No Inventory Surge…Yet

Yesterday reader Mozart mentioned how the inventory number had spiked over at the Department of Numbers:

http://www.deptofnumbers.com/asking-prices/california/san-diego/

DoN stats

But the 36% increase is a mistake – today, there are 6,575 detached and attached active listings on the MLS.  They had the same type of occurance last year too, and the following week it dropped back down to the correct number.

The pricing is messed up too – have you seen any sellers backing down?  Me neither, and certainly not in the beginning of April – they will wear out the selling season before thinking about a lower price.

Here are the recent weekly counts of new listings of detached and attached homes around NSDCC:

Week
Det. & Att. New Listings
Avg. LP/sf
Feb 18-24
146
$486/sf
Feb25-Mar3
163
$536/sf
Mar 4-10
163
$512/sf
Mar 11-17
144
$517/sf
Mar 18-24
162
$483/sf
Mar 25-31
128
$496/sf
Apr 1-7
166
$512/sf

No flooding here – a fairly steady stream though.

Last year the increase of new listings between the months of March and April was only 6% – it probably won’t be much different this year. Without new meat, the sales momentum won’t be as predictable.

Warren Zevon

A guy who left us too soon – from wiki:

http://en.wikipedia.org/wiki/Warren_Zevon

By September 1975, Zevon had returned to Los Angeles, where he roomed with then-unknown Stevie Nicks and Lindsey Buckingham. There, he collaborated with Jackson Browne, who in 1976 produced and promoted Zevon’s self-titled major-label debut. Contributors to this album included Nicks, Buckingham, Mick Fleetwood, John McVie, members of the Eagles, Carl Wilson, Linda Ronstadt, and Bonnie Raitt. Ronstadt elected to record many of his songs, including “Hasten Down the Wind”, “Carmelita”, “Poor Poor Pitiful Me”, and “Mohammed’s Radio”. Zevon’s first tour in 1977 included guest appearances in the middle of Jackson Browne concerts, one of which is documented on a widely circulated bootleg recording of a Dutch radio program under the title The Offender meets the Pretender.

Though a much darker and more ironic songwriter than Browne and other leading figures of the era’s L.A.-based singer-songwriter movement, Zevon shared with his 1970s L.A. peers a grounding in earlier folk and country influences and a commitment to a writerly style of songcraft with roots in the work of artists like Bob Dylan and Joni Mitchell.

In 1978, Zevon released Excitable Boy (produced by Jackson Browne and guitarist Waddy Wachtel) to critical acclaim and popular success. The title tune (about a juvenile sociopath’s murderous prom night) name-checked “Little Susie”, the heroine of former employers the Everly Brothers’ tune “Wake Up Little Susie”, while songs such as “Roland the Headless Thompson Gunner” and “Lawyers, Guns and Money” used deadpan humor to wed geopolitical subtexts to hard-boiled narratives. Tracks from this album received heavy FM airplay and the single release “Werewolves of London”, which featured Mick Fleetwood and John McVie, was a relatively lighthearted version of Zevon’s signature macabre outlook and a Top 30 success.

Critic Dave Marsh, in The Rolling Stone Record Guide (1979), called Zevon “one of the toughest rockers ever to come out of Southern California”. Rolling Stone called the album one of the most significant releases of the 1970s and placed him alongside Neil Young, Jackson Browne, and Bruce Springsteen as one of the four most important new artists to emerge in the decade.

San Diego Sales & Prices

Here is the March sales activity reported in a fairly unbiased manner.  But the realtors blamed year-over-year drop on winter?

From KPBS:

http://www.kpbs.org/news/2014/apr/08/san-diego-real-estate-market-shows-improvement/

soldReal estate in San Diego regained some ground in March, with the median price of a single-family home rising 4.3 percent to $490,000, according to the San Diego Association of Realtors.

In a report issued Monday, the local real estate group said the price of a house sold in March was 4.3 percent higher than in February and up 13.4 percent compared with March 2013.

Sales were up 32.5 percent, with nearly 1,800 homes sold last month. But compared with sales in March 2013, sales were down 15.4 percent, according to the association.

Condominium and townhouse prices were up 1.7 percent month-to-month, with the median price at $305,000. Compared with last March, prices were up 7 percent. Sales were up 14.7 percent, with 827 units sold in March.

Compared to last year, sales of condominiums and townhomes were down 17.3 percent.

Year-to-date figures reflect a wintertime slowdown in the market, according to the association.

In the first quarter of the year, nearly 4,500 single-family homes sold, down 18.7 percent from same quarter in 2013. Quarter-to-quarter condominium and townhome sales — 2,300 —  were down 9.6 percent.

Lower-Level Frenzy

The media will soon be touting the year-over-year drop in home sales.

Around here it is mostly due to the lack of decent homes for sale – and if you want a decent home for a decent price, good luck.

But the glass-half-full view notes how remarkable sales have been, given the dramatic rise in pricing:

First Qtr.
NSDCC Det. #Sales
Avg. $/sf
SD Co Det. #Sales
Avg. $/sf
1Q11
553
$372/sf
4,541
$235/sf
1Q12
557
$362/sf
5,077
$226/sf
1Q13
672
$396/sf
5,535
$258/sf
1Q14
577
$504/sf
4,503
$313/sf

Buyers are determined and resilient in their quest to purchase a home, which is causing prices to maintain upward momentum today, 18 months after the frenzy started:

SDCo list and sold ppsf april 2014

In the past, escalating prices have caused a surge of new listings.  But today sellers are happier to stay put, regardless of price.

The low inventory is disguising the drop in sales – it still feels frenzy-like because buyers out-number the sellers.  The blue line is the number of homes for sale today in San Diego County, and the red line is the 90-day moving count of homes sold.  It’s not a common metric, but it shows the sales trend well:

SDCo #listings-sales

With sales dropping, prices would normally stall right about now.

But this is the new normal.

Buyers don’t see many houses for sale, and as a result, they still feel the frenzy vibe and desperation.  With inventory so low, future sellers are going to be more optimistic about hitting the jackpot, and price accordingly (too high).

The graph above shows how sales took off in April, even though inventory wasn’t keeping up.  We are in the prime selling season now – this is when buyers want to buy a house!

Any new listing with a decent price should get gobbled up in the next 30-60 days.  But many, if not most, sellers will come out too high, and risk missing the opportunity – and potentially face a OPT glut by summer.

It’s a fancy dance between inventory and sales, but if we do get a surge of reasonably-priced listings, the sales momentum should take off again.

Stay tuned!

Why You Need Good Help

Price anchoringToday’s real estate market already suffers from having fewer sales to use when evaluating other properties.  We’ve seen how some buyers, particularly those using Big Cash are paying prices that are hard to justify using traditional methods.  As a result, the comps are more suspicious than ever as an accurate reflection of real value.

Now this article mentions the anchoring concept, and how the list price influences an evaluation.  Hat tip to reader JB who sent this in:

http://www.marketwatch.com/story/how-car-dealers-get-you-to-spend-more-2014-04-02?siteid=yhoof2

An excerpt:

Real-estate agents sometimes have outsized confidence in their ability to “price” homes that are put on the market, or to assess whether a price is too high or too low. In his great book “The Two-Headed Quarter: How to see through deceptive numbers,” Loyola professor Joseph Ganem described a study which proved that.

Real-estate agents were asked to appraise a home based on a 10-page packet of information where the only variance was the list price. When it was $119,000, the average appraisal was $114,000. When the list price was $149,000, the average appraisal was $128,700. In other words, simply by changing the first price suggestion made agents raise their perceived value of a home by $35,000.

Worse yet, the agents were blissfully unaware of the influence the list price had on their appraisal.

“Only 10 percent of the agents mentioned listing price as one of their top three considerations,” Ganem writes. “It is interesting that anchoring effects influence experts without their being aware of, or at the very least, willing to admit the influence.”

Get good help!

Inventory Watch

field dayThe NSDCC detached-home sales count for March is currently at 215, which is 28% fewer sales than in March, 2013, and the lowest March count since 2009. The San Diego County count is 20% below last year, and if those stats are similar around the country, look for the media to have a field day speculating about the causes.

There would be more concern if the market was flush with listings that weren’t selling, but that isn’t the case. A few more listings are coming on, but this is the prime selling season and there still is very low selection.

North SD County’s Coastal Region (La Jolla-to-Carlsbad)

The UNDER-$800,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
DOM
Avg SF
November 25
95
$376/sf
47
1,988sf
December 2
79
$371/sf
50
2,047sf
December 9
72
$383/sf
43
1,954sf
December 16
81
$378/sf
42
1,948sf
December 23
77
$374/sf
49
1,937sf
December 30
76
$373/sf
51
1,950sf
January 6
74
$370/sf
49
1,995sf
January 13
71
$381/sf
44
1,921sf
January 20
72
$384/sf
41
1,877sf
January 27
75
$399/sf
40
1,891sf
February 3
78
$409/sf
41
1,876sf
February 10
82
$395/sf
38
1,927sf
February 17
85
$387/sf
35
1,929sf
February 24
90
$383/sf
37
2,008sf
March 3
82
$397/sf
39
1,942sf
March 10
88
$377/sf
37
2,008sf
March 17
89
$366/sf
34
2,038sf
March 24
79
$369/sf
34
2,031sf
March 31
78
$367/sf
39
2,069sf
April 7
87
$373/sf
32
2,054sf

The $800,000 – $1,400,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
DOM
Avg SF
November 25
245
$448/sf
61
2,856sf
December 2
239
$448/sf
64
2,851sf
December 9
226
$461/sf
65
2,812sf
December 16
211
$464/sf
66
2,794sf
December 23
197
$453/sf
73
2,813sf
December 30
173
$450/sf
78
2,821sf
January 6
170
$470/sf
65
2,757sf
January 13
168
$463/sf
59
2,764sf
January 20
174
$444/sf
51
2,882sf
January 27
166
$435/sf
52
2,902sf
February 3
165
$441/sf
53
2,857sf
February 10
175
$443/sf
51
2,852sf
February 17
180
$447/sf
50
2,803sf
February 24
188
$438/sf
44
2,846sf
March 3
202
$421/sf
44
2,936sf
March 10
215
$431/sf
41
2,854sf
March 17
223
$421/sf
42
2,918sf
March 24
217
$419/sf
42
2,941sf
March 31
223
$425/sf
44
2,887sf
April 7
224
$428/sf
44
2,881sf

(more…)

Saturday Open House Report

orangeThere were enough open houses in the area that the streets of Encinitas were crawling with people today.  Thankfully, my listing was the cheapest!

I appreciate the big turnout for Padres-tickets contest too, and for 47 of the 48 guesses being higher than list price – thanks for your faith and confidence!

Here’s my open-house report, check back tomorrow:

Pin It on Pinterest