Logically, it would make sense to expect that higher rates AND prices would raise the home-selling intensity to a whole new level.
Buyers will expect prices to re-trace somewhat, and will probably think, “Can’t we just go back to 2015 prices?” And sellers will think, “Not Me!”
First, let’s reflect on the 2016 stats – how did we do?
NSDCC Detached-Homes, Jan-Nov
| Year | ||||
| 2012 | ||||
| 2013 | ||||
| 2014 | ||||
| 2015 | ||||
| 2016 |
We have been striking a fine balance between listings and sales.
Because we only had a few more listings in 2017, the buyers didn’t flinch. Instead, they kept buying!
Every year we have a whole new set of buyers and sellers, yet we expect them to all behave the same as in the previous year. Will it happen again? Yes. Why?
Because that’s the other part of the fine balance. If you are a buyer, either you buck up and pay these prices, or you don’t buy. If you are a seller, you want/need to spruce up your house, get a good agent, and put an attractive price on it, or you will struggle to sell. Buyers will be pickier than ever!
There will be a few on each side that get lucky and beat the odds, but for the most part, the market conditions are going to remain the same until we run out of rich people, or something catastrophic happens.
I’m not any better at guessing the actual stats than the next guy, but here goes.
JtR Predictions
On January 7, 2016, mortgage rates were 3.98%, and I guessed were would see 2016 sales drop 5%. For the Jan-Nov period, it has been a virtual dead heat – 2775 sales this year vs. 2771 in 2015. But I might get lucky if our rapidly rising mortgage rates killed a bunch of deals this month, and the YoY sales dip under 2015 by a couple of points.
We have eight business days left, plus late-reporters, so I’ll say no luck for me and predict that the final total of 2016 will match the 3,011 sales from 2015.
| Year | ||
| 2012 | ||
| 2013 | ||
| 2014 | ||
| 2015 | ||
| 2016 |
The current momentum is so strong that I’m going to say the Trump mojo will cause sales to increase enough in the first half of the year that next year’s sales will top those in 2016.
My guess is for 3,100 sales in 2017, and median sales price of $1,200,000. A paltry 3% gain for each category, which is about as safe as it gets!
There will be winners and losers – here are examples:
Yep pretty vanilla prediction there, you need to work on your click bait skills.
Since you are tapped into Zillow, have a Q. I received market report emails from Zillow today regarding my local zip codes. They all say the Zillow “Market Health” is very good, 8+ out of 10 for all. But they also all say that the “Market Temperature” is chilly to cold and indicate a buyers market. While that may become the case, it seems clearly wrong. Obviously they just use algorithms to come up with these. I am curious what metric(s) in their algorithm makes the computer think the market temperature is cold? Is it possible that their program can see through the “delist and relist” scam and therefore its program comes up with a much higher days on market than running MLS analytics? Or perhaps the shoot for the moon listings that go nowhere or sell after several price drops skews the results? My Q really is: is there some data point buried in there that is being overlooked? Just wondering if you had any thoughts.
LOL – they didn’t get me too far last year!
I’ve never heard any explanation from Zillow about their hot/cold markets, so thankfully I found this thing called google which I rely on quite often.
Son of a gun – they did explain it, back in 2013 when it started.
It is comparing our town to other towns! Not too surprised to hear that the $2,000,000+ markets might appear to be cooler, statistically, to cheaper areas. But what good is that though? Who cares?
Zillow is close to data overload. Buyers want crisp, clean, and easy data, and sellers don’t want anything except what backs their pre-conceived beliefs.
Don’t sell with blah, blah, when you can sell with blah! (Floyd Wickman)
P.S. San Diego is the fourth hottest metro in the USA!
http://www.zillow.com/research/zillow-market-health-index-5925/
What’s google? I thought it was some kind of driverless car company or something.
And yes, I want my free internet based property appraisals to be spot-on accurate in all respects, as long as they are the highest one I can find.
Not thrilled with the 4th ‘hottest’ The harder they come, the harder they fall.
Merry xmas.
Not thrilled with the 4th ‘hottest’ The harder they come, the harder they fall.
Let’s note that the 3 markets hotter than San Diego are San Jose, San Francisco, and Los Angeles. All are higher priced than us, and as the market conditions start to balance (or deteriorate, depending on who’s looking at them), sellers in all three areas can cash out and move here to retire.
San Diego is such a nice fit for those folks because we’re not too far away, houses are cheaper, and the weather is better!
I do have another set of predictions coming – I’m going to ramp up the click bait!!
On the NorCal to SD notion you are right, I’m one of them. It’s like they are giving them away down here – seriously, apples to apples is 1/2 price or more. Plop Carmel Valley into San Mateo County and your head would spin. I’ve got a line of friends up there waiting for the time they can bring their property tax base with them…. I wonder (out loud) if there is a duration on San Diego’s participation in prop 90. If only there was some way to search the internet for such information. Oh well, we may never know.
I didn’t find any expiration in the BOE site:
http://www.boe.ca.gov/proptaxes/pdf/lta06010.pdf
But SD County could decide to withdraw – only a third of the counties participate. But Dan has been cooking lately – the current year’s income is $4.5 billion, up from $3.8 billion just four years ago. The re-assessing of the old tax basis upon sale, thanks to Prop 13, is the best thing that ever happened to him!