I’ve been hoping for 100+ sales per month the rest of the way this year.
Currently, the October count is 108, so it should get up to around 120 sales by mid-November. Here are the monthly sales and pricing for 2022:
NSDCC Detached-Home Monthly Sales & Pricing, 2022
Jan
140
$2,828,988
$2,855,213
$2,234,944
$2,240,000
Feb
158
$3,063,331
$3,108,907
$2,149,500
$2,386,500
Mar
207
$3,247,251
$3,337,348
$2,400,000
$2,625,000
Apr
227
$3,190,161
$3,251,604
$2,350,000
$2,550,000
May
214
$2,941,080
$3,030,794
$2,350,000
$2,480,000
Jun
188
$2,871,956
$2,881,314
$2,297,500
$2,350,000
Jul
152
$2,892,729
$2,833,588
$2,272,000
$2,280,000
Aug
161
$2,953,967
$2,849,332
$2,200,000
$2,150,000
Sep
134
$2,652,892
$2,560,764
$2,134,500
$2,020,000
Oct
108
$3,168,167
$3,042,502
$2,250,000
$2,150,000
I noted last week that the September average and median sales prices were both 23% lower than they were in March. It looks like the final October data could end up being higher.
The average and median sales prices are easily affected by the types of homes that are selling. The recent environment has had smaller, less-expensive homes selling, while the higher-end market has been languishing.
Let’s include more statistics to fill out the picture:
Month
Sales
Average SP
Avg $$/sf
Avg SF
Median SP
Med $$/sf
Med SF
Mar
207
$3,337,349
$1,028/sf
3,498sf
$2,625,000
$853/sf
2,800sf
Sep
134
$2,560,764
$911/sf
2,887sf
$2,020,000
$790/sf
2,598sf
Oct
108
$3,042,503
$931/sf
3,387sf
$2,150,000
$782/sf
2,840sf
While the October average and median sales prices make it look like we’ve turned the corner, once you analyze the house sizes and $$/sf, you’ll see that buyers are still getting more for their money today.
Unfortunately, none of the talking heads in the media will look any further than the median sales price.
Once their house-hunting vacation concludes in February, all potential home buyers will do is decide if the change in the median sales price supports their mindset about purchasing.
Last week, the NAR reported that their Pending Home Sales Index for the west was down 11.7% month-over-month, but we are beating the odds. Today there are 144 NSDCC pendings, which is the same number as there were in the first week of September!
It’s likely that the local market will mellow down easy now that we’re into the holidays. Whichever way the data goes, it will be easy to write it off to year-end malaise.
Our good friends Gary and Cindy sold their house in Carlsbad and moved to Scottsdale in 2020. The house they bought in Estancia at Troon North was a super-custom 6,580sf ‘elegant-rustic’ that was painstakingly-built over five years. Somehow, the visionary original owner wasn’t that good with finances and he got foreclosed. Our friends bought it for $1,759,000 from the bank on April 9, 2020 – just as covid was getting started.
Sensing an opportunity, they put the home on the market in July of this year for $4,725,000. They got a lowball offer right out of the gate for $3,000,000. But after plenty of showings, a spry 81-year old man paid $4,150,000, plus another $125,000 for the furniture, in the first month on the market. It closed on August 25th.
The biggest fear for the North San Diego County coastal region is a meltdown in Bay Area prices.
It’s been estimated that 50% or more of the buyers who were bidding up homes here during the frenzy are from the Bay Area, and Silicon Valley in particular. If prices were to drop 23% to 30% there, it would impact how much they would be willing to spend on replacement homes here.
This is only one example but we can say that this sold at the peak of the market, or close.
This was my uncle’s girlfriend’s house, and when I was there in November to pay my last respects, I told them that my guess at the current value was high-$2,000,000s.
They hired a good agent who spruced it up and staged it, and they listed for $3,195,000 on March 2nd.
A month later, it closed for $3,710,000 for 1,763sf.
How does it look today?
Today’s zestimate is within 1% of the sales price in April, which had been bid up $515,000 over the list price at the time. What are the comps that Zillow says they used to determine the value?
Four recent closings:
It is only one example, and certainly, not everyone from Los Altos is moving here. But just looking at those four recent sales, it seems like that area is holding up pretty good.
BOTH THE AVERAGE AND MEDIAN SALES PRICES ARE -23% SINCE MARCH.
We saw that the difference needed to fully compensate for the higher rates is -30%. We’re almost there, and the full effect should be built in by springtime!
Please note that I didn’t say home prices are down 23%.
The median sales price is 23% lower than it was six months ago.
When it comes to selling your home, there are a few strategies to consider – and the most important point is to select one, any one!
There is the old traditional PPP plan – Put it in the MLS, Put a sign in the yard, and Pray.
My favorite is to spruce it up, price it right, and have a great realtor sell it promptly.
But a third option is available that is sort of a hybrid of the two.
If you worry that pricing attractively might leave some money on the table (mostly because you lack confidence in your realtor’s ability to conduct a proper bidding war), and really want to start at your aspirational price and hope for the best, then consider this plan.
List Your Home With Two Planned Price Reductions Built In
Generally speaking, the problem with price reductions is that sellers and agents don’t make them big enough to impress the buyers, and hence, you’re just throwing money away. Dropping the price in any amount does get you back on the realtor hotsheet for the day, but we are more annoyed than impressed with sellers who are dinking around over a few thousand dollars when we’re trying to sell a house today.
The amount of the perfect price reduction is 5% of the list price.
It follows my regular guideline of knowing when your list price is right:
List-Price Accuracy Gauge
If you are getting showings and offers, your price is about right.
If you are getting showings, but no offers, then your price is about 5% wrong.
If you’re not getting any showings, your price is at least 10% wrong.
It’s just common sense. If no one is coming around, it’s because buyers think that the price is way off, based on how the home is being presented. There is a glimmer of hope that improving the presentation might get some lookers, but in this market, once buyers take one look at the listing, they will cast you aside and forget all about you unless there is a drastic change in price.
I’ll understand if you don’t want to commit to any price reductions today – heck, you haven’t even signed the listing agreement yet.
But hear me out.
There will be an initial burst of activity once the listing hits the MLS – everybody jumps on the fresh meat, and hopes they are reading the presentation/price combo correctly.
But after 7-10 days, it will be crickets. Showings dry up like an old peach seed!
Plan for two price reductions in advance as a strategy to re-energize the urgency. Put it right in the listing agreement that the price is to be reduced by 5% on Day 14, and another 5% on Day 24.
As long as the initial list price wasn’t more than 10% crazy, then this strategy will get you into escrow within 30 days. If you let the listing languish for more than a month, it will only invite the lowballers, and they will be hacking off more than 10%.
