The average 30yr fixed quote for a top tier scenario was around 6.75% on Friday and was up to 6.87% by Tuesday afternoon. More than a few lenders are already back to 7%.
https://www.mortgagenewsdaily.com/markets/mortgage-rates-02212023
Last year the NSDCC sales were the lowest on record. We were already thinking that if the 2023 sales could get to 80% of that number, it would be great. But if mortgage rates spend the next ten months over 7%, what will be the annual sales count for this year? Maybe 50% – 60% of last year?
On November 9th, 2022, the average lender was quoting 30yr fixed rates well over 7%. On day later, that figure dropped to 6.625%. It was one of the best individual days for rates on record and it was driven by an economic report that showed an unexpectedly large drop in inflation.
Inflation and several other key sectors of the economy had pushed the Federal Reserve to hike rates at the fastest pace in decades. When it looked like the data might provide some relief, rates quickly moderated.
Strangely (or so it seemed at the time), the Fed was highly reluctant to read too much into several months of generally more palatable data. They said it was too soon to draw any conclusions other than “it’s a start.” With that, markets hesitated to push longer term rates any lower until the data made an even stronger case of that.
Unfortunately, the data since then has made a case for rates to turn around and head right back up toward previous highs. February has been particularly brutal in that regard and today was just the latest example. In fact, today’s reports aren’t typically regarded as top tier motivations for rate movement, but the market is so defensive to begin with that it doesn’t take much of a bump to create a snowball of momentum.
The average 30yr fixed quote for a top tier scenario was around 6.75% on Friday and was up to 6.87% by Tuesday afternoon. More than a few lenders are already back to 7%.
https://www.mortgagenewsdaily.com/markets/mortgage-rates-02212023
Are you thinking about selling your home and are trying to identify the strategies used by listing agents to get you top dollar with minimal inconvenience?
Are you finding that agents aren’t real specific about how they do their business, and just want you to trust that because they sold houses in the past that they can do it again?
Here is my specific strategy to achieve top-dollar sales with minimal inconvenience: 1) Do a minor tune-up of the home prior to hitting the open market, 2) Price attractively, 3) Make the home easy to see via the open-house extravaganza, 4) Allow all buyers to bid it up, 5) Treat buyers and agents with respect and deliver full transparency that encourages participation.
Here are the results of our last 25 listings:
None of these were priced artificially low to generate a bidding war. When a property is ‘attractively priced’, it means the presentation is worthy and it causes buyers to want to see it in person.
I have not come across any agent who sells homes like I do, and rarely do I ever meet an agent who has any strategy about handling multiple offers.
It happened again yesterday – the listing agent said on the phone that he had 3-5 offers, so I asked how he planned to handle it. Literally, he said, “I don’t know”, to which I replied, “How about doing a highest-and-best round?” He said, “Well we will probably counter the best 2-3 offers”.
Why he would eliminate any buyer is beyond me – I always counter every buyer because who knows how much higher they might go when asked.
In further discussion, he made it sound like none of the offers received were full price, and later I sent him a text that we were sending in a full price offer. Two hours later, he sends a text back that said, “It sounds like the seller wants to move forward with the first offer he got”.
This is the standard procedure in the realtor business – just grab one.
If your listing languishes on the market, it gets worse. Even the chief economist says so:
You want to sell early – during the first week on the market – when urgency is highest, and not languish for weeks or months just to take less later. In case everything goes right and multiple offers are received, you want an expert who creates a proper bidding war. In 2023, when buyers are more tempted to cancel and move on, you want your escrow handled in a way that it closes successfully, and on time.
Your eventual sales price can vary 5% to 20%, depending on your listing agent.
Get Good Help – hire Jim the Realtor!
Let’s revisit yesterday’s graph and add the sales to compare the relative health of the market.
If higher mortgage rates were stopping home buyers, then sales would plummet, especially in relation to the number of listings. But if the number of listings plummets too, and we’re down to just the most serious buyers and sellers, we can still have an orderly market:
NSDCC Listings and Sales Between Jan 1 and Feb 15
Year | |||
2019 | |||
2020 | |||
2021 | |||
2022 | |||
2023 |
The local market isn’t in shambles or falling apart.
The number of buyers AND sellers are much lower than they were previously, but they are acting in concert and fairly similar to the frenzy years. By the time the late-reporters log in, this year’s L/S will get down to 1.8 or 1.7 which is remarkably similar to the hottest frenzy years of all-time!
Our buyers had to beat out four other offers to get a great deal on this La Costa gem on a huge 13,696sf pie-shaped lot at the end of the cul-de-sac.
2112 Sereno Ct., Carlsbad
3 br/2.5 ba, 1,801sf
YB: 1978
No HOA
0.31-acre lot
LP = $1,299,000
SP = $1,290,000
This charming 3 bedroom, 2 1/2 bath home is in the La Costa neighborhood of Carlsbad. The gated property is located at the end of a beautiful cul-de-sac. The home features a lovely living room with vauted ceilings, a dining room overlooking the lush yard, an eat-in kitchen with granite countertops and hardwood floors throughout most of the home. The family room, located off the kitchen, is perfect for gatherings and has access to the patio and hot tub. The primary suite has 2 large closets and vaulted ceilings. The home sits on a large 13,696 square foot lot with plenty of room for a pool and RV/boat. Located close to shopping, restaurants, La Costa Resort, beaches and the I5. This private oasis is the perfect place to call home!
As you can tell in the graph above, there hasn’t been a flood of inventory (yet), and the number of pendings is rising steadily. All of the frenzy conditions are in place this year, just like they were since the pandemic broke out and inventory plunged.
The casual observers will struggle to notice, however.
With so few homes for sale, it won’t be as obvious how hot the market is…or could be!
NSDCC Number of Listings Between Jan 1 and Feb 15
Year | ||
2019 | ||
2020 | ||
2021 | ||
2022 | ||
2023 |
When is the best time to sell? When no one else is!
Jessie says we are in the top 3% of local realtors, which means she is counting 16,000+ agents in the county. She doesn’t include out-of-area or off-market sales, and because we made it into the Compass Top 50, we’re hoping it might mean we’re a little higher. Stay tuned.
In the discussion today, it quickly became obvious how important it is for agents to be able to discuss scenarios and solutions. These days, a buyer-agent will just email an offer to the listing agent, and hope it gets accepted or an easy counter-offer comes back. Any tougher than that and the buyer-agents just turn to their clients and say, ‘what do you think?’ and because no other solution is presented, everyone gives up.
The wicked seller’s market during the last 10-12 years has caused everybody to expect that buyers will just pay the sellers’ price – and if they don’t, then they are called names and declared not serious. Being able to craft these scenarios into sales is where this market will benefit greatly.
It may sound simple to expect agents to discuss offer terms, but don’t underestimate how limited that opportunity is. Not only do people who are used to texting and emailing all day find it a struggle to stitch together a sentence or two in person, they usually have little or no experience with actually discussing offers and how to find a win-win solution. It’s too easy to give up instead.
Ok, ok – North Carolina is too far, and Arizona is too hot. How about moving to Mexico?
Mexico is the ultimate vacation destination, with thousands of miles of beaches, mouthwatering cuisine, fascinating culture, and traditions steeped in thousands of years of history. But our southern neighbor has become increasingly popular with digital nomads and expats, too, due to its affordable cost of living and health care, warm weather, reasonably priced housing and low property taxes, and stable economy. In 2022, a record number of Americans relocated to Mexico, with Mexico City as a top destination.
Read on for eight of the best and most welcoming places to relocate to in Mexico for safety, economic opportunities, and a wealth of recreational activities.
https://www.travelandleisure.com/best-places-to-live-in-mexico-7108883
It was last year when Olivenhain homes selling for $3,000,000+ became a regular occurance.
This house?
2019: $2,310,000
2023: $3,965,000 (+72%)
Here is a glimpse:
There were two new Olivenhain listings today that were priced over $5,000,000!
Just what we need – a new model that comes to the same wrong conclusion……
A new model of forecasting home prices based on consumer demand predicts that prices for housing will decrease by 5% nationally and 12% in San Diego County by the end of this year. The model, which highlights online search activity, was recently published in a new study from the University of California San Diego’s Rady School of Management.
The model’s predictions have a proven accuracy rate of up to 70% and are unique to other price predictors — such as Zillow, Goldman Sachs and Redfin —because those consider a variety of factors like interest rates, wage growth, unemployment and housing supply. Whereas the housing search index created by Allan Timmermann of the Rady School and collaborators at Arhus University in Denmark, focuses on consumer demand by tracking the rate at which prospective buyers use the internet to search for homes.
“It is one of the purest measures of potential demand that you can get because the first thing you do when you’re looking for a house or interested in buying a house, is to go to the internet and look at what is available,” said Timmermann, a distinguished professor of finance at the Rady School. “Those in the market for a home leave a big footprint with their online search activity because of the time it takes – often several months – to find something that is the right fit.”
Cities like San Diego have housing prices dropping more than the national average because it’s where the market overheated the most during the pandemic, Timmermann said.
The reason for breaking down the active and pending listings by zip code is to give the readers a closer look at their neighborhood stats.
Most areas look healthy (ratio of 2:1 or better), and those in red have very similar to numbers to last spring which was probably the hottest frenzy on record:
The number of pendings has risen 33% in the last month, and the active listings are restrained. There aren’t any signs of panic and there have been some eye-popping sales already this year that makes you think the frenzy conditions are still around.
We are set up for a boisterous selling season, in spite of high prices, high rates, and high skepticism!