Fun will return to home design in the form of bold prints, lively wallpaper and brightly hued walls. After a decade of Scandinavian modern design that dominated retail and social media feeds as Americans embraced neutrals, minimalism and clutter-free living, expect a shift toward playful, creative design. Look for color to be injected in unexpected ways in kitchen cabinetry and appliances, in lighting fixtures and on interior doors and moldings.
Sherwin-Williams agrees! Naval was their color of the year, and now Black Bean:
We’ve never had a soft landing before, but this is how I imagine one would look – mortgage rates drop just enough to have sales and pricing level out:
Year
# of Sales
Median SP
Avg. Cost-per-sf
Median DOM
2014
173
$985,000
$489/sf
34
2015
196
$1,173,750
$518/sf
38
2016
244
$1,235,908
$531/sf
28
2017
220
$1,208,487
$524/sf
27
2018
197
$1,300,000
$566/sf
29
2019
201
$1,345,000
$569/sf
28
We could have done better (see 2016), but it could have been much worse too. In 2014, when pricing was substantially lower, we only had 173 sales – which goes to show you that pricing isn’t the only component.
It looks like an early surge is likely in 2020, after that….who knows?
Last year, I guessed that our NSDCC sales would drop 20% due to high mortgage rates, and pricing would stay about the same. Rates dropped instead, and both sales and pricing stayed about the same as the previous year.
In 2020, I think we will see sales drop 10%, just because we’re overdue, and guessing that the NSDCC median sales price might go up 2% to 3%.
We’ve entered the World Of Concierge, where all participants – flippers, ibuyers, and realtors/brokerages – are rehabbing, improving, decorating, and staging most homes for sale. The movement has been building for years, and in 2020 we should see full implementation.
It takes some of the sting out of paying full retail, and buyers really don’t mind paying all the money if they get a turn-key home. Because sellers and agents will be going further to satisfy the retail buyer, we should see more of the softer landing that we saw this year that was caused by dropping rates.
Here’s what Rob Dawg said last year:
Here goes.
Median +4%. Late year inflation and demand for even negative cash flow rental properties. Volume down only 12%. Lots of deck chair shuffling will look like volume. Reported volume -10% from 2018.
$2m+ volume will increase. Lots of quality properties aging out and none of the kids or grandkids can afford to take possession out of the communal estate. Add to this the “too many houses” crowd both casual investors and the very rich who have made their money and ready to throw off the carrying costs.
Almost nothing sub $550k will show up on the sales sheets.
Interest rates will range between 4.4% (early, briefly) and eventually 5.6% (in Q4). Inflation and banking regulations conspire.
There may be a technical recession that will be over before it is confirmed. People will argue whether there was a recession.
Here is a metric we haven’t followed. Total dollar volume of sales will be flat to slightly down.
But what do I know?
We both thoughts rates would be a problem in 2019, but what do we know? It’s hard to believe rates could drop lower in 2020, but if they did get into the low-3s it would ignite the market. Those who have been wanting to move up or down but had a mortgage rate in the mid-3s or higher could now justify moving and getting a lower rate. If California residents pass the referendum to enable seniors to take their old tax basis with them when they buy up in price, it could also ignite sales (if you believe the California Association of Realtors).
What’s Your Guess? The closest guesser will get four tickets to a Padres game!
Mr. and Mrs. Dawg did join us for a Padres game this year (vs. the Red Sox).
It’s December 9th, which means it would be natural for most people to pack it in for the year (especially with a shorter holiday season). But in the last three weeks of 2018, we had 83 new listings!
There will be more houses to consider this month, and those sellers would have to be motivated to list in the middle of December. Keep an eye out!
We’ve seen that the bottom of the Carlsbad detached-home market has been around $800,000 all year. Can you get into something similar for less?
Here’s a tour of a 4 br/2.5 ba, 1,997sf twin home in the far-north end of Carlsbad built in 1987 and without any real improvements since. This closed for $620,000 in October:
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
Master Architect Lloyd Ruocco and world acclaimed Artist Joyce Cutler-Shaw collaborated with Wimmer & Yamada Landscape Architects to create a spectacular view centric indoor / outdoor masterpiece in 1966… Rarely do you find a home with exceptional character that translates so smoothly to a future time and place. Throw in a private, tranquil location, that is also super convenient, and you have a winning pallet. Now it’s your turn to pick up the legacy and bring it to new heights!
