During our recent frenzied market conditions, getting a good price has taken a back seat to winning the bidding war.
Our SD Case-Shiller Index reflects it – the trend has been very positive:
But the most-recent Case-Shiller reading for San Diego was flat – the steady gains we’ve had every month of 2017 came to a abrupt halt. Just an anomoly?
Our 2017 market was similar to the Frenzy of 2013 – we called it ‘frenzy-lite’. After the frenzy topped off in September 2013, prices were flat for 4-5 months.
True, once we got into the spring selling season of 2014, prices resumed their ascent, and the SD Case-Shiller Index has risen 25% since!
What can we expect now?
A. Sellers and agents have heard that inventory is as low as ever, and can’t resist adding a little extra mustard to their list price, just in case.
B. Buyers have heard that the tax reform will cost them more, and possibly cause prices to go down. They will hesitate to pay more – especially for those homes that need work. After looking this long, it’s too easy to wait-and-see for a few more months.
C. The NSDCC inventory today is about 20% lower than it was last year…..and boy, is it picked over. The sales counts for January are going to be disappointing, unless we get a surge of new listings.
D. Pricing momentum is fueled by sales. Fewer sales = less pricing pressure because of the lack of comps.
Somebody has to go first. Who will be setting the market in early-2018?
- Frustrated buyers who just want to get a house.
- Affluent people who don’t own here yet.
- Those who sold recently and are re-investing their windfall.
- Those who have grandkids here.
These are the people who will keep paying whatever it takes – to them, a house is more valuable than +/- a few bucks. They’re not very price sensitive.
We’ll be fine by March/April – as long as there are decent houses for sale!