Last month, the 92009 median sales price declined 14.8% YoY, and was -22% MONTH-OVER-MONTH.
Keyboard warriors everywhere will be jumping all over news like this.
What really happened?
Last month, there were 52% fewer sales than in September, 2021.
The homes that sold last month were 13% smaller than in August.
The average and median $$-per-sf were higher month-over-month.
There were only 23 sales last month. Fewer sales means more volatility in the data, and the numbers will be bouncing all over the place. The average SP:LP was 97%, so nobody was giving it away, and when you look at sales like the last one on the list on Corte Luisa, know that it was an agent selling his own house for a $980,000 profit above what he paid in 2020.
You have to look deeper into the data to get the full picture of what’s really happening!
Here are the August and September stats:
Let’s revisit a previous blog post for an update, and more detail.
I featured a group of listings near La Costa Canyon HS a couple of weeks ago. The day the blog post ran, the most-expensive listing was pending, but it fell out of escrow that day. It’s back in escrow this week, and judging by how the listing agent ran my rather-sizable nose in it, they must have gotten pretty close to their list price. Tracey sold hers too, and together the two highest-priced listings are the ones that are pending, which demonstrate that buyers want quality and are willing to pay for it.
Pendings = purple:
Realtors who have no game will be reading juicy headlines on social media and be telling their sellers to dump on price, rather than dig for the truth and get to work.
GET GOOD HELP!
And just wait until I tell you the story about this one!
The over-bidding is winding down to more manageable levels as just 24% of August buyers were willing to pay over the list price. As usual, the $1,000,000 to $2,000,000 range was the most active, where inventory is low and the number of quality homes for sale even lower:
The number of sales in August were higher than they were in July, but still well under recent history:
NSDCC August Sales
NSDCC Average and Median Prices by Month
# of Sales
This is much more normal – the average and median sales prices are under their list prices!
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. We’ve considered a 2:1 ratio of actives-to-pendings to be a healthy market.
While other areas in America are reporting a surge of inventory, it’s not happening here, at least not yet. Comparing the current stats to the last few months, there really isn’t any reason to be overly concerned:
Taking out La Jolla and Rancho Santa Fe, the actives-to-pendings is 2.4-to-1 (249:103), which isn’t bad, all considered, and it’s the same ratio as it was last month.
The holiday season is less than a month away…..and the NFL season is already two weeks old. The Super Bowl is right around the corner, and so is the 2023 Selling Season!
This Encinitas Ranch home was listed for $3,499,000 on March 29th – which was the week rates started going up – and had no price reductions. After 112 days on the open market, they found a buyer who closed in less than 30 days (Sept.12th) for $3,390,000 cash, which was 3% under the list price.
The buyer’s dilemma: If you are like most buyers, you are turned off by at least 90% of the inventory.
There are probably only one or two listings per month that are nice enough to capture your interest – can you stay passionate in your pursuit? Will you review every auto-notification of a new listing with the likelihood of 85% to 95% of them have no chance of being a possibility for you?
For some, and perhaps for many, it will be easier to just pay within 3% of the list price for a stale old listing. Buy the house and get settled. Pour another 5% to 10% into it during the first year to make it your own.
I had mentioned in the comments section that I showed a house on Labor Day that was priced at $2,195,000. The temperature was so hot that I literally said to my buyers that no agents would be working on the holiday, let alone writing offers, so we should have an easy path to escrow. We wrote a full-price offer and expected the seller to sign it on Tuesday.
Donna suggested that I call the listing agent to see if there were any other offers. I shrugged it off, thinking there weren’t going to be any other offers – heck, the market is dying a slow death, right?
So Donna called, and found out that there was an offer, and it was over list price.
By late Tuesday, there were SEVEN offers.
It felt like 2021 all over again as the listing agent gathered the highest-and-best offers from the contestants. Yesterday, she revealed that the decision was going to be between my buyers and one other, and that we were in second place.
We had bumped our offer to $2,450,000, and that wasn’t enough to win? Wow!
I asked her to tell me the number to beat…..and she did, and sent me the document to prove it (snip above).
Ultimately my buyers decided not to go higher. But I complimented the agent for her transparency, and told her that I wish every listing agent would do that. I guess it’s possible with blind bidding that a buyer might go wild, but we were already 12% over the list price in a non-frenzy environment. It’s much more likely that my buyers would go higher if they had a number to hit, and be able to say yes or no, rather than having to grope around in the dark trying to guess what it would take to win.
Congratulations to the seller and listing agent, and bravo – job well done.
Yesterday’s Case-Shiller Index for San Diego was 425.26, which is 11% higher than it was in January.
But check how the trend increased between January and now.
Prices rose as fast as ever in early 2021 (yellow above). If they would have mellowed out along my red line, then we would have experienced slightly-increasing prices for the last year. But noooo! Instead, the early-2022 buyers – egged on by their realtors – insisted upon paying ridiculous amounts over the list price to win a house. Hopefully that practice is done.
The only reason the June reading was 11% higher than January was because it came down a bit. The San Diego Case-Shiller Index rose 11.2% between January and April, 2022, which was an annual clip of 33.6% – which nobody would have believed was sustainable after rising 43% since the pandemic started.
If the SD Case-Shiller just goes back to where it started in January, it will be a 10% drop from today, which will sound like a disaster. But the annual appreciation will be zero, which is not only reasonable, but sustainable for a while.
Is anyone going to mind if we start 2023 where we started 2022, price-wise? If mortgage rates can stay in the 5s, and hopefully the low-5s, we should be fine!
Last week, we saw here how the number of July sales has been plummeting, and with three days to go in the month, we are now at 119 NSDCC sales – which means we will end up with around 40% to 50% of last year’s July sales.
We also hear about how inventory is rapidly rising in other areas of the country. How are we doing here?
Here are the recent monthly counts of NSDCC July listings:
2022: 215 so far.
The NSDCC sales really aren’t bad, considering how few new listings are coming to market.
There is a bit of a backlog of sellers hoping to get lucky, but they will likely cancel their listing in the next month or two and try again next year, rather than give it away.
Between now and February, there will probably be months when we don’t reach 100 NSDCC sales, and it will be because there won’t be enough homes available to sell!