With the supply and demand so out of balance on the lower-end, it’s incredible to see that the high-end is out-performing with faster appreciation. It looks like big money is throwing its weight around!
Note this guy’s negativity in the second paragraph.
I guarantee you that he is going to be wrong, wrong, wrong.
The association is predicting that home sales in California will drop next year, but has a typical guess for the statewide median sales price – expecting a 5.2% rise in 2022:
Their predictions for this year were terrible – they thought pricing would go nearly flat in 2021 (in red box), and instead we had the biggest gain ever (p is projected):
These were my guesses for this year:
MY 2021 PREDICTIONS:
We will have 10% more NSDCC listings than we had in 2020.
We will have 10% more sales.
We will have a 10% increase in the NSDCC median sales price.
Here’s how this year looks through the first three quarters of 2021:
# of Listings (%YoY)
# of Sales (%YoY)
Median Sales Price (%YoY)
NSDCC inventory DROPPED 16%, yet sales ROSE 15% this year! Pricing is +32%!
A graph showing how more people need to leave town to make it worth moving:
A CAR consumer survey showed, for example, that 35% of home sellers are moving out of state and fewer than 15% were moving to a home in the same county as their last residence. “I think that pressure to migrate out of the state is going to be just as strong, if not stronger, as housing, affordability gets worse,” CAR Chief Economist Jordan Levine said. “I think that this is a housing-driven phenomenon, and we don’t have a lot of relief in terms of housing affordability.”
Speaking of Zillow, they also said in this June article that San Diego home prices would rise 24.7% by May.
How are we doing?
There has never been a great measuring stick for home prices, but let’s look at the most common ones:
Yikes – it looks like home prices have been fairly flat over the last 2-3 months, at least according to the standard ways of measuring. Pricing doesn’t have to rise 2% every month to get to their 24.7%, but having upward momentum is critical because once we roll into Plateau City, it gets harder to convince buyers to overpay. They are already cooling their jets:
Home buyers don’t have much – if any – control over the process, which leads to frustration and disappointment. They don’t have any way to cause more homes to list for sale, and the only way to eliminate the competition is to out-bid them, which can be even more harrowing.
One solution is for buyers to expand their parameters, but that’s not easy and can lead to another ailment that a client described yesterday as “frozen in indecision”.
Just when you want to give up……it looks like others might have beaten you to it!
Showings throughout the state are lower than they were during the first week of January!
It’s been mentioned that not every agent uses this service, but it is such a large sample size that the trend should be a decent indicator of buyer sentiment – they’re exhausted.
Sure, active listings are half of what they were at this time last year, but the showings are 260% different!
Just like with selling, when is the best time to be a buyer? When no one else is!
We already know what’s going to happen with sales in 2022 – they will be the same as this year, with a possible adjustment of +/- 10%.
But the rest of 2021 could get wacky!
It looks like the competition is dwindling, and any seller who comes to market around the holidays has to be motivated! Buyers – stay in the hunt!
The YoY change in the San Diego Case-Shiller Index in June was 31% higher than the national 10-city index. If we apply the same 31% to next year’s national forecast of roughly +5%, the San Diego home-appreciation rate in 2022 should be around 6.55% – though, if you ask me, it will more likely be 2x the national rate.
Most forecasts call for home price appreciation to moderate in 2022.
The Home Price Expectation Survey, a survey of over 100 economists, investment strategists, and housing market analysts, calls for a 5.12% appreciation level next year. Here are the 2022 home appreciation forecasts from the four other major entities:
Price appreciation is expected to slow in 2022 when compared to the record highs of 2021. However, it is still expected to be greater than the annual average of 4.1% over the last 25 years.
From Freddie Mac:
High house price growth has been supported by increased demand due to low mortgage rates, disposable after-tax income that has risen during the current recession and a major shortage of housing supply relative to our population. The increase in house price growth will be less transitory than the increase in consumer prices, as the U.S. housing market will continue to struggle with a shortage of available housing for many months to come. But, we do forecast house price growth to moderate in 2022, with full year house price growth of 12.1% in 2021 followed by 5.3% in 2022.
The rapid run up in house prices may be starting to exhaust potential homebuyers.
We’ve seen indications of softening demand in recent home purchase mortgage applications data. And, while sales metrics remain above pre-pandemic levels, the pace of sales has cooled since the first quarter of this year with home sales slowing for the past four consecutive months. That’s reflected in our home sales forecast, which has total home sales declining to 6.9 million in 2021 and 2022 after reaching a seasonally adjusted annual rate of 7.6 million and 7.2 million in the fourth quarter of 2020 and first quarter of 2021, respectively.
Hat tip to Rob Dawg for sending in the second forecastthat is predicting our home prices will continue to rise:
While home price changes on the local level vary, July gains across all of the top 10 metros surpassed their 2020 levels. However, metro areas where affordability constraints are prevalent continue to persist as prices rise. For instance, in July, home prices in San Diego increased 23.7% year over year and are forecasted to increase an additional 9.1% over the next 12 months.
These guys are predicting a very similar market in 2022, and it will depend on the inventory. If we have the same number of listings (or fewer, which I think is probable), their 24.7% increase is in the bag.
San Diego home prices will maintain their meteoric rise in the next 12 months, a new study says, with a hefty increase of 24.7 percent to a median home price nearing $1 million.
Home improvement site Porch, which provides research on housing market trends, said the San Diego metropolitan area will experience the third-highest price increases in the nation — led by current data showing how much homes are selling for over asking and wage growth.
It said Austin, Texas, will have the biggest increase at 37.1 percent, followed by Phoenix at 26.2 percent. The San Diego metropolitan area (which includes all of San Diego County) had seen prices rise 15.2 percent in a year as of July. Analysts have said low mortgage rates, scarcity, improved fortunes of stay-at-home workers and millennials aging into homeownership are the biggest reasons why prices continue to surge.
Porch predicts home prices will rise across the United States in the next year for the same reasons and will be led by Western states. It used a variety of sources for its predictions — Zillow, Redfin, the U.S. census, the S&P CoreLogic Case-Shiller Indices — to show where homes were selling over asking prices, how much they had already increased, and where median household incomes were strong.
If Porch’s prediction comes true, the median home price in San Diego County will be $940,933 at this time next year.
“The U.S. real estate market is reaching unprecedented heights,” Porch researchers said in the report.
Nathan Moeder, principal with San Diego real estate analysts London Moeder Advisors, said the Porch forecast was plausible but said a countywide 24.7 percent increase is probably high. However, he said that if you look at specific housing types and location, it’s not that hard to imagine.
Moeder said North County single-family homes could easily be up 25 percent in a year because that is where there is the most high-wage growth is and single-family home construction is considerably down. The Porch study looked at all home types — townhouses, condos, single-family — for its prediction, but Moeder said the single-family market is where we will probably see the most eye-popping results. “You can never be 100 percent correct in a forecast,” he said. “If someone asked me if single-family homes increase 25 percent, I could see that being a plausible scenario because we aren’t building any more.”
San Diego County single-family home construction has still not recovered since the Great Recession, with most regional planners favoring multifamily construction to fit more people in rapidly decreasing available land. Moeder said the problem with that scenario is the majority of the demand is for single-family properties, which means they will continue to go to the highest bidder for the reasonable future.
There were 3,160 single-family homes constructed in 2020, 3,043 in 2019 and 3,389 in 2018, said the Real Estate Research Council of Southern California. Compare that with 9,555 in 2004 and 7,904 in 2005.
Alan Nevin, Xpera housing analyst, also felt the Porch forecast was high, with a 12 to 15 percent increase in the next year more likely. He said things that could slow the growth are a rise in mortgage rates, or a change in loan-to-value terms. He said mortgages that require only 3 percent down for ever-increasing home prices might be seen as increasingly risky. However, Nevin said neither scenario has shown signs of happening yet.
In his latest report for the Greater San Diego Association of Realtors, Nevin wrote there were just 1,373 single-family homes sold for under $500,000 in July 2021 (using a 12-month rolling average). That compares with 3,445 at the same time last year. There were 7,130 condos sold under $500,000, using the same formula, compared with 7,226 at the same time in 2020.
Porch forecast the nationwide home price will increase 15 percent at the same time San Diego metro will jump by 24.7 percent. California metros are all expected to make big strides in the next year. Porch said San Jose would increase 24.5 percent, Riverside by 21.8 percent, San Francisco by 21.2 percent, Sacramento by 18.7 percent and Los Angeles by 18.5 percent.
Predictions for home prices are typically seen as tricky business because changes in mortgage rates, unexpected events (such as COVID-19) and natural disasters can shift the market considerably. The San Diego Union-Tribune’s 12-person panel of business leaders and economists predicted in December 2019 that the median home price at the end of 2020 would be $570,000 at the lowest and $624,500 at the highest. It ended the year at $715,500.
Forecast annual price growth by Porch:
Austin, Texas: 37.1 percent
Phoenix: 26.2 percent San Diego: 24.7 percent
San Jose: 24.5 percent
Salt Lake City: 23.5 percent
Las Vegas: 23.3 percent
Riverside: 21.8 percent
San Francisco: 21.2 percent
Dallas-Fort Worth: 21.1 percent
Denver: 20.8 percent
Fresno: 19.8 percent
Pittsburgh: 19.8 percent
Tampa, Fla.: 18.8 percent
Sacramento: 18.7 percent
Tucson: 18.6 percent
The values of nearby condos should benefit greatly from the housing shortage around UCSD: http://enewspaper.sandiegouniontribune.com/infinity/article_share.aspx?guid=5997c243-aa01-4fdd-96f6-d71d8fd7f25a - As numbers boom, UCSD embraces its more social side
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!