Inventory Watch

As long as there are more pendings than actives, the market is doing just fine.

Oh well – that was last week’s thought.

As you can imagine, it’s the high-end market that is loaded with actives. This week an agent commented on what a delightful experience he had showing higher-end homes in Rancho Santa Fe, where listing agents were happy to book appointments at the buyers’ convenience, didn’t go crazy about having to submit financials just to see a home, and were paying regular commissions.  A few of the homes had been sitting around for months!

My guess is that most of the disappointed sellers will pack it up and wait until next year, rather than consider selling for today’s top dollar – which might be slightly less than they thought (but 10% to 30% more than it was 2-3 years ago).

How’s the action in the more reasonably-priced categories?

There are 100 active listings, and 191 pendings priced under $2,000,000 today.

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NSDCC Frenzy Monitor

To help get a sense of the frenzy conditions, let’s monitor the number of active & pending listings per area.

If the active (unsold) listings start to rise, we will know that pricing is becoming an issue.

But so far, the demand for detached homes between Carlsbad and La Jolla is solid, and buyers are enduring prices that are 20% to 30% higher than last year:

NSDCC Actives and Pendings

Town or Area
Zip Code
Actives/Pendings, Feb 2nd
May 12th
May 26th
Cardiff
92007
11/16
9/12
10/11
Carlsbad NW
92008
17/19
19/30
19/23
Carlsbad SE
92009
9/38
19/60
13/57
Carlsbad NE
92010
1/12
5/13
6/13
Carlsbad SW
92011
2/17
8/16
4/17
Carmel Valley
92130
26/43
20/65
23/63
Del Mar
92014
43/13
34/26
34/26
Encinitas
92024
39/45
33/54
32/56
La Jolla
92037
101/46
82/40
87/47
RSF
92067
96/35
83/54
72/53
RSF
92091
3/7
1/6
Solana Beach
92075
11/10
6/9
7/8
NSDCC
All Above
356/294
321/386
308/380

The 92009, 92011 and 92130 (SE Carlsbad, SW Carlsbad, and Carmel Valley) are scorching hot, with 4x, 4x and 3x as many pendings as actives!  But Rancho Santa Fe is the most impressive of all. There have been times when there were 10x as many actives as pendings in 92067 – today it’s 1.4x!

With the 30-day closings, there shouldn’t be any drastic changes here – let’s examine the trends over time.

We can also track the average market times too. Any upward trends here would indicate market slowing:

I’ll run this every couple of weeks.

NSDCC Actives & Pendings

Previously we experienced a healthy market when actives outnumbered pendings 2:1. Then as the market heated up, we got used to the 1:1 ratio. Now we have areas where the ratio is more than 1:2!

NSDCC Detached-Home Active and Pending Listings

Town or Area
Zip Code
Actives
Pendings
Cardiff
92007
10
14
NW Carlsbad
92008
15
24
SE Carlsbad
92009
20
48
NE Carlsbad
92010
4
11
SW Carlsbad
92011
4
19
Carmel Valley
92130
25
38
Del Mar
92014
32
25
Encinitas
92024
36
48
La Jolla
92037
95
45
RSF
67+91
87
50
Solana Beach
92075
8
9
NSDCC
All Above
336
331
West RB
92127
24
63
Scripps Ranch
92131
6
25

What can buyers do?

Going inland doesn’t help – the 92127 and 92131 are hotter than ever.

Just go up in price – La Jolla is nice this time of year!

We will re-visit these numbers in the coming months.

NSDCC Pendings Overtake Actives

This morning we have more homes in escrow than we have for sale!

NSDCC Detached-Home Listings

Listing Status
# of Listings
Median List Price
Active
352
$3,950,000
Pending
353
$1,925,000

Once upon a time I was discussing the actives/pendings relationship with local agent Peter B.  He agreed that a 2:1 ratio of actives to pendings was a sign of a healthy market.  If 2:1 was healthy, what is 1:1?

One thing that’s happening is that the action is rising into the upper price ranges. Today we have 94 homes in escrow that are priced over $3,000,000, which I doubt we’ve ever had before.

If we don’t see a surge of more listings, the pendings could extend its lead in the coming days/weeks!

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NSDCC January Performance

When you look at the general data, the 25% dip year-over-year of January listings doesn’t look so bad – especially on a graph.  Heck, we’re in the middle of a pandemic!

But look how it is playing out:

NSDCC Detached-Home New Listings

Price Range New Listings in January # of Those Pend/Sold Pend/Sold Median DOM
Under $1.5M
85
75
5
Over $1.5M
189
98
6

The lower-end is smoking hot where virtually all listings have found a buyer (88%), and for the higher-end to have most of the January listings go pending already is astonishing!

This has to be the best performing market of all-time!

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Actives & Pendings By Area

Historically the market has felt healthy and balanced when we’ve had a 2:1 ratio of actives vs. pendings.

Remember when the Ranch was 10:1 for years? Now look at the market – especially on the lower-end:

NSDCC Actives and Pendings

Town or Area
Zip Code
Actives
Pendings
Cardiff
92007
11
16
NW Carlsbad
92008
17
19
SE Carlsbad
92009
9
38
NE Carlsbad
92010
1
12
SW Carlsbad
92011
2
17
Carmel Valley
92130
26
43
Del Mar
92014
43
13
Encinitas
92024
39
45
La Jolla
92037
101
46
RSF
92067
96
35
Solana Beach
92075
11
10
NSDCC
All Above
356
294

Carlsbad, a town of 110,000+ people, has 29 houses for sale?

It’s probably going to get crazier too as the traditional selling season opens up and we see a few more listings trickle out. It would take a flood of new listings to cause the market to slow down now.

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Inventory Watch – Trickle Up!

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

Price Range
Active Listings
Avg. LP/sf
Pending Listings
Avg LP/sf
$0-$1.0M
28
$533/sf
67
$506/sf
$1.0M-$1.5M
113
$608/sf
158
$518/sf
$1.5M-$2.0M
123
$714/sf
126
$630/sf
$2.0M-$3.0M
137
$823/sf
87
$729/sf

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!

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NSDCC Actives & Pendings

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?

Pendings Daily and YoY

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.

https://www.mikedp.com/

Total & Active Listings

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!

Thanks Mike!

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