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“Housing Market is Exploding”

So what’s your take on the strength of the housing market now and how the election could change it?

BARBARA CORCORAN: I don’t think the election is going to have much to do with the housing market. It’s like a horse that’s run out of the bar– the barn at about 100 miles an hour, and there’s no stopping it. Of course, it’s on an even market. The suburban areas, the wealthier vacation areas, the country areas are all skyrocketing with the shortage of listings and prices going up far beyond what’s reported. Because you have to realize, when price increases are reported by any organization, it’s based on closings, not on deals that were just made, which are always made three months in advance.

So I think the housing market is exploding well beyond what’s being reported, and I think that’s going to come out in the next couple of months. But so far as how the election will affect it, it’s amazing. It’s almost like the strength is beyond the election that nobody’s paying attention.

For every two buyers, there’s one house to be had. So there’s an extreme slanted market with a shortage of inventory. The housing market is so hot, I almost feel like I should apologize for it. It’s not even my market, OK?

But the housing market is so strong right now, we’re not going to make up for this lost time for a lot of months to be coming up, and prices are going to price out all the starter homes, of course, as time goes on. But every other market is going to be going like hotcakes. And you can count on it for the next three to six months easily. There’s too much pent up demand. There’s too short a supply, and it’s going to take a while to even that score out.

Link to Yahoo Article

October Sales & Pricing, Preliminary

Here’s the first look at this month’s sales:

NSDCC October Sales & Pricing

Year
# of Sales
Avg $$/sf
Median SP
2012
189
$382/sf
$765,000
2013
276
$494/sf
$961,750
2014
263
$463/sf
$965,000
2015
234
$473/sf
$1,055,000
2016
283
$523/sf
$1,075,000
2017
262
$533/sf
$1,194,250
2018
241
$569/sf
$1,380,000
2019
247
$605/sf
$1,400,000
2020
304
$660/sf
$1,633,500

We are already 7% higher than any previous month, and we still have three days to go plus late-reporters. We should easily hit 350 sales! Pricing is skyrocketing too.

2021 Moving Survey Results 2

There was additional distribution of my moving survey after the previous report last week.

Of the 2,872 visitors who have looked at the survey, 130 (or about 5%), at least answered a question, which is typical.  Here are the final results:

Q1. I liked that 28% of the respondents live outside of San Diego County. Thanks for playing!

Q2. Most people aren’t planning to move (70.34%). But of those who are planning to move, MORE THAN ONE-THIRD ARE LEAVING CALIFORNIA!

Q4. The traditional April-Sept time frame was preferred by 60% of those planning to move. But 23% of those who are moving next year will jump right on it in the first quarter.

Q5. The pandemic didn’t cause 92% to move, mostly because Covid-19 is temporary, and moving is permanent. People might think about moving because of Covid-19, but the pandemic won’t drive the truck up to the house.

Q6. The answer of ‘Getting My Price’ bumped up nicely from its last-place finish previously.  Going Through My Stuff is still a big concern, but Finding Next Home is #1, and rightfully so.

Here are some of the anonymous comments left – thank you for the warm thoughts!

Jim, so sorry I’m late to the survey. I appreciated the results you’ve already shared. I own two properties in OC, (reside in one, rent one) and have been a home owner for 15+ years. I have read your blog for 10+ years, but only check it weekly, rather than daily. I enjoy your video tours, thoughts on home layout and thoughts on how to help increase the value of one’s home. I like learning about the SD area and market through your blog. FYI, the biggest thing keeping my family in CA is our three school-aged children and an older parent who is nearby and will eventually need help. It’s hard to uproot. My own parents, lifelong Californians, retired and left for Arizona two years ago and are very happy. Last year, my husband’s job offered to relocated us to Utah. We seriously considered leaving, but eventually declined and he found another job internally at the same company so that we could stay where we are. When we thought of the pros and cons, we would very much miss the CA weather and strong ties to our community. We are thankful to live in a proudly red city in OC. We are not happy with the direction CA as a state is headed, but will stay for the sake of our kids and the sunshine. Thanks for your blog. I enjoy your expertise and also your levity!

People may be moving because of covid but what I have found more of is people wanting to move because they are trying to get away from far left liberal policies in Cali.

We love Jim & Donna who helped us buy our first home together.

Jim Klinge is an awesome realtor. We love his videos and he’s spot on when looking at local real estate trends. Jim is great to work with and we have already recommended him to our friends.

Best lock pick ever.

You and Donna are the best. Stay healthy so if we decide to sell decades from now we can depend on you!

San Diego Case-Shiller Index, August

What a difference compared to the second half of 2019:

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.40
+1.1%
+1.2%
Apr
257.63
+0.5%
+0.8%
May
260.08
+1.0%
+1.1%
June
261.90
+0.7%
+1.3%
July
263.66
+0.7%
+2.0%
Aug
263.23
-0.2%
+2.3%
Sep
263.26
0%
+2.8%
Oct
262.56
-0.2%
+2.7%
Nov
263.18
+0.2%
+3.9%
Dec
263.51
+0.1%
+4.7%
Jan ’20
264.04
+0.2%
+5.1%
Feb
265.34
+0.5%
+4.6%
Mar
269.63
+1.6%
+5.2%
Apr
272.48
+1.1%
+5.8%
May
273.51
+0.4%
+5.2%
June
274.91
+0.5%
+5.0%
July
278.00
+1.1%
+5.4%
Aug
283.06
+1.8%
+7.6%

Last month I said, “Will the September & October indices hit 2.0%? Likely!”

From cnbc.com:

“A trend of accelerating increases in the National Composite Index began in August 2019 but was interrupted in May and June, as Covid-related restrictions produced modestly-decelerating price gains,” said Craig Lazzara, managing director and global head of Index Investment Strategy at S&P Dow Jones Indices.

“The last time that the National Composite matched August’s 5.7% growth rate was 25 months ago, in July 2018. If future reports continue in this vein, we may soon be able to conclude that the Covid-related deceleration is behind us. ”

Phoenix, Seattle and San Diego reported the highest annual gains among the 19 cities (excluding Detroit) in August. Phoenix led the way with a 9.9% price increase, followed by Seattle with an 8.5% increase and San Diego with a 7.6% increase.

Chicago, New York City and San Francisco saw the smallest annual home price gains in August.

S&P Case-Shiller is a repeat sales index, running on a three-month average; it measures the sale prices of similar homes over time. Other home price indexes, like the measure from the National Association of Realtors, show much higher price gains because they calculate the median price of all homes sold during the month.

Since there is currently much more sales activity on the higher end of the market, where there is more supply available, that is skewing the median price much higher. The Realtors reported a 15% annual price gain for September.

Prices are being fueled not just by strong demand but by record low mortgage rates. Rates set several new records over the summer and continued to do so in September as well. Low mortgage rates give buyers more purchasing power, allowing sellers to raise prices.

https://www.cnbc.com/2020/10/27/home-prices-rise-at-.html

What a Glut Looks Like

In the graph above, the conditions were glutty through July, but now I think we can call it a full-blown panic in SF County. They only had 1,000 homes for sale in May, and their fourth-quarter history already looks very strange. You can bet that buyers are slamming on the brakes!

Any glut-like conditions are easy to identify – as soon as active listings start stacking up, then either prices are too high or we’re running out of buyers.

Thankfully, our NSDCC graphs look the opposite of this one so we’re in good shape, for now.

Read full article here:

https://wolfstreet.com/2020/10/23/housing-market-goes-nuts-everyone-sees-it-but-it-cant-last/

Inventory Watch

We only had 65 new SFR listings between La Jolla and Carlsbad over the last seven days, which is an 18% drop from the previous week and the lowest count since the beginning of the pandemic. The demand is still hot – there were 85 new pendings – but if the inventory count does what it’s done in previous years, it will really fall off the next couple of months (see top graph).

But who knows – this is 2020!

We have three offers on our $1,195,000 listing in Vista, and should determine a winner today. The Big Question – do you take a full price cash offer that is contingent upon selling another home?  Given how hot the market is, it’s worth considering!

(more…)

Firehouse Flip

The guy who bought the Carlsbad firehouse for $803,333 in July, 2019 (there were 28 offers) has resold it for $1,275,000.  Here is the HGTV tour that starts as they roll up to the original listing (we know how HH works – he has already bought the house before filming and they are faking this tour):

Here is how it looked after his renovations:

https://www.compass.com/listing/3701-catalina-drive-carlsbad-ca-92010/596197768623134665/

Million-Dollar Sales Double

Ultra-low rates, record home equity, and societal needs/concerns make the perfect frenzy cocktail:

The pandemic is driving a major boom in the housing market that’s breaking all kinds of records and exposing a very uneven economic recovery between the haves and the have-nots.

The most dramatic increases are happening at the top end of the market — sales of homes costing $1 million and up have more than doubled since last year.

Millions of people are working from home while juggling their kids’ remote schooling. And many who can afford to are buying bigger houses.

Home sales in September were up more than 20% from a year ago, according to the National Association of Realtors. And median home prices hit a record $311,800. That’s about $40,000 more than just a year ago.

“It is great news for homeowners as they are seeing equity rise and rise,” says Lawrence Yun, the chief economist for the Realtors group. But he says prices are rising too fast. Generally, he says, economists like to see home prices climb in line with people’s wages. But in recent years, home prices have been rising much more quickly.

“It will eventually lead to a choking point where first-time buyers simply can not show up to the market,” Yun says. Already the percentage of first-time buyers is decreasing — they represent about 31% of the market. In a healthy market, they represent 35% to 40% of buyers, Yun says.

He worries that if the trend continues, the country will see a further “divergence in society where you have the haves, with homeownership gaining their equity, and those people who would like to become homeowners continually being frustrated, unable to reach that goal of owning a home.”

Read full article here:

https://www.npr.org/sections/coronavirus-live-updates/2020/10/22/926657942/housing-boom-sales-of-million-dollar-homes-double

Moving to North County

The signs are everywhere – the super-frenzy is building. I spoke with a friend in Phoenix yesterday who said the cheaper homes for sale there are flying off the market in 1-2 days:

While restrictions are driving people out California, newfound freedom is allowing others to come to San Diego and set roots.

San Marcos resident Logan Lidster is 99% sure his family will be moving to Texas despite living for years in San Diego.

With two kids planning to make the jump to the Lone Star State, Lidster said he had been considering an exit out of California for a while. But then COVID-19 advanced the possibility, and the Lidsters realized his family needed to become more self-sufficient.

“We’ve got a little bit of property here, but everything from regulations of what we can do with our homeowners’ association to what things we’re allowed to grow, there’s so much red tape,” Lidster explained. The pandemic brought things full circle for the Lidsters. In a time when things are difficult to access as is, he’s seen a need to grow his own crops and raise his own chickens in preparation for what might lie ahead.

And Lidster isn’t the only one turning his eye beyond the Golden State. Marie Bailey, a real estate agent in Texas, said her business has tripled since the pandemic hit, citing sales specifically tied to Californians on their way out.

The unstable job market in California brought on by the pandemic has played a part in the exodus, Bailey said.  “It has exacerbated the politics so lots of companies have been shut down,” Bailey said. “People are unhappy with how California is handling it.”

And in San Diego, a similar migration pattern is forming. Chris Hasvold, a broker at Coldwell Banker Village Properties, said he’s seeing people make the dash out of California for more affordable locations.

“We’re seeing people leaving in droves,” Hasvold said. “They’re going to the most common places…that I’m working with are Florida, Arizona, Idaho, Texas, and Tennessee.”

But Hasvold said he’s not just witnessing movement out of California. He’s also seeing people pour into Northern San Diego. The shift to remote working has given them the flexibility to live where they want, Hasvold said.

“They just are not restricted to a certain area now because they can work remotely and so that’s opened up a whole new world for people,” Hasvold explained.

Hasvold said some of his clients desire more of a return to nature where they can have more land and space.

https://www.nbcsandiego.com/news/local/restrictions-drive-californians-out-while-newfound-flexibility-draws-others-in/2429761/

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