Why Jim the Realtor

I hope it’s obvious that it matters who you hire as your realtor – we’re not all the same. It didn’t matter much during the frenzy, because even an agent who kicked the crap out of the sale could still find their way to close over the list price.

But not now.

In today’s market, sellers risk getting lowballed, or not selling at all.

After one lowball off-market sale and three unbelievable 10% dumps on price, the entry-level market in Carmel Valley looked like it was in freefall. The sellers and I had already decided to list for $1,675,000 – and I advertised it here – but the next day, two of the dumpers closed escrow. The other listing on the street had been unsold since they had listed for $2,150,000 on June 24th, and they had just lowered their price another $100,000 to $1,650,000 on the same Thursday.

I rallied with my clients and they agreed to my strategy of pricing attractively, so we changed our list price and entered the market at $1,599,000 with the intent to sell the first weekend.


But our list price wasn’t way under market – no, it was full retail, based on those most recent sales.

What made the sale was the combined package of a turnkey property with an attractive price that was well-presented and pushed hard by the agent (me). Once I received three offers, I pitted them against each other and bid it up to $61,000 over my list price on the weekend before Thanksgiving!

The buyer who purchased my listing also bought the house on Valerian Vista (which was five years newer and the lot was 42% larger) in the similar and neighboring tract called Manzanita Trails. Yet the same guy was willing to pay $80,000 more for my listing and close in two weeks.

He had just lowballed a better house by $178,000 and it worked.

Yet, he was willing to buy my listing for $80,000 more than he had just paid the same week?

It’s a great example of how critical it is to hire an agent who has an effective strategy to sell your house.

Get Good Help – Hire Jim the Realtor!

2023 Forecast – JtR

Yesterday, I offered my take on pricing for the San Diego 2023 real estate market.

For those who don’t watch videos, I said the overall median sales price will be down 3% next year, with the superior-home sales causing a +5% median sales price among themselves. Where the line is drawn between superior and inferior homes will be interesting!

2023 Forecast

In this episode of the Top of Mind podcast, Mike Simonsen sits down with Rick Palacios Jr., Director of Research and a Managing Principal at John Burns Real Estate Consulting, to talk about what to expect in the real estate market in 2023.

Rick discusses the company’s latest research on homebuilder sentiment, shares their latest forecast for home prices and the economy, and talks about some secret signals to watch for changes in the market.

About Rick Palacios Jr.

Rick Palacios Jr.

Rick Palacios Jr. is the Director of Research and a Managing Principal at John Burns Real Estate Consulting, where he oversees all research pertaining to the US economy, for-sale housing, and rental markets.

Rick has 15 years of experience in residential real estate and economic research, originally joining John Burns Real Estate Consulting in 2006 and then rejoining the company in 2014 after working as a home builder Equity Research Associate at Morgan Stanley in New York. He has also worked as an Analyst at the Milken Institute, an economic think tank.

Rick holds a BA from the University of California, Irvine, and an MS in real estate economics and finance from the London School of Economics.

Here’s a glimpse of what you’ll learn:

  • Why new home construction might accelerate the housing market slump
  • How much home prices are likely to decline in the next two years
  • The leading indicators (and secret signals!) to watch for changes in the market
  • What’s happening with the second home market now
  • The surprising impact of ARMs in this cycle

NSDCC, Last Six Months

Yesterday a guy said he wasn’t interested in anecdotal evidence and just wanted to see the data.  But we were talking about the buyer demand in 2023, of which we have no data yet.

In addition, the data we do have doesn’t have to repeat itself or be a trend, because every month we have different houses selling.  It’s not like the stock indices that measure the exact same stock every day – in real estate, it’s a new set of variables every month.  It’s a miracle that each month looks as similar as it does!

But for those who want the numbers, here you go!

NSDCC (La Jolla to Carlsbad) Monthly Sales Stats

# of Sales
Median Sales Price
Median SF
Avg. $/sf
Med. $/sf

For the record, here’s the summary from June to November:

Sales: –43%

Median Sales Price: –21%

Average Days-on-Market: +83%

Average $/sf: –13%

Median $/sf: –12%

The stats are straight off the SD MLS, and I’m not sure how they calculate their Median $/sf because it’s not the median sales price divided by the median sf – but their numbers are close to that.

There has been a steady downdraft in pricing, led by sellers who stay on the market for 30+ days and then take a lowball offer.  As long as listings aren’t fully prepared, aren’t priced attractively, and are hard to show, the downward-pricing trend will continue.

Ideally, you want to sell your home in the first week or two that it is on the market.

Can sellers and agents adapt? Will they?

Feels Like Fed Easing

This isn’t exactly new news – most prognosticators figured the Fed would only raise their rate by 0.5% in December, instead of the 3/4% hikes recently – but the stock market liked it (up 628) and the 10-year yield dropped a tenth.  All we need is mortgage rates to be in the 5s for selling season!

Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt. Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting. Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level. It is likely that restoring price stability will require holding policy at a restrictive level for some time. History cautions strongly against prematurely loosening policy. We will stay the course until the job is done.


He never had a clue about the real estate market, and was just winging it – and nobody has helped him with it since. “…..hopefully come out in a better place between supply and demand”???  The guy who has our economy in his hands is living on hope?


Seller Hesitancy Will Persist

Every once in a while, a sliver of truth slips into the mainstream media articles.

After the usual negativity spewed throughout the front-page UT article about the local Case-Shiller Index declining at one of the worst rates of any town in America, this quote appears at the bottom:

Zillow senior economist Nicole Bachaud wrote in an analysis of the report that sellers’ hesitancy to put homes up for sale might mean prices won’t change that much.

“Would-be sellers are sticking their ground and holding tight to the inventory they currently own,” she wrote. “As a result, prices might not continue to plunge down as much as some projections anticipate.”

Nicole has been with Zillow since 2019 and a senior economist since August.  Kudos to her for stating what all other economists are ignoring, like Mark Zandi and the other clowns who have decades of experience and keep telling people that real estate will be crushed any minute now.

I have a real problem with the common belief that we can’t predict the future.

I guarantee you that our local inventory in 2023 will be the lowest on record, and will be the major driver of market activity.  How do I know? In all other previous downturns, the banks drove the market by dumping foreclosures for whatever the market would bear. But today, all we have is forever-home owners who are locked into a low-rate mortgage.

I will present evidence too. To demonstrate how potential home sellers are reacting to higher rates, consider the number of NSDCC listings that hit the market between September 1st and November 30th, which was when mortgage rates rose into the 6-plus range.  Once homeowners think it’s a bad market, they DON’T PANIC, and instead, they wait it out.

NSDCC New Listings Between September 1st and November 30th:

2007: 1,140

2008: 1,146

2009: 1,064

2010: 1,112

2011: 1,094

2012: 921

2013: 998

2014: 1,004

2015: 1,072

2016: 1,052

2017: 939

2018: 1,099

2019: 990

2020: 1,072

2021: 644

2022: 523

The last time everyone thought it was a terrible time to sell was in the 2008-2009 era – and even then we had 1,000+ listings.

We have NEVER been in this environment before with so few choices.  The ultra-low inventory is going to continue into 2023 and even if the Fed eases up and mortgage rates end up in the 5s, potential sellers are going to wait until the coast is clear, and everyone is talking about bidding wars again. GUARANTEED!

As a result, home prices will remain elevated.

Fallbrook Mediterranean Estate

3993 Peony Drive, Fallbrook

4 br/4 ba, 4,243sf

YB: 1995

5.12 acres

SP = $1,590,000 – we represented the buyers.

Spectacular Classic California estate above lovely Fallbrook. Sunsets here are amazing as are the inspiring western-facing panoramic views. Completely private and gated with a jaw-dropping resort-style pool and spa, this property is surrounded by other high-end estates. Five acres of useable land with several building sites for possible guesthouse, pool house or ADUs. Property has income-producing blood orange, lime and avocado trees the wonderful smell of the fruit blossoms can be overwhelming here! Built by custom builder Michael Pierce, the home has beams and high ceilings throughout and many recent upgrades including Montage European Oak wide plank hardwood flooring, new custom paint, quartz countertops, dual full-size Sub-Zero refrigerator/freezer and other new Kitchen Aid stainless appliances, Bosch dishwasher and Kitchen Aid double oven. Home inspection in-hand. This is a must-see property!

San Diego Case-Shiller Index, Sept.

These must be the seasonally-adjusted numbers.

How the mainstream media is reporting today’s Case-Shiller numbers:

  • U.S. single-family home prices slowed further in September as higher mortgage rates eroded demand.
  • Monthly house prices fell in July for the first time since late 2018.
  • The housing market has been hammered by aggressive Federal Reserve interest rate hikes that are aimed at curbing high inflation by dampening demand in the economy.

How it could/should be reported:

  • Higher rates are causing buyers AND sellers to wait-and-see.
  • Inventory is expected to be lower than ever in 2023.
  • Realtors aren’t offering viable solutions.

A guy on twitter said that the real story is that YoY appreciation is still positive, which should make the vast majority of American homeowners happy.  But I commented on how the NAR is publishing articles now that ignore/omit the downturn. I think that those of us who are in the business of assisting consumers with their real estate decisions should give accurate advice on how to cope with the current market conditions.

San Diego Non-Seasonally-Adjusted CSI changes

Observation Month
M-o-M chg
Y-o-Y chg
Jan ’21
Jan ’22

While current homeowners might be relieved to see the big pop in appreciation over time, if they are thinking of moving, they should recalibrate everything they think they know about selling homes.

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