NSDCC in 4Q2023

The local market between La Jolla and Carlsbad has seemed fairly healthy lately, and in better shape than last year at this time when we were still getting over the shock or higher mortgage rates.

How will the rest of the year turn out?

If the fourth quarter of 2023 ends up at 20% of the total annual sales, then we will have around 350 NSDCC sales over the next three months. We can guess that there might be 130 closings in September, 120 in November, and 100 in December. Roughly, and if we’re lucky. There are only 142 pendings today.

It will be the worst fourth quarter ever.

In 2007, we had 460 closings in the fourth quarter, and in 2008 we had 461 closings. By 2009 the market was already on the upswing, and there were 671 4Q closings between La Jolla and Carlsbad.

Most people will sit this one out. Mortgage rates will probably keep rising, and likely hit 8% in the next week or two – with no hope of coming down anytime soon. The inventory of homes for sale will be full of listings that have been picked over for months, and unless those sellers drop their price substantially, there won’t be much hope for them. An occasional new listing will spark interest and still have a good chance of selling – if they staged it perfectly and listed with an attractive price. How many of those have you seen lately?

We saw some successful fourth-quarter lowballing last year where sellers dumped 10% or more on price to get out, and we’ll see more this year! But only for those buyers and agents who cause it to happen.

Stay in the game and Get Good Help!

Insurance Standoff To Ease

Currently buyers are having to pay 2x or 3x the previous bill for homeowners insurance, due to the lack of options because the big insurance companies have stopped writing policies in California. Some are blaming climate change, and guys like Carl Demaio are blaming Biden, but with a little digging it looks like the insurance-companies requests to raise premiums have been stalled for years. California’s average home insurance rate is $1,225 per year for $250,000 in dwelling coverage is about 14% lower than the US average, according to Bankrate. The thought of insurance premiums being 30% higher sure sounds better than 2x or 3x!

Full story from the LAT:

After a summer that saw many of California’s top home insurers pull back from the state market, Insurance Commissioner Ricardo Lara announced Thursday that he struck a deal with the insurance industry to encourage new coverage in the state.

Insurers, Lara said, agreed to return to the high-risk fire zones in the state in exchange for a number of concessions that will make it easier, in theory, for them to get higher rate increases through the state regulator more quickly. The announcement comes the week after negotiations in Sacramento over a legislative response to the home insurance market fell apart.

Gov. Gavin Newsom also issued an executive order on Thursday afternoon commanding the insurance commissioner to “take prompt regulatory action to strengthen and stabilize California’s marketplace” and consider whether emergency action could be necessary.

The changes are slated to go into effect by the end of 2024, but the hope is that insurers will return to writing new homeowners policies in California sooner. Leading insurers such as State Farm, USAA and Allstate all have requests for rate increases pending with the state insurance department, and are requesting hikes of 28.1 percent, 30.6 percent and 39.6 percent, respectively.

If approved, each company would be allowed to raise its total premiums in the state by that amount, but the rate increase can be distributed differently among homeowners: a cabin in the woods might see a 200 percent jump while a home in San Francisco could see little to no change.


Attention Downsizers!

1610 Hermosita Dr., San Marcos

3 br/2 ba, 1,906sf

YB: 1991

4,597sf lot

LP = $1,100,000

Check out our new listing of a roomy 1,906sf one-story home right on the Lake San Marcos Executive Golf Course – now called the Exec at Lakehouse! Hardwood floors, vaulted ceilings with several skylights, refreshed white kitchen with quartz counters & eat-in breakfast nook, fantastic great room, extra-large primary suite with ample walk-in closet, and a courtyard that some homeowners have converted into additional living area. The location might be the best on the street, for two reasons: the longer driveway is one of the few where you can park cars on it, and the property is around the bend and rarely gets hit by golf balls – wow!


Open house 12-3pm Sat&Sun!

Dogs Are People Too

When selling, it’s smart to make your home appear to be pet-friendly!

Proximity to good schools has long been a deciding factor for home buyers. An increasing number of house shoppers, however, are looking for schools that specialize in fetching rather than phonics.

Pets, according to real estate agents and industry officials, cannot be ignored when their owners shop for a home. “We sell houses, you make them homes,” said Creig Northrop, of Northrop Realty in Clarksville, Md. “Pets are part of a family.”

As the number of households with children decline and those with pets rise, pet-friendly homes and neighborhoods are in demand. Households with children younger than 18 dropped from 48 percent of the market in 2002 to 40 percent in 2022, according to Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors. Families with pets have increased from 56 percent in 1988 to 70 percent in 2022, according to NAR research.

Research by real estate giant Zillow confirmed the effect of the pandemic on pet ownership. It found nearly three-fourths of home buyers and 57 percent of renters in 2021 reported owning one pet, said Amanda Pendleton, Zillow’s home trends expert, up from 64 percent of buyers and 51 percent of renters a year earlier.

“One of those things moving up in importance is walkability, having a place that someone can easily pop outside and walk a dog, important proximity to the vet and dog parks [are] also important because you want to easily be able to take care of anything that your pet may need,” Lautz said. “And those things do come up, and you may not want to put your large dog into the car.”

The American Kennel Club advises house hunters looking for a dog-friendly neighborhood to visit the area early in the morning, while dogs are out with owners for pre-work walks. “Take a look at the breeds, along with their overall well-being,’’ it suggests. “A neighborhood with a variety of breeds speaks to a general dog-savvy population.” Another key, the AKC said, is looking for neighborhood businesses that offer water bowls or a bowl of treats.

Americans are spending more on their pets than ever: $136.8 billion on their companions in 2022, up from $90.5 billion in 2018, according to the APPA.


SoCal Report

I’m on track this year to beat my production volume of 2022! From TRD:

During the pandemic, home sales boomed on a foundation of low-lying interest rates. Now real estate professionals are seeing the slowest market in 35 years.

With mortgage rates higher than 7 percent, Southern California home sales have fallen by almost half over the past two years.

Even with home prices inching back up as sales plummet because of the few number of homes for sale, real estate agents, home inspectors, escrow officers and mortgage brokers starve for business.

The average real estate agent earned 19 to 29 percent less business in the latest year measured, according to Real Data Strategies. At least 5,100 agents who made money in the prior year ended the most recent 12-month period without a single sale.


San Diego Case-Shiller Index, July

The local index is about where it was last month AND last year at this time.

It is 3% below the peak of last May, and +9.6% year-to-date.

It wouldn’t surprise me if it slides downward ~3% the rest of 2023, then up ~3% in the first half of 2024, then down ~3% in the second half of 2024….recession or not.

Because rates won’t be going down until 2025 (at least), pricing should stay rangebound. Without wild swings in pricing, the buyers can focus on finding the perfect home without compromise.

When there are bidding wars and rapidly-rising prices, buyers are prone to just grabbing something and paying whatever it takes. Without those, sellers and agents have to be really good at selling homes – which hasn’t been required over the last several years.

Inventory Watch

Most people – especially agents – are experiencing a tough year for real estate sales.

How tough is it? Here is how the numbers looked a year ago – they are about the same:

It means that the current market conditions will probably extend well into next year, or longer!


Bubbleinfo Anniversary!

It was 18 years ago today that I started writing this blog.

It was a Saturday morning. I set up a free account at squarespace to get it started, and it was solely because I expected every other realtor to do a blog too. Funny how that turned out!

Donna said, “Yeah well fine, just don’t spend too much time on it.”

I’ve been a part-time blogger ever since!

It was in August, 2005 when our escrow officer called me to say the buyer of one of our listings was objecting to signing the loan documents. Their realtor/lender beat me over there, and I heard her telling the buyer, “No worries, we will refinance”. It was one of many things that were happening then that led me to start the blog (the home got foreclosed 22 months later).

This is my first blog post, and it still resonates somewhat today:

Housing blogs were becoming popular and I commented regularly elsewhere. It caused more people to discover what I was doing – and to slam me just because I was a realtor, even though I was being pretty gloomy. By 2009, I had picked up quite an audience, and enough attention that the LATimes picked up on the blog, which led to this piece by ABC News Nightline:

The ABC TV spot ran in April, 2009, which coincidentally was the trough of the San Diego Case-Shiller Index. The audience here exploded, and at the same time the bank-owned listings being sent to us increased substantially. We sold 72 homes in 2009, our all-time high!

All kinds of crazy things have happened.

For example, we monitored the Jenae scandal in Bressi Ranch and La Costa Valley where she and co-conspirators were doing seminars and selling homes to unsuspecting suckers who financed their purchases 100%. Jenae promised to rent them out but they were adding $100,000 to each purchase price that was kicked back to her partner John as a tenant-acquisition slush fund. He finally went to jail but Jenae claimed she was duped too and she is still selling homes around the county today.

My life was threatened a couple of times, I’ve evicted dozens of people, I’ve been in a movie, and on CNBC TV (twice), plus I’ve been on ReasonTV, and in Grant’s Interest Rate Observer (on October 3, 2008 for those who have access). I’ve been on industry panels, I’ve been an expert witness in court, I made a citizen’s arrest of squatters, and I’ve met with the FBI to turn in scamming realtors…..among other things!

I’ve had 12,101 blog posts here with 68,179 comments and 3,000+ Youtubes with 2,341,000+ views, plus 14,200+ tweets. It has been one heck of a ride – let’s keep it going!

Thanks to readers everywhere, and a special acknowledgement of those who have utilized our real estate services over the years. It is why I do this blog, and I appreciate your support!

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