When will we know more about the 2021 frenzy?
We already know it’s going to be hot – look at the sales count for this month, plus we have 285 pendings:
NSDCC December Sales
||The Following January Sales
We knew that 2020 was going to be better than usual just by the 185 sales in January. Then the pandemic derailed us for a couple of months, but we gained it all back in the second half of the year and 2020 wound up with the most annual NSDCC sales ever.
The drop-off from December to January a year ago was only 19%, so if we see about the same decline next month, we’ll know that the frenzy is continuing. We have 283 December sales this morning, and once we add today’s sales plus the late-reporters we’ll probably be around 310 sales for this month(!!!).
If next month’s sales end up around 251 or higher (310-19%), then we’ll know that the frenzy is continuing.
The last frenzy happened in 2013, and you can see how it continued into early 2014 with only a 17% drop off. But by the end of 2014, the frenzy was over – expect the current frenzy to die down by the end of 2021.
My listing in La Costa Oaks closed escrow today!
I’m sure people are thinking….
“Did they just get caught up in the frenzy fever – or is Jim really that good”?
“Or does he just list ’em low just to stir up the frenzy?”
Let’s consider the two most recent sales, #3 and #6 on the list above.
Number 3 is a model-match to the subject property, but it did not have the additional bedroom and full bath down like we did. Our list price of $1,379,000 reflected a $54,000 premium for those.
Number 6 is the bigger floor plan and is RIGHT ACROSS THE STREET from our listing – and it closed for $1,410,000. We would have to expect that buyers would consider it strongly.
Two things to note about the subject property:
We have a downstairs master suite, which is an in-betweener. Seniors who want the traditional one-story think it’s too much house for them, and some families with little kids don’t like having them on a different floor. It’s probably why we had three offers, and the pending listing had eight offers.
Our backyard was a similar size as all the other comps and was tastefully landscaped, but it didn’t have any extras that would cause people to pay more. It also had a window that stood out:
All considered, our original list price of $1,379,000 looked like full retail when we started.
Nobody offers $91,000 over list just for the heck of it. Only two of comps closed substantially over list price, and just by $30,000 – which is way different than $91,000 over.
Admittedly, our market conditions have been hot and the inventory had dwindled down to there being virtually nothing similar for sale when we listed. But it was also December, so the holiday spirit or the raging pandemic could have cooled our chances too.
Someone must have created an ideal environment for buyers to pay the extra pop!
Two other notes:
Mr. Seller has read the blog since 2005 – my second seller this year who has been here since the beginning!
I first met the sellers on December 1st, and thirty days later they closed for $91,000 over list price. Is that the type of efficiency you’d like to have? Then contact me to sell your house!
Yesterday, Rob Dawg got started on his prediction on next year’s market:
Is this the official JtR 2021 prediction thread? If so I will post again but for now…
The huge demographic groundswell of house-ready millennials will drive prices much higher. The municipal imposition of covering costs plus will make new supply rare. Money printing drives investment into tangible assets.
Double digit appreciation in the recorded sales. Stagnation in the houses that don’t sell.
The demand is in place between millennials, downsizers, move-uppers, and out-of-towners to easily increase sales by 10% over this year’s record count.
The only hurdle is supply. Will there be enough people willing to sell?
Let’s break it down to a specific number, because we’ll see that achieving 10% more sales isn’t that far out of the question. How many more people need to sell? Here is the breakdown of 2020 listings and sales:
NSDCC 2020 Listings and Sales by Area (as of Dec 30th)
|Town or Area
||# of 2020 Listings
||# of 2020 Sales
|Del Mar/Solana Bch
Does my guess of +10% in all categories look and sound crazy?
It looks feasible that we could have an additional 319 sales next year, and get us to 3,500 total. If we pick up an extra 200 sales in Carlsbad, we only need another 119 in the pricier parts of town.
The median price going up to $1,626,900? We know that sellers will be tacking on their habitual extra mustard to their list prices, so $1.6-ish for the year is definitely within range.
Could we have 4,969 listings next year?
This is the big question, but it’s not some crazy number we’ve never seen before – in 2016 we had 5,182 listings and 3,104 sales when mortgage rates averaged 3.65%.
Having an extra 452 houses to sell means 1-2 more listings per day – I wouldn’t call that a flood – and it’s about the right number to whip buyers into a feeding frenzy without creating a glut.
Let’s try to predict what will happen in 2021!
For fun, our reader The Old Man suggested we look back at the predictions for 2020. I had guessed that sales would drop 10%, with the NSDCC median price rising 2% to 3% – here’s last year’s blog post:
The 2020 sales count is already 12% ABOVE last year’s sales, and is the highest in history – and we’re not done yet. Is it even possible to have MORE sales next year? Yes, but only if we get a surge of inventory.
This is where it gets interesting.
The number of 2020 listings was 5% below last year, and 7% below the 2018 count. If we just get back to last year’s numbers, it will feel like a surge, but it’s really just going back to normal. I think the extra 5% is in the bag, and because of the additional reasons for people to sell, we will have a surge that will blow way the recent numbers of listings.
MY 2021 PREDICTIONS:
- We will have 10% more NSDCC listings than we had in 2020.
- We will have 10% more sales.
- We will have a 10% increase in the NSDCC median sales price.
And that, my friends, is what a FULL-BLOWN FRENZY looks like.
I save photos during the year to feature here at the end, and I’m sure the Carlsbad Historical Society was a likely source for some of these – thank you S. Gutierrez!
Century 21 Pacific on Garnet & Cass in PB – where I started in the 1980s
I was sitting on floor duty when an older gentleman in shorts and flip-flops rolled up on his bike. He wanted to buy a condo in an oceanfront building for $100,000 or less (didn’t have to be on the front). Realtors used the MLS books back then, and I found a condo that could work – but couldn’t get a response from the listing office. A fellow agent figured out why – I was using an old book, and the listing was expired!
I called the sellers direct, and my manager Rex Downing and I went to their house with a written offer for $100,000. The sellers explained that the reason it had not sold was because the tenant wouldn’t show it, and my buyer – who was a retired broker – said no problem, he’ll see it once they leave. Once the tenants moved, my buyer took a look around and said “Sure, I’ll take it!”
I made a 6% commission on my first sale….and I was hooked!
The location of my 1st sale – at the pool, and right on the alley:
Bill has his annual forecast on home prices here:
Here is a snapshot of the forecasts:
(I was reading the previous chart wrong when I said that all were forecasting 7% to 10% appreciation. This is the accurate chart, with the old fuddy-duddies still lagging behind in the safety zone of 2% to 3%)
THE FRENZY IS COMING!
Because our market at the end of 2019 was so flat (December’s index was lower than July’s), the year-over-year gains are going to make for sexy double-digit headlines for the next couple of readings.
San Diego Non-Seasonally-Adjusted CSI changes:
U.S. home prices jumped in October by the most in more than six years as a pandemic-fueled buying rush drives the number of available properties for sale to record lows.
The biggest price gain was in Phoenix for the 17th straight month, where home prices rose 12.7% from a year ago. It was followed by Seattle with 11.7% and San Diego at 11.6%.
The demolition is underway – you can see right through the plant now!
The ‘stack should be coming down in the second quarter of 2021.
The homes on the hill in Spyglass and Heron Bay should benefit the most. In a softer market, potential buyers would complain about this view:
Here’s our NSDCC inventory for the last week of 2020!
Detached-Home Listings Between La Jolla and Carlsbad
|Last Week of Year
||Actives UNDER $2M
||Actives OVER $2M
We can live with 25% fewer listings in any market. To be 71% under last year’s inventory of homes for sale under $2,000,000 is astonishing!
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Bubbleinfo.com made the list of best real estate blogs in the country, as determined by Hooquest.com:
Thanks Brian for including us!
He is right – I don’t give much thought to SEO, which is probably why we had the lowest number of estimated monthly visits (by far) of the nine blogs included. He mentioned that the view-counter tends to be low, especially for hyperlocal sites.
Here’s our number of viewers this month from Google Analytics:
I’m glad you’re here – thanks for participating!