Here we go again with the click bait on the front page of the local birdcage liner. They also used a photo of the most prime real estate in the county, insinuating that a slump is underway there?
Link here for the full article, and this is an excerpt:
San Diego luxury home sales are down by more than half as the high-end market sees its biggest drop in at least a decade. Out of the 50 most-populated metro areas, San Diego had the fourth-highest drop in luxury sales from June to August, said a report from Redfin released Thursday. The number of sales was down 55.3 percent from the same time last year.
The markets with the biggest drops were Oakland (down 63.9 percent), San Jose (down 59.6 percent) and Miami (down 55.5 percent). The lowest drops were in Kansas City (down 10.4 percent) and Indianapolis (down 7.5 percent).
Redfin defined luxury housing as the top 5 percent of the highest-priced homes for sale. So, what is considered luxury differed greatly across metro areas. For example, the median price of a luxury home in Cleveland was $629,000, compared to $3.3 million in San Diego metro (which includes all of San Diego County).
Rising mortgage rates are cited as the main reason for the entire housing market slowing down. Redfin also said economic uncertainty and a tepid stock market also were dampening sales.
Sales are down by more than half?
High-end market sees its biggest drop in at least a decade?
Maybe the higher-end sales in the rest of the county aren’t as boisterous as they used to be, but sales and pricing between La Jolla and Carlsbad looks pretty good to me. These are the stats from the last 2.5 months which should reflect the worst period of the summer slump they measured:
NSDCC Sales Between July 1st and Sept. 15
| Year | ||||
| 2017 | ||||
| 2018 | ||||
| 2019 | ||||
| 2020 | ||||
| 2021 | ||||
| 2022 |
When I search the MLS for detached-home sales over $3,000,000 for the whole county between June and August, this is the result:
2021: 260
2022: 213
It doesn’t look like 55% off to me.
I have requested that Compass get into the real estate reporting business so media types have access to what’s really happening, instead of using Redfin’s stories which sensationalize the data to draw more attention to themselves, rather than help consumers properly interpret the market conditions.
They also fail to mention that the 2021 market was the most insane on record, and any comparisons should be tempered.
Here are the NSDCC stats for $4M+ sales during their June to August period:
2017: 36 sales, $5,150,000
2018: 37 sales, $5,000,000
2019: 32 sales, $3,362,500
2020: 58 sales, $5,336,500
2021: 109 sales, $5,425,000
2022: 84 sales, $5,225,000
Have county sales dropped 55%, and thus the top 5% has too?
All-County detached-home sales, June 1-Aug 31:
2021: 7,194
2022: 4,694 or -35%
All-County, all property types:
2021: 11,744
2022: 7,761 or -34%
I don’t know where they got the -55% but it isn’t factual.
Related question: If you have a nice track home in south Carlsbad that would have been listed at 2 million this past May, and you know you are going to need to sell 2 years from now, thinking about the math only, would you consider selling it now and renting? Obviously there are lots of variables, but just looking for your take on this type of scenario…
I have to agree with you. The doom and gloom articles about high end housing being in a slump b/c of rising / high interest rates is just stupid.
People that buy “high end housing” pay cash.
Related question: If you have a nice track home in south Carlsbad that would have been listed at 2 million this past May, and you know you are going to need to sell 2 years from now, thinking about the math only, would you consider selling it now and renting? Obviously there are lots of variables, but just looking for your take on this type of scenario…
If you rent a house that’s similar, you’re going to pay a minimum of $7,500 per month x 24 months = $180,000. But if your current mortgage payment is similar, then it’s a push.
If rent vs mortgage pmt is not much of an issue, and it’s just about timing the market, then if you are west of the 5 you should be fine. Now and forever.
If you’re in LCV/LCO/LCR/LCG, I think La Costa Oaks will be fine on pricing because they are the newest homes in the Encinitas school district, and helped by the Davidson/Pulte tracts which are high on the hill and feel estate-y. There have been four sales over $3,000,000, with this being the last in August – without a view:
https://www.compass.com/app/listing/7338-corte-tomillo-carlsbad-ca-92009/1074846901893089425
The rest should be ok too. Two million is entry-level now for good quality homes in the better newer neighborhoods, and I don’t see any signs of panic selling anywhere in Carlsbad so that’s probably not going to change much.
Nobody likes the actual physical moving, so if you’re ok with +/- 5% on pricing, then only move once.
But you have to list with me to get those results!! 🙂
Great take, Jim. Thank you!