In previous years, the action is winding down by mid-August.
Not this year!
We’ve seen more pendings than actives in the lower price ranges. This week it happened for the first time in the $1,500,000 – $2,000,000 range:
NSDCC Actives and Pendings
Let’s note the differences.
Last year at this time, we had 199 actives and 79 pendings between $1,500,000 – $2,000,000.
On June 1st, we had 162 actives and 76 pendings.
Now it’s 123 vs. 126!
We saw those fancy graphs yesterday that compared the San Diego region to others nearby, and it appeared that the markets have slowed slightly. But let’s isolate on the La Jolla-to-Carlsbad area.
The chart above is from May 15th – here are the same categories today:
No slowdown here, especially in the $1.0M to $2.0M range where we have 26 more pendings today than we had 2.5 weeks ago. How about the additional 12 pendings in the $3.0M+ range?
The graph above shows the raw data – how the pendings started to increase as we got into April. It seemed like the action began to slow down just recently, and, sure enough, the rolling averages have been in decline over the last week or two in San Diego – and elsewhere.
If you just need some covid relief, then the graph below will make you feel better. For the last month, the pending sales in San Diego have been comfortably ahead of last year’s counts.
The New Listings graph (above) shows how the raw number of homes listed for sale in the coronavirus era compares to the same time frame in 2019.
It shows that 40-50 days after the initial shock, sellers started feeling more comfortable putting their home on the market, and for the last twenty days, San Diego has only been 5% to 21% behind last year.
The graph below helps to demonstrate the supply vs. demand relationship year-over-year, and it’s helpful to call these Unsold Listings because they are the net outcome (Supply – Demand = Unsold Listings).
If we were running at the same pace as in 2019, and the demand percentage had dropped the same as supply, then our Unsold Listings would simply be the same 5% to 21% lower than last year. But our number of Unsold Listings are now 37% below last year – the best in the southwest!
Lower inventory, record-low rates, and the insanity are causing demand to surge!
We are back to having a similar number of California showings as we had in the first week of March!
It looks like we will jam the usual six-month-long selling season into just four – May through August – but only if there is enough to sell. The showings leveled off recently, and it might be because buyers have seen everything there is to see. But the total number of new actives did surge higher, but that might only mean you have 1-2 more to look at:
The 121 new listings this week is the most since we had 122 on March 11, 2019 – yet we’re still 200+ listings behind where we were a year ago. The new pendings had a big week too with an increase of 57% over last week’s count:
Mortgage rates hit their all-time low this week, so it’s all blue sky ahead!
Weekly NSDCC New Listings and New Pendings
Statistically, we are cranking!
They send out this survey twice each month – on the 15th and 21st – so these agent comments above were based on their market observations around then. Hopefully they have gotten back to work by now:
||New Listings Since April 1st
||New Pendings Since April 1st
We have had 220 new pendings since April 1st, which is remarkable! The 220 is today’s number, of which 47 have already closed. Others that went pending and fell out of escrow are not included.
Everyone is wondering how the coronavirus will affect housing, so Bloomberg News decided to whip up the hysteria with this article built on speculation and guesses. Mark Zandi has had one of the most negative opinions about housing, hoping that some day he might be right, and Yunnie has never left his ivory tower.
These are the only facts mentioned in the article:
The potential economic fallout still hadn’t completely registered this past weekend for homebuyers in Seattle, an epicenter of the U.S. outbreak. On Saturday, around four dozen groups filed through a four-bedroom Tudor in the Whittier neighborhood listed for just over $1 million. Many said they had hoped the virus would keep other would-be buyers away in a market where there’s little inventory and bidding wars are frequent.
At another open house nearby, handshakes were out, but plenty of home shoppers came for a look. Craig Rothlin, 34, and Kanako Nakarai, 31, were among them. Both work for tech companies, and have been hurt by the recent stock market rout.
“A good chunk of our down payment is caught up in that,” Rothlin said.
The couple had been waiting to see prices come down. But, so far, that hasn’t happened. The last home they bid on got multiple offers and sold for $180,000 over the asking price.
Seattle is an epicenter of the U.S. outbreak, and FOUR DOZEN GROUPS are looking at an open house? Many said they hoped that the virus would keep other would-be buyers away? There’s your takeaway!
Let’s focus on the facts.
In the area between La Jolla and Carlsbad, there are 121 houses for sale priced under $1,500,000, and 158 pending listings. When there are more pendings than actives, it means the demand is outstripping the supply! Even if some nervous nellies decided to wait it out, there will still be plenty who want to buy a home when rates are at all-time lows.
What about the high-end, Jim, aren’t the affluent more susceptible to stock market swings? Maybe, but they’re not going to give it away! This scare will be over in less than a year, and rich people have a long history of waiting on price, rather than dumping.
What if we have a recession? Then don’t make your payments – banks don’t mind!
It would take a flood of inventory to disrupt the market in a bad way. But the COVID-19 is causing a hunker-down-and-do-nothing environment. Homeowners aren’t going to panic and uproot their life just because of some stinking virus that will pass in 6-12 months.
Rates are really low, and the market is responding. We’ve considered it a balanced market when the active listings are running about twice the number of pendings. Here’s how we’re doing so far in 2020, and compared to last February:
NSDCC Detached-Home Active and Pending Listings:
||Ratio in Feb 2019
We are at the 2.0 mark, but take out La Jolla and Rancho Santa Fe and we’re at 1.3!
In SE Carlsbad and Carmel Valley – which are about the same size – we have more pendings than actives!
The selling season is pretty much over – did you get ‘er done? Or did summer slip away from you?
School starts in 40 days…..there is still time!
But when you include a couple of days for negotiating, and a couple of days for moving, you need to make a deal by Monday!
Lower rates have helped to keep our pending sales afloat, so don’t give up hope:
Get Good Help!
The numbers are going to bounce around, so can we agree on two things?
A. Variances of 1%-3% are natural.
B. National stats don’t mean anything to you and me.
Let’s keep it local! Here are the San Diego North Coastal 3-month-moving averages on pendings:
Two big YoY increases and a minor decrease look ok to me.