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Realistic Post-Frenzy Pricing

The 3,743sf active listing across the street has been listed for sale at $2,350,000 since June 10th – but still unsold. Next door to it was a 4,398sf sale that closed on June 21st for $2,385,000 (it was a rental and needed work). It was on the market for 28 days before they found their buyer.

We are at the end of summer and while my 4,000sf listing is spectacular, we didn’t want to risk joining the other 17 houses for sale between $2 million and $3 million in this zip code that have an average market time of 34 days – they are starting to stack up! This is my logical reasoning to predict a price that will work. I’d like to help you too – my phone is 858-997-3801.

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To demonstrate the quirkiness in the marketplace, there was also a guy who came by the open house said, “I’d buy this house if it weren’t for the power lines”:

They are at least a 1/4 mile away and beyond the houses in this photo. To me, they blend into the landscape, but if any power lines are a deal-killer or you’re just looking for any reason NOT to buy, then…..

La Costa Oaks Stunner – Pending!

Now that buyers are being more cautious, we’ve seen how important it is now for sellers to spruce up their home and list for an attractive price.  A third component is to not think that there are two in the bush that are going to offer hundreds of thousands over the list price – it’s already been priced in.

We received an offer on our new listing on Friday, and went ahead with open house to give any motivated buyers a chance to check it out.  If you’re motivated (i.e., willing to pay at least full price), you’ll come to the first open house.

Here’s what happened:

When your ship comes in, don’t be at the train station!

Village Park Testimonial

Thank you Natalie for correcting me on yesterday’s blog post – the second half of 2022 is well under way!  Sales won’t drop to zero over the next five months because people need to buy and sell, and hopefully all will be more diligent about the process and who they hire.

Here’s the story/ad-copy about our listing on Park Dale in Encinitas:

There haven’t been many Village Park condos on the market this year, so when our clients thought about selling theirs, they talked to a few agents to get quotes. One was $675,000!

So when they heard Jim say ‘mid-$800,000s’, it piqued their interest – why so much higher? Because we knew that a minor tune-up (cost of $15,000) would elevate the property into the preferred category of Move-In Ready and maximize the number of buyers.

We listed for $849,000, and sold it for $841,000 with a 21-day escrow!

https://www.compass.com/app/listing/1938-park-dale-lane-encinitas-ca-92024/1079135454154740505

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The seller did not know us previously – here’s what he said about the experience:

You performed pure magic in selling our Encinitas condo near list price as we are potentially on the verge of severe economic times.  Throughout the selling experience, we have appreciated your professionalism, considerable knowledge and experience in selling real property.  It was a smooth and largely stress-free experience.  We will certainly refer any friends to you who are considering selling their property.

Are you thinking of moving? We’d love to help you too!

The Transition

The second half of 2022 starts next week. Where do we go from here?

Things we can expect:

  1. Sales are dropping and will likely be lower for 1-3 years.
  2. Mortgage rates aren’t going back to 3%…..but they might hang around in the 4s.
  3. Until the capital-gains tax is drastically reduced, long-timers want to stay put.
  4. San Diego is a desirable destination for affluent downsizers.
  5. Our home prices look attractive to affluent downsizers.
  6. Leaving San Diego is less appealing, due to rising home prices elsewhere.
  7. A slower pace might encourage sales and keep buyers engaged.
  8. Rents can go up by 10% starting August 1st.
  9. The media, especially social media, is a negative influence.
  10. There is game-changing commotion within the industry.

Let’s tackle these and other topics as we get closer to 2023 – I’ve created a new blog-post category today conveniently entitled, ‘2023’ at the top of this page.

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The article below confirms that:

  1. San Diego is NOT in the Top 10 places that people want to leave,
  2. Half of the places people are leaving are more expensive than here, and
  3. We ARE in the Top 10 destinations of where people want to move:

https://www.cnbc.com/2022/07/24/redfin-homebuyers-want-to-leave-san-francisco-los-angeles-new-york.html

If you were an affluent downsizer looking at those ten choices, which would you select?  It also means that the North San Diego County coastal market will probably be dependent upon those buyers coming from more-expensive areas – and that those markets continue to hold up there.

We will find a way to survive the next six months, and by the 2023 Selling Season we should see a healthy increase in supply and demand.  The worst thing that will happen is that pricing might be lower, which buyers won’t mind.

Get Good Help!

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Another good day for rates – from midday Friday, July 29th:

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Combine those lower rates with the occasional motivated seller, and…..we’ll see where this ends up:

Mortgage Rates Didn’t Blow Up

The Fed did what they said they were going to do and raised their fed funds rate target by another 0.75%.

What happened to mortgage rates?  They went down!

Read the story here.

Yes the -0.01% isn’t much, but didn’t every casual observer think mortgage rates were going to rise again?  That we were heading for 6% or 7% or 8%?

Everyone is going to get used to mortgage rates in the 5s, and by springtime this will all settle down and we’ll get back to a relatively normal market again.

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Late afternoon add – rates improved a lot today:

La Costa Oaks

Check out our new listing in Davidson’s Starboard neighborhood of La Costa Oaks!

7535 Circulo Sequoia, Carlsbad

5 br/3.5 ba, 4,0000sf

YB: 2005

LP = $2,295,000

The original owner of this premier Plan 2 was the CFO of Davidson Communities, and added over $100,000 in custom upgrades you probably won’t find anywhere else. The smooth-finish mission-style wall texture throughout, a custom door and window in the third-car garage that face the courtyard, ‘rainforest’ marble counters in primary bath, plus one of the best easterly views in the tract!  The sleek white kitchen is adorned with Blue Pearl granite, stainless appliances, and walk-in pantry. En-suite bedroom downstairs too! Owned solar, central A/C, and 75-gallon water-heater. Between the backyard and courtyard, there is ample private outdoor space, plus you can hike or bike the miles of local preserve trails!

Encinitas schools too – wow! An extensive trail system in the 1,400-acre Rancho La Costa Preserve nearby enables hikers and mountain bikers to go for miles! Additionally, you will be a member of the Oaks Club which has activities like Movie Night, Poker Night, and the Annual BBQ!

The 33 panel Solar System produces 17,000MWh/year and powers two wall chargers for EVs. Four motorized sunshades were added (very effective), and recently replaced appliances include: Hot Water Heater, Microwave, Dishwasher, Kitchen and Laundry Faucets. Recessed lighting was added to ALL bedrooms, downstairs office, living room, kitchen/dining. Many of the wall switches were upgraded to vacancy sensors (or timers) and/or dimmers. Five-inch baseboards, window casings, and extensive crown molding. The upstairs ceiling fans were upgraded and built-in wall remotes added. All can lights have been switched to LEDs. Built-in surround sound in the Living Room, Family Room, Courtyard and Backyard, with built-in Air-Bus wall Amps that operate and control 3 zones. The 1/2 bath was recently remodeled, the garage floors were ungraded and storage cabinets added – holy cow!

Open house 12-3pm this weekend!






La Costa Oaks Stunner!

Check out our new listing in Davidson’s Starboard neighborhood of La Costa Oaks!

7535 Circulo Sequoia, Carlsbad

5 br/3.5 ba, 4,0000sf

YB: 2005

LP = $2,295,000

https://www.compass.com/app/listing/7535-circulo-sequoia-carlsbad-ca-92009/1100461029264524393

The original owner of this premier Plan 2 was the CFO of Davidson Communities, and added over $100,000 in custom upgrades you probably won’t find anywhere else. The smooth-finish mission-style wall texture throughout, a custom door and window in the third-car garage that face the courtyard, ‘rainforest’ marble counters in primary bath, plus one of the best easterly views in the tract!  The sleek white kitchen is adorned with Blue Pearl granite, stainless appliances, and walk-in pantry. En-suite bedroom downstairs too! Owned solar, central A/C, and 75-gallon water-heater. Between the backyard and courtyard, there is ample private outdoor space, plus you can hike or bike the miles of local preserve trails!

Encinitas schools too – wow! An extensive trail system in the 1,400-acre Rancho La Costa Preserve nearby enables hikers and mountain bikers to go for miles! Additionally, you will be a member of the Oaks Club which has activities like Movie Night, Poker Night, and the Annual BBQ!

The 33 panel Solar System produces 17,000MWh/year and powers two wall chargers for EVs. Four motorized sunshades were added (very effective), and recently replaced appliances include: Hot Water Heater, Microwave, Dishwasher, Kitchen and Laundry Faucets. Recessed lighting was added to ALL bedrooms, downstairs office, living room, kitchen/dining. Many of the wall switches were upgraded to vacancy sensors (or timers) and/or dimmers. Five-inch baseboards, window casings, and extensive crown molding. The upstairs ceiling fans were upgraded and built-in wall remotes added. All can lights have been switched to LEDs. Built-in surround sound in the Living Room, Family Room, Courtyard and Backyard, with built-in Air-Bus wall Amps that operate and control 3 zones. The 1/2 bath was recently remodeled, the garage floors were ungraded and storage cabinets added – holy cow!

Open house 12-3pm this weekend!






NSDCC July Listings

Last week, we saw here how the number of July sales has been plummeting, and with three days to go in the month, we are now at 119 NSDCC sales – which means we will end up with around 40% to 50% of last year’s July sales.

We also hear about how inventory is rapidly rising in other areas of the country.  How are we doing here?

Here are the recent monthly counts of NSDCC July listings:

2017: 412

2018: 433

2019: 445

2020: 468

2021: 349

2022: 215 so far.

The NSDCC sales really aren’t bad, considering how few new listings are coming to market.

There is a bit of a backlog of sellers hoping to get lucky, but they will likely cancel their listing in the next month or two and try again next year, rather than give it away.

Between now and February, there will probably be months when we don’t reach 100 NSDCC sales, and it will be because there won’t be enough homes available to sell!

San Diego Case-Shiller Index, May

Last month I guessed we’ll be 400+ at the end of the year, or about the same as February. If our local Case-Shiller Index drops 0.5% per month for the next seven readings, we’d still be in positive territory for 2022. We haven’t had a negative MoM reading since December, 2018.

San Diego Non-Seasonally-Adjusted CSI changes

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
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%
Jun
274.91
+0.5%
+5.0%
Jul
278.00
+1.1%
+5.4%
Aug
283.06
+1.8%
+7.6%
Sep
288.11
+1.8%
+9.4%
Oct
292.85
+1.6%
+11.5%
Nov
295.64
+1.0%
+12.3%
Dec
297.52
+0.6%
+13.0%
Jan ’21
301.72
+1.4%
+14.3%
Feb
310.62
+2.9%
+17.1%
Mar
320.81
+3.3%
+19.1%
Apr
331.47
+3.3%
+21.6%
May
341.05
+2.9%
+24.7%
Jun
349.78
+2.6%
+27.2%
Jul
355.33
+1.6%
+27.8%
Aug
357.11
+0.5%
+26.2%
Sep
359.88
+0.8%
+24.9%
Oct
363.80
+1.1%
+24.2%
Nov
367.62
+1.1%
+24.3%
Dec
374.48
+1.8%
+25.9%
Jan ’22
383.92
+2.5%
+27.2%
Feb
401.45
+4.6%
+29.2%
Mar
416.64
+3.8%
+29.9%
Apr
426.08
+2.3%
+28.5%
May
428.32
+0.5%
+25.6%

Housing data for May 2022 continued strong, as price gains decelerated slightly from very high levels,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite Index rose by 19.7% for the 12 months ended May, down from April’s 20.6% year-over-year gain. We see a similar pattern in the 10-City Composite (up 19.0% in May vs. 19.6% in April) and in the 20-City Composite (+20.5% vs. +21.2%). Despite this deceleration, growth rates are still extremely robust, with all three composites at or above the 98th percentile historically.

Inventory Watch


Here’s a look at the difference between the average price per square foot of the active and pending listings.

Of those priced under $3,000,000, it shows how the more-expensive superior properties are the ones going into escrow – and the inferior properties aren’t, even when priced less. Apparently, the gap between them isn’t big enough yet!

NSDCC Actives & Pendings Average List Price per SF

Price Range NSDCC Active Listings Avg. LP/sf NSDCC Pending Listings Avg. LP/sf
$0-$1.5M
53
$755/sf
22
$824/sf
$1.5M – $2.0M
83
$787/sf
29
$1,030/sf
$2.0M – $3.0M
108
$883/sf
63
$1,044/sf
$3.0M – $4.0M
65
$1,200/sf
26
$1,093/sf
$4.0M+
178
$1,701/sf
27
$1,528/sf

Click ‘more…’ below to see the trends of the average LP/sf in each price range.

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