The local market isn’t at the frenzy level, but can we at least call it stable?
Last month there were 18% of the sales that closed over their list price. There were 41% of the sales that closed for at least $100,000 under their list price. If roughly 60% of the sales are getting close to their list price or over, then I think that feels like a fairly balanced market.
For the last five months in a row, the year-over-year monthly sales have been higher! The average and median pricing look stable too.
NSDCC Average and Median Prices
Once we get past the Super Bowl, the market should really get cooking! Last February, the over-list percentage was 30%, and then March was the high point for 2024 with 44%. I doubt we will hit either one of those again this year, and I’ll just settle for more YoY sales for the sixth month in a row.
We started signing new listings in October in anticipation of the market getting off to a fast start early, just like last year. So far, so good:
NSDCC January Action
The previous years are sold listings that went pending in January. In 2025, most of the 126 are still pending and some will fall out. But more will be added too, so we’ll call it even for now.
But tracking about the same as last year is a good sign – last year was red hot in the first quarter.
How are we doing with the six listings in a row?
506 S. Freeman – Sold to cash buyer and closed in two weeks.
11463 Nantucket– Multiple offers and in escrow after first weekend. All contingencies released yesterday.
29482 Vista Valley – Active listing, 12 days on market. A real specialty property. It should sell.
The fourth listing was tenant-occupied, and they just vacated – we’re getting access today.
So instead we plugged in this RB condo for launch last weekend:
15283 Maturin #57 – Three offers, all over the list price. Will go pending today.
We decided to pause this week and launch the next listing on Thursday the 13th. Not because I fear going up against the Super Bowl because it doesn’t start until 3:30pm on Sunday – we’re doing a touch more tune-up to the house. Our next two listings are real trophy properties, stay tuned!
I think we can say that the market is fine, and isn’t showing signs of stalling due to a surge in listings.
In the post-settlement world where agents are expected to prove their value, Compass will soon unveil a new client-facing portal that it says will streamline the transaction process for buyers and sellers while also helping its agents build more business.
The new portal is being introduced as Compass continues to pushagents and consumers toward its private listings channel — betting on a future where the hotly contested Clear Cooperation Policy is repealed.
An all-in-one interface for buyers and sellers
According to Rory Golod, Compass’ president of growth and communications, the portal — dubbed Compass One — is “the first of its kind” in the industry, allowing an agent and client to work together through the entire transaction. The brokerage has also called the product, which it developed fully in-house, “the #1 most requested piece of technology” for agents and clients. Compass built it out in phases, Golod said, starting with the agent tools and then creating Compass One.
“It’s interesting that in other advisory businesses — whether it’s banking, accounting or other businesses — you log into a portal,” he explained to Real Estate News. “If you work with a private wealth manager, you go to their portal, you see all your assets, your communications, and your documents.”
The platform offers a detailed timeline of the buying and selling process along with the expected timing for each step. Service providers such as mortgage brokers or inspectors “live in here too,” Golod said.
But bringing the client, agent and other professionals together isn’t the only thing the new platform does. It also integrates the company’s “3-phase marketing strategy” where agents are encouraged to pitch sellers on the Compass Private Exclusives channel first and the Compass Coming Soon channel second before going to the open market. The company formally launched this strategy last November.
“Taking a listing and just throwing it on the MLS and aggregators on the first day you launch it without getting any feedback from the market, understanding if you’re priced right, understanding what the demand is and building up interest — you’re not serving your clients’ best interests,” Golod explained.
Currently, Compass has about 5,500 Private Exclusive listings, a spokesperson said.
One of the first tasks for sellers and their agents in the One Compass portal is to discuss the Compass Private Exclusives channel. Golod said the push toward private listings puts regular home sellers on the same footing as “homebuilders, celebrities and ultra-high-net worth clients” who often sell their homes off the MLS, and it helps sellers avoid “negative insights that hurt their value” such as days on market and price reductions.
All of the listings mentioned above were listed in the MLS and available for buyer-agents to sell. But where are they? Realtors will tolerate the current policy for a while longer, but we don’t like it either – and though the MLS used to be the ideal solution for all involved, those days are behind us now. For many agents, representing buyers is more trouble than its worth.
Remember a couple of years ago when I started predicting that buyer-agents will go away?
This is it – it’s happening right in front of us, and nothing will stop it.
My predicted surge in inventory is underway – look at the navy-blue line above. There are 363 active listings between La Jolla and Carlsbad today, and once the Super Bowl is out of the way, we should really get rocking. It should easily reach 400 before the end of the month.
It’s not a bad thing for the sellers who are willing to price attractively – there is still plenty of action. There will just be more this year that don’t sell at all.
NSDCC New Listings In The Last Week: 72 (+8%)
NSDCC New Pendings In The Last Week: 28 (+9%)
Buyers love the additional choices and will continue to be very picky, especially on price.
How did last month measure up?
NSDCC January Sales: 117 (102 last January)
NSDCC January Listings: 243 (242 last January)
Both of those categories should swell by roughly 10% as the late-reporters log in.
The final guesses on the number of NSDCC January listings:
211 – Eddie89
213 – Shadash
216 – regina
246 – Anne M
267 – Surfrider
280 – doughboy
293 – Joe
296 – Tim DeRoche
303 – Tom
307 – Jun
311 – SN
317 – CB Mark
318 – Nick
328 – Majeed
337 – natalie
353 – Derek
355 – Skip
365 – Leo
401 – Dr k
417 – Susie
421 – Giving Cat
Giving Cat (Rob Dawg) will probably endure the same fate as with the Coffee Bet – being correct, just early.
In April, 2009, real estate bloggers did a panel discussion on when the bottom would be, and I guessed December, 2011. Instead, the bottom happened during the very month of our discussion – April, 2009! https://www.bubbleinfo.com/2009/04/24/coffee-bet-2/
It never occurs to the experts that higher prices have something to do with the locked-in effect, and that home sellers have to move to where it’s much cheaper to make it worth moving. For those who pay cash for their next home, having a 3% mortgage didn’t keep them from moving today – or any day.
I think my +15% to +20% inventory prediction is looking pretty good:
Some segments of the U.S. residential real estate market started to thaw in January after December’s deep freeze, with a growing number of homeowners listing their homes for sale in a sign that the stubborn “lock-in” effect is finally beginning to ease.
The “lock-in effect” refers to homeowners’ reluctance to sell because they have a low mortgage rate and would have to take out a mortgage at a higher rate when they buy a new home.
Even though the 30-year fixed mortgage rates continue to be high, hovering at just below 7%, homeowners seem to have accepted this new normal and are not letting it stop them.
“While rates remain elevated, it is possible that we might be seeing that chiseling effect starting as sellers may grow tired of waiting for significant changes in rates,” says Realtor.com® Chief Economist Danielle Hale in her January monthly housing report.
“Further, while the lock-in effect remains a factor for many sellers, the strength of the effect is gradually waning,” Hale adds.
Realtor.com projects that home sales will rise by 1.5% in 2025, thanks in large part to the passage of time and slowly decreasing mortgage rates chipping away at the lock-in effect that has been hampering home sales for months.
The latest available data shows that newly listed homes were up 10.8% year-over-year, making it the busiest January in terms of new listing activity since 2021.
What’s more, freshly listed homes shot up 37.5% compared with December, marking the largest month-over-month spike in five years.
“Time and natural turnover could be leading some sellers to make a move this year despite higher rates,” explains Hale.
Looking at the big picture, overall home inventory across the U.S. was up 24.6% compared with the same time last year, a 15th consecutive month of growth. In terms of raw numbers, there were 829,376 active listings in January, plus 314,545 under-contract listings, also known as pending listings.
While home sellers are eager to sell, it seems that homebuyers are still hesitant to buy.
The average home lingered unsold for 73 days, making this January the slowest since 2020. Homes spent five days more on the market than last year and three days more than last month.
We didn’t hit that number until mid-March last year, and in 2023 we didn’t reach that many until mid-May!
The number of pendings did rebound but they are still under where they were in the last two years.
As more and more active (unsold) listings pile up, will sellers get nervous and adjust on price?
It doesn’t look like it. In fact, they look more confident than ever, judging by the last three months. The median asking price has risen +29% since the beginning of November!!
I thought that this would be the week that the surge of new listings would start to appear, but not yet. There have only been 167 new listings this month between La Jolla and Carlsbad, which is about the same pace as last January.
The monthly closed sales are about the same too. There were 102 NSDCC sales last January, and so far there have been 87 closings this month so we should exceed the 2024 count.
Ok – so we’re doing the same or a little better than last year.
The concern?
There have only been 81 new pendings this month.
It means the future closings are going to be light.
It looks like we’ll be lucky to reach 100 sales next month. There are only 109 total pendings today, and probably 20 of those will close this month! Last February, there were 140 closings.
Let’s examine our listing on Nantucket for guidance.
I thought we could get 5-10 offers, and might get bid up 5% to 10% over list. The house looked spectacular and seemed superior to the comp RIGHT NEXT DOOR that was pending with the same list price. The neighbor had a pool, but inside looked very standard.
But we received fewer than five offers and it only got bid up a little.
What happened?
I had 200+ people attend the open houses, so it seemed like everything was going right. But there must have been at least 6-8 people who told me that they were going to make an offer, but then disappeared.
Was it the three-day weekend? I had 200+ people attend.
Was it too early in the season? I had 200+ people attend.
Was it the price? I had 200+ people attend.
No matter how many homes the potential buyers have seen, they had to recognize that this home was highly upgraded, which is hard to find around Carmel Valley where the vast majority of homes for sale are older tract houses – but not old enough to be thoroughly renovated yet. It’s probably the worst time ever for CV shopping because every home not in Pacific Highlands Ranch looks dated now.
We have lookers. They appear to be very cautious and content to wait-and-see.
Will they be buyers? If they are waiting for better pricing, they will be in for a LONG wait. Sellers aren’t going to budge when they have a comp or two to back their case on price.
Buyer-agents are fading away, and this is where we will see the impact. Without having good help, potential buyers will be overly cautious and stay comfortably on the fence. Fewer sales ahead!
It’s common that when the residential resale market feels slower, the participants shrug it off by saying, “It just takes longer to sell these days.” It is a too-quick opinion that masks the real problem, which is:
It’s taking longer for sellers to admit how wrong their price is.
Because the days-on-market is publicly displayed, the buyers are watching it closely as an indicator. What’s worse is that they think the longer a home is on the market, the more wrong the price is!
Consider the graph above, which tracks discounts back to the old days when the DOM counts weren’t as available as they are today. Today, I think those timelines are 2x as fast – or faster!
Today, if a house hasn’t sold in the first two weeks, buyers start thinking the price is wrong.
Conversely, if buyers think the price is decent, they buy the home without waiting.
Here’s a sampling of the three mid-range zip codes in north county’s coastal region:
My main point?
Conveniently, the opinion that “It just takes longer to sell these days” has been true when prices are rising. Eventually, the market catches up and the over-priced turkey will eventually look like a deal if you wait long enough – butonly when prices are rising.
When prices go flat – like they are today – then the market doesn’t come to save you. Instead, it undercuts the OPTs, leaving them high and dry. It is especially true when there is a surge of new listings that makes it even more obvious.
Yesterday, I mentioned to a past client in CV that I sold Nantucket for over list after the first weekend, and he said, “Incredible! We have houses in our area sitting on the market for months with zero action”.
In Spring, 2025, listing agents will be asking their sellers; “do you mind taking a little less than the actives?”
Welcome to Flat City, with OPTs being ignored and causing buyers to be suspicious of everyone’s price.
