767/sf |
102 |
5,032sf |
On the higher end, even though average list pricing has come down 5% since early May, greed and ego can’t get out of their own way – inventory is +21%.
New-listing counts are bouncing around, but the new pendings have been fairly steady – realtors have to eat:
Weekly NSDCC New Listings and New Pendings
| Week |
New Listings |
New Pendings |
| May 30 |
70 |
84 |
| June 5 |
87 |
64 |
| June 11 |
77 |
69 |
| June 17 |
73 |
66 |
| June 24 |
100 |
69 |
| July 1 |
86 |
64 |
| July 8 |
81 |
53 |
| July 15 |
106 |
54 |
| July 22 |
105 |
89 |
| July 29 |
71 |
74 |
| Aug 5 |
105 |
64 |
| Aug 5 |
77 |
61 |
JtR,
What numbers do you look for to determine a “healthy” or “balanced” market if it exists?
I’m also thinking the averages aren’t exactly the right metric for the +$1.2MM. If I use the average $/sf and the average house size I get an average of $3,859,544. To me that’s a very different market than even the less than $2MM which is also sky high but more representative of places like Del Mar & Solana Beach.
The real consequence of the jump in mortgage rates from Spring to now is that the late comers are asking for the same prices they saw their neighbors get earlier in the Spring when the rates were lower and the frenzy was in full swing.
I sincerely doubt people are waving appraisal contingencies now like they were in the Spring.
I wish I was in the 1+ million market, but I will hazard a guess and say that ego and greed is more prevalent in the tract housing of the 1+ million range (i.e. Carmel Valley, Carlsbad)
It doesn’t seem like anything close to the coast is having a hard time selling in the 1+ million range (Solana Beach, Cardiff, Leucadia)
What numbers do you look for to determine a “healthy” or “balanced” market if it exists?
Avtive-to-pending ratio always seemed balanced at 2:1, and today as of 9:45am the NSDCC count is 1,038/473 or 2.19:1 which is pretty close.
But your point is why we have to drill down further. With the higher-end market having 70% of the listings means we really can’t use general stats.
It’s why I split these into OVER and UNDER, but it doesn’t tell us a whole lot more. But following the changes in the trends makes them worth watching.
Plus other variables complicate it too – I’m including contingents in the 473 above, which we didn’t have back in the day, and the value-range pricing screws up the stats also (what is their real list price?)
Further drilling:
NSDCC Detached UNDER $900,000:
180 Actives/186 Pendingscontingents = 0.97:1.0 ratio (HOT!)
NSDCC Detached OVER $2,000,000:
485 Actives/65 Pendingscontingents = 7.46:1.0 ratio (NOT!)
A RSF agent mentioned that the frenzy never came to the Ranch this year.
Indeed, there has been a relatively modest improvement in average sold prices between 2012 and the last 6 months in all the higher-end areas:
La Jolla: +9%
DM/SB: +7%
RSF: +7%
Carlsbad: +16%
CV: +13%
Encinitas: +12%
It’s a standoff between buyers & sellers. Sellers want the same price as their neighbors did during the frenzy. Buyers are sick for paying $1M+ for regular no frills tract homes on the street.
It seems like everything needs to get to an extreme to make people move. I believe the sellers who price the properties to sell sooner than later are better off. Everyone knows now that the only way the interest rates are going is up
Thanks JtR.
What’s it look like between the $900K & $2MM? That’s more in line with the coastal market that’s not on a bluff.
Do you have the Number of Listings Cancelled? It would be useful to see the net change each week (New Listings – New Pendings – Cancelled = Net change).
The most interesting thing that stands out to me is the following:
10 Year Teasury Note:
1.63% on May 5, 2013 when inventory was around 195 for homes under $1,200,000.00
2.72% on August 13, 2013 when inventory is now around 300 for homes under $1,200,000.00
Rising interest rates and rising inventories look to be going in lock step based on these variables.
Sellers look to be a little slow in adjusting to the new reality of rising interest rates.