Today, there are 160 pending listings between La Jolla and Carlsbad, and 36 sales have closed this month so far – and currently, there are 470 active listings with a median list price of $2,997,000.
It means that the July sales will be under 200 for the second month in a row (June’s total is currently at 189 sales). Because the 2021 frenzy was so insane, the comparisons to last year will be shocking.
We had 357 sales last June, and 312 sales in July, 2021, which means the monthly sales totals this summer are going to look like year-over-year declines of 35% to 50% – yikes!
To the casual observers, it will look like the market is in shambles.
But is it?
The quick and easy assumption is that the active listings are overpriced, and yes, price will fix them. But it is also due to them being inferior – and at this stage, buyers don’t want to compromise, or at least not much.
During the frenzy, buyers were so desperate to just win a house that they paid about the same for the fixers as they did for the creampuffs. Not any more, and the price gap between them is back. But sellers of the inferior homes haven’t gotten the memo yet – and those homes are languishing on the market.
I’ll make my case with one that just happened yesterday. The model-match directly across the street from this new listing had just closed for $2,900,000 a month ago. But this house had a decked-out backyard that cost hundreds of thousands of dollars. They priced it 9% higher at $3,175,000:
They received six offers and according to the listing agent, it sold for “way over list”.
I know that I’m cherry-picking and there will always be a market for the creampuffs with a fancy backyard that have a good comp across the street. The market might wind down to just these types of sales, but there are buyers willing to pay retail, or retail-plus for them!
What can sellers do who don’t have a fancy backyard?
When pricing your home, omit the sales with fancy backyards.
When pricing your home, don’t use the sales price of comps that were radically bid up (use the list prices).
When pricing your home, compare to the active (unsold) listings and start lower than them.
To rank America’s Top States for Business in 2022, CNBC scored all 50 states on 88 metrics in 10 broad categories of competitiveness. Each category is weighted based on how frequently states use them as a selling point in economic development marketing materials. That way, our study ranks the states based on the attributes they use to sell themselves.
We developed our criteria and metrics in consultation with a diverse array of business and policy experts, and the states. Our study is not an opinion survey. We use data from a variety of sources to measure the states’ performance. Under our methodology, states can earn a maximum of 2,500 points. The states with the most are America’s Top States for Business.
Michael Jackson was only six months older than me, and I think there is a sort of kinship between those who are about the same age. So when we had a chance to see the play ‘MJ’ on Broadway when we were visiting Kayla, I jumped at the chance.
Not only was it phenomenal, but I thought that the guy playing Michael was better at being Michael than Michael was – and that’s saying something! He won the Tony for best actor:
Buyer: I’ve had about 40 calls since 7am this morning for mortgages.
I didn’t take any of them and most of them are leaving VMs and texts saying they got notified by Experian that my credit was pulled for mortgage purposes and they want to help. Not sure why and how Experian is sharing my information. I am sure there is a fineprint somewhere.
Lender: It’s not uncommon these days unfortunately. It’s called a trigger lead. Very annoying thing the credit bureaus do.
Here is some info:
What is a trigger lead? When a borrower applies for a mortgage, the three credit bureaus take that information and sell it as a “mortgage lead” to any lender that is willing to pay for it. The “mortgage lead” has the borrower’s name, contact information and the date they applied for credit on it.
Why would someone buy a trigger lead? A trigger lead is a really good indicator that someone is in the process of refinancing or a purchasing a home. A lot of lenders feel this a great opportunity to try to steal the transaction for themselves.
Why is it so bad right now? With interest rates going up and refinance activity going down, most lender’s pipelines have begun to disappear. In response to that a lot of them are buying trigger leads right now.
Why doesn’t your bank do something about this? Unfortunately we do not have ability to block or restrict the credit bureaus from selling this information. This activity is not illegal, it’s legal for the credit bureaus to sell it as they are the owners of the data.
What can we do to help borrowers avoid this? They can remove their information from being sold as a trigger lead. They can do this over the phone or through a website provided by the credit bureaus. Web link here: www.optoutprescreen.com or phone here: 888–567–8688. This must be done before they apply for credit and can take up to 5 business days to process so this may not work for everyone.
Sellers are confident about their pricing, and refuse to budge much – and buyers are being very patient.
There were 55 new NSDCC listings in the last week, and NONE of them have been marked pending yet!
Pricing in the higher-end market looks troubling, but it’s mostly due to the additional homes for sale.
On January 31st, the 3rd quartile was $9,922,500, and today it’s $5,500,000 which is a 45% drop! There were 102 active listings priced over $4,000,000 back then, and now it’s grown to 164, which is a 60% increase. More sellers are pushing into the higher ranges!
Fox Point Farms is a new “Agrihood” community spanning approximately 21.5-acre in the City of Encinitas. The site will provide 250 new residential units, including a mix of 53 for-sale cottages, carriage units, and townhomes, as well as 197 apartments. Of these units, 39 are set aside as “very low” (at or below 50 percent of area median income) affordable residential units.
The site features a number of unique and engaging amenities, including edible landscaping, community gardens, trails, a bocce court, social spaces, a community library, and a community recreation center. The project will also include a shared public/private agricultural amenity area including a farm-to-table restaurant, farm stand, event lawns, discovery garden, greenhouse and community work area, and an outdoor education patio. The northern portion of the project site will remain in agricultural use, serving as an organic farm operation.
Here is a good sampling of the NSDCC pricing decisions made in May (mortgage rates started going up the first of April). The days-on-market are on the left.
Days on Market: All 28 found their buyer quickly – only one took as long as ten days!
Paid Over List: 21 of 28 paid over the list price (75%).
Of the 21 who paid over the list price, the average amount paid over list was $185,761. Literally 11 out of 21 paid at least $200,000 over list – and these 28 sales are the mid-range group!
The number of detached-home listings between La Jolla and Carlsbad has plummeted this year, compared to previous years. We saw the June counts (included again here), but how does the overall count look for the first six months of 2022?
NSDCC Listings, First Half of the Year
Year
# of Listing, Jan-Jun
Median LP
Median SP
# of June Listings
2016
2,996
$1,425,000
$1,154,000
513
2017
2,703
$1,425,000
$1,225,050
416
2018
2,698
$1,499,000
$1,325,0002
476
2019
2,708
$1,550,000
$1,300,000
435
2020
2,303
$1,675,000
$1,400,000
448
2021
2,166
$1,900,000
$1,850,101
386
2022
1,682
$2,400,000
$2,428,000
326
We used to have around 2,700 listings in the first half of the year, and a sizeable gap between the median list price, and the median sales price.
Now we have 1/3 fewer listings, and a median sales price that is $577,899 higher than last year (+31%) – and it’s also HIGHER than the median list price!
As more potential sellers get the (wrong) impression that now isn’t a good time to sell, don’t be surprised if listing counts drop further. And people think prices are going to go down? Why? There isn’t much to buy now, and it’s going to get worse – the trend is fewer people want to sell.
Sales are toast – we are probably going to have months this year where the NSDCC sales count gets down around 100 per month, which has never happened before. But it’s because fewer people want to move, and those that do list their home for sale will want to hold out on price – or just wait until ‘the market improves’.
