Inventory Shortage To Get Worse?

by | Aug 24, 2022 | 2023, Jim's Take on the Market | 3 comments

Buyers who worry that their money doesn’t get them much these days will be bummed to hear that it’s probably not going to change.

The changes in the market forces are conspiring together to create less inventory, and a couple of big blows this year could really drive down the number of houses for sale in 2023.

Look at the trend so far:

Number of NSDCC detached-homes listed between January 1st and July 31st

Year
NSDCC Total Number of Listings
2015
3,386
2016
3,491
2017
3,141
2018
3,145
2019
3,177
2020
2,796
2021
2,533
2022
1,970

Why don’t people want to sell? Or why do those who might sell, talk themselves out of it so quickly?

  1. Having to pack everything up.
  2. Difficulty of finding a suitable replacement home.
  3. Paying six-figures in capital-gains tax.
  4. Have to leave town to make it worth it

Added to the list this year:

  • Getting a higher mortgage rate.
  • “Bad time to sell”

We know that over 80% of the existing mortgages have a rate that’s lower than what you can get today. Even if you could sell your home for top dollar, the thought of paying a higher interest rate is enough to stop potential sellers in their tracks.

But the last one is the killer.

Once sellers get the feeling that the market has cooled off and they might not be able to sell their home for their fantasy price, then it is WAY TOO EASY for them to suspend all thoughts of selling, and decide to wait until “the market gets better”.

Jay Powell thinks that raising rates will cause home prices to come down, but he didn’t talk to any homeowners about it.  It’s only going to continue the trend of fewer homes coming to market, and keep pricing high.

The 2023 Selling Season could be an all-time dud, just because there will be so few homes available.

Dead or Simmering Market?

by | Aug 23, 2022 | 2023, Jim's Take on the Market | 2 comments

Sales are down, and listings are sitting longer, so it would be easy to assume the market is dead.

Buyers want it to believe the market is dead so they don’t have to act. They are seeing everything though doom-colored glasses, which reinforces that it’s a great time to play it safe.

I’ve been saying that buyers are on vacation, and I said it a little stronger on the video last night.  But I’m sure there are some who think I’m just talking my book, and then gravitate back to the fence where it is really comfortable right now.

How can we tell if the market really is dead, or just taking a break?

The best way is to monitor the Zillow views and saves – and hope Zillow doesn’t manipulate those too.

Here is a cross-section of new listings this week:

According to the listing agent, they received TEN offers here. They accepted one, and has a backup too:

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On Sunday morning, this listing right around the corner from the one above hit the MLS, which probably caused the losers from Palenque to rush over for a look.

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This is in a neighborhood that is notorious for small yards (they are detached condos officially), but this yard looks decent – check the views and saves here after just 4 days on the market:

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Oh, yeah Jim but those are starter homes – what else do you have?

How about this new listing in Olde Carlsbad, which is not only a very eclectic area (i.e., lower comps nearby) but there is freeway noise and buses roll down Highland daily.  Yet the agent had so much action on this new listing that she raised the price – substantially:

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Carmel Valley is known for its newer homes, and no one would be surprised if those dodge the bullet.  But this was built in 1985!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

It’s not just the cheapies either:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Look at the number of Zillow views and saves!

Just based on those, there is a strong undercurrent of buyers who are monitoring the market closely – and with school starting, this has to be the worst week of the summer for distractions!  We may coast through the rest of 2022, but don’t be surprised if the frenzy conditions bounce back in 2023!

My listing – how can I have this much action and not be optimistic:

Inventory Watch

by | Aug 22, 2022 | Inventory | 0 comments

If there was a big surge of listings that weren’t selling, then we’d know for sure that the local market was in trouble. But we got so spoiled by the super-frenzy conditions last year where everything was selling right away that we forgot what it’s like during a non-frenzy.

Yep, when you compare to 2021, we have more active listings – in fact, there are 32% more $2,000,000+ listings today than there were at this time last year!  But relatively speaking, the 340 is a low number:

NSDCC Detached-Home Active Listings, Third Week of August:

Price Range
2018
2019
2020
2021
2022
0 – $1.5M
328
289
132
47
36
$1.5M – $2.0M
171
200
118
55
78
$2.0M+
562
543
430
257
340
Total # of Listings
1,061
1,032
710
359
454

The inventory is top-heavy with 75% of the actives priced over $2,000,000, but we’ve been very dependent upon the affluent buyers for a while now – the people who are less sensitive to mortgage-rate fluctuations.  The real problem is that you have never gotten so little for your money as you get today.  If anyone can find a way to move up in price to buy a better home, it’s the affluent buyers!

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The $0 – $1,500,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
9
$832/sf
35
36
Jan 10
9
$766/sf
28
29
Jan 17
13
$773/sf
26
27
Jan 24
9
$818/sf
15
29
Jan 31
14
$752/sf
14
31
Feb 7
13
$774/sf
12
32
Feb 14
11
$826/sf
12
35
Feb 21
7
$889/sf
17
38
Feb 28
12
$888/sf
17
33
Mar 7
9
$1,017/sf
21
33
Mar 14
14
$847/sf
18
31
Mar 21
8
$912/sf
26
36
Mar 28
10
$914/sf
25
28
Apr 4
10
$782/sf
33
34
Apr 11
19
$733/sf
21
36
Apr 18
16
$795/sf
28
34
Apr 25
18
$891/sf
27
30
May 2
22
$822/sf
23
31
May 9
24
$887/sf
17
46
May 16
25
$783/sf
22
25
May 23
29
$782/sf
23
29
May 30
30
$782/sf
24
28
Jun 6
34
$763/sf
25
28
Jun 13
33
$802/sf
29
29
Jun 20
48
$774/sf
28
22
Jun 27
43
$755/sf
32
22
Jul 4
49
$757/sf
33
23
Jul 11
56
$757/sf
35
22
Jul 18
51
$741/sf
38
24
Jul 25
53
$755/sf
38
22
Aug 1
46
$736/sf
36
29
Aug 8
43
$746/sf
41
32
Aug 15
37
$775/sf
37
34
Aug 22
36
$766/sf
41
33

The $1,500,000 – $2,000,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
8
$842/sf
52
36
Jan 10
13
$751/sf
28
29
Jan 17
16
$736/sf
33
27
Jan 24
16
$801/sf
17
27
Jan 31
15
$696/sf
14
34
Feb 7
15
$765/sf
17
34
Feb 14
10
$726/sf
19
38
Feb 21
19
$715/sf
15
39
Feb 28
9
$660/sf
12
46
Mar 7
16
$789/sf
15
46
Mar 14
17
$837/sf
8
44
Mar 21
18
$867/sf
11
43
Mar 28
14
$838/sf
15
48
Apr 4
18
$762/sf
25
42
Apr 11
23
$774/sf
15
39
Apr 18
22
$792/sf
17
41
Apr 25
18
$810/sf
20
41
May 2
27
$809/sf
17
37
May 9
33
$837/sf
17
46
May 16
39
$793/sf
19
44
May 23
43
$793/sf
22
44
May 30
36
$843/sf
23
36
Jun 6
43
$817/sf
23
41
Jun 13
49
$845/sf
24
42
Jun 20
57
$817/sf
24
41
Jun 27
75
$807/sf
24
35
Jul 4
70
$827/sf
27
33
Jul 11
71
$812/sf
30
38
Jul 18
74
$793/sf
32
35
Jul 25
83
$787/sf
34
29
Aug 1
81
$780/sf
35
31
Aug 8
76
$796/sf
40
30
Aug 15
80
$789/sf
42
38
Aug 22
78
$801/sf
46
38

The $2,000,000 – $3,000,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
18
$1,080/sf
127
43
Jan 10
23
$1,038/sf
85
37
Jan 17
26
$1,044/sf
80
41
Jan 24
28
$1,015/sf
37
42
Jan 31
22
$949/sf
38
47
Feb 7
26
$919/sf
29
42
Feb 14
22
$997/sf
37
49
Feb 21
21
$966/sf
33
54
Feb 28
26
$905/sf
32
57
Mar 7
29
$922/sf
28
57
Mar 14
20
$852/sf
26
58
Mar 21
17
$928/sf
26
60
Mar 28
34
$927/sf
12
65
Apr 4
32
$927/sf
20
69
Apr 11
44
$910/sf
17
62
Apr 18
48
$997/sf
19
66
Apr 25
42
$1,092/sf
18
73
May 2
54
$995/sf
19
70
May 9
61
$910/sf
20
73
May 16
64
$977/sf
22
69
May 23
82
$953/sf
25
59
May 30
78
$951/sf
27
56
Jun 6
94
$963/sf
27
58
Jun 13
98
$961/sf
28
70
Jun 20
91
$935/sf
32
59
Jun 27
111
$894/sf
30
60
Jul 4
112
$910/sf
33
60
Jul 11
122
$912/sf
34
56
Jul 18
103
$893/sf
39
68
Jul 25
108
$883/sf
40
63
Aug 1
110
$887/sf
41
58
Aug 8
124
$941/sf
39
50
Aug 15
114
$945/sf
45
51
Aug 22
123
$948/sf
42
46

The $3,000,000 – $4,000,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
19
$1,230/sf
90
26
Jan 10
22
$1,210/sf
76
25
Jan 17
19
$1,207/sf
86
23
Jan 24
17
$1,129/sf
92
24
Jan 31
21
$1,172/sf
70
22
Feb 7
19
$1,169/sf
67
25
Feb 14
19
$1,234/sf
65
28
Feb 21
21
$1,279/sf
69
28
Feb 28
22
$1,214/sf
64
25
Mar 7
27
$1,295/sf
60
24
Mar 14
27
$1,201/sf
65
27
Mar 21
23
$1,282/sf
69
31
Mar 28
25
$1,253/sf
67
30
Apr 4
30
$1,199/sf
61
27
Apr 11
32
$1,174/sf
62
31
Apr 18
33
$1,216/sf
68
31
Apr 25
33
$1,219/sf
63
33
May 2
37
$1,164/sf
50
36
May 9
33
$1,132/sf
57
32
May 16
40
$1,119/sf
53
32
May 23
40
$1,135/sf
57
27
May 30
40
$1,178/sf
61
28
Jun 6
43
$1,224/sf
56
28
Jun 13
48
$1,184/sf
52
28
Jun 20
52
$1,117/sf
53
26
Jun 27
60
$1,120/sf
51
19
Jul 4
55
$1,127/sf
58
23
Jul 11
68
$1,140/sf
47
26
Jul 18
66
$1,206/sf
52
25
Jul 25
65
$1,200/sf
54
26
Aug 1
59
$1,191/sf
60
26
Aug 8
58
$1,209/sf
63
22
Aug 15
59
$1,166/sf
62
21
Aug 22
57
$1,163/sf
60
28

The $4,000,000+ Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
100
$1,884/sf
128
30
Jan 10
105
$1,864/sf
113
29
Jan 17
109
$1,763/sf
110
34
Jan 24
105
$2,130/sf
114
42
Jan 31
102
$2,114/sf
118
53
Feb 7
109
$2,000/sf
108
50
Feb 14
108
$2,005/sf
109
47
Feb 21
113
$2,008/sf
103
43
Feb 28
111
$1,991/sf
101
47
Mar 7
115
$1,904/sf
91
39
Mar 14
121
$1,893/sf
95
43
Mar 21
116
$1,905/sf
97
44
Mar 28
104
$1,966/sf
97
59
Apr 4
103
$1,929/sf
97
56
Apr 11
106
$1,906/sf
97
55
Apr 18
108
$1,874/sf
100
51
Apr 25
116
$1,829/sf
97
38
May 2
117
$1,781/sf
95
32
May 9
116
$1,831/sf
96
36
May 16
124
$1,854/sf
91
39
May 23
125
$1,855/sf
92
36
May 30
129
$1,706/sf
93
39
Jun 6
131
$1,740/sf
89
33
Jun 13
132
$1,793/sf
86
38
Jun 20
148
$1,772/sf
84
35
Jun 27
153
$1,779/sf
87
29
Jul 4
155
$1,777/sf
82
25
Jul 11
164
$1,759/sf
85
26
Jul 18
170
$1,740/sf
86
26
Jul 25
178
$1,701/sf
84
27
Aug 1
180
$1,696/sf
85
28
Aug 8
173
$1,715/sf
91
24
Aug 15
168
$1,746/sf
89
32
Aug 22
160
$1,718/sf
92
29

NSDCC Weekly New Listings and New Pendings

Week
New Listings
New Pendings
Total Actives
Total Pendings
Jan 3, 2022
17
14
152
164
Jan 10
39
18
167
142
Jan 17
34
29
179
145
Jan 24
41
40
173
157
Jan 31
43
40
173
182
Feb 7
43
38
179
179
Feb 14
44
49
168
193
Feb 21
51
38
180
197
Feb 28
39
39
179
205
Mar 7
54
37
191
195
Mar 14
48
51
195
196
Mar 21
39
46
178
207
Mar 28
53
50
185
224
Apr 4
46
40
190
220
Apr 11
61
39
221
213
Apr 18
41
46
224
212
Apr 25
50
43
224
205
May 2
76
37
256
196
May 9
59
46
262
207
May 16
78
48
286
200
May 23
61
42
312
192
May 30
54
44
307
183
Jun 6
70
31
338
183
Jun 13
60
41
354
202
Jun 20
71
25
388
177
Jun 27
73
26
433
159
Jul 4
55
39
432
158
Jul 11
55
24
471
161
Jul 18
49
35
459
168
Jul 25
60
20
480
158
Aug 1
55
35
473
161
Aug 8
40
32
466
151
Aug 15
51
32
451
168
Aug 22
43
29
445
166

Del Mar Mesa New

by | Aug 21, 2022 | Builders, Carmel Valley | 5 comments

For new homes, it’s mostly just infill projects now in the prime areas so even the big boys are looking for smaller projects. It looks like Toll picked this up for $12 million last October, and they are going to build 4,765sf to 6,036sf houses that are the same or similar to what they built at Palomar in PHR.

Yesterday, they sent emails saying prices will start at $3,500,000 for the 25 houses, which means they should get into the $4-millions pretty quick. Here’s what their biggest model in PHR looked like just four years ago, which coincidentally is up for resale, priced at $5,995,000:



https://www.tollbrothers.com/luxury-homes-for-sale/California/Del-Mar-Mesa-Estates

Prediction on SD Pricing

by | Aug 20, 2022 | Forecasts, Frenzy, Sales and Price Check | 4 comments

These guys are among the most negative in the business, so if they have San Diego County home prices changing –3.65% between now and the end of 2023, and then -2.9% by the end of 2024, then prices in the better areas will be positive.

The most likely to happen is that we’ll see a few wild sales at the extreme ends, and those will get the headlines.  The rest will be +/-5% of the comps.  Most will just fumble along – just like during the frenzy – with little or no quality data or advice.

https://fortune.com/2022/08/15/falling-home-prices-to-hit-these-housing-markets-in-2023-and-2024/

 

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