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Frenzy Monitor

Let’s break down the active and pending listings by zip code is to give you a closer look at the neighborhood stats.  We’re going to have more active listings simply because the the list prices were all based on red-hot frenzy conditions (comps + 5% or more), and we’re past the red-hot days.

NSDCC Actives and Pendings

Town/Area
Zip Code
Feb 27
Mar 16
May 5
Jun 20
Cardiff
92007
5/7
6/4
7/7
13/5
Carlsbad NW
92008
6/9
8/10
15/10
27/10
Carlsbad SE
92009
15/29
8/33
20/27
47/25
Carlsbad NE
92010
1/5
2/6
7/14
17/11
Carlsbad SW
92011
2/11
4/12
8/16
19/19
Carmel Valley
92130
10/31
10/30
22/25
50/18
Del Mar
92014
15/32
17/10
24/13
30/8
Encinitas
92024
15/32
17/28
24/32
46/26
La Jolla
92037
53/38
55/35
51/32
72/24
Rancho Santa Fe
92067
45/22
47/24
49/22
52/25
Rancho Santa Fe
92091
2/2
5/2
2/0
3/2
Solana Bch
92075
6/6
3/10
9/7
12/5
NSDCC
All Above
179/205
182/204
238/205
388/178

The selling season started early in 2022, and was cooking by the end of February. Let’s group the different areas based on how their pendings are holding up.

Frenzy-ish:

Carlsbad SW – A few houses finally went up for sale, and buyers responded.

Rancho Santa Fe – The active listings aren’t growing like in the other high-end areas of Del Mar and La Jolla, and the number of pendings are very impressive. It was once normal when the Ranch had a 10:1 ratio between actives and pendings!

Normal-ish:

Everyone else, except……

Crash Zone

Carmel Valley – which has always had more pendings than actives over the last two years – and sometimes twice as many pendings!  While having 50 actives and 18 pendings anywhere else would be a win, in the CV it feels like a meltdown.

Here they are:

(I tried to sort those by price order, but all they have is sort by date added)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

This nonsense about every buyer paying way over list price has to stop.  If the SP:LP was around 100% we’d be elated, yet it was 111%, 109%, and 109% in the February-April stretch.

So far in June, the SP:LP is 107% for the 104 detached-home sales between Carlsbad and La Jolla!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

We can also track the average market times too.  Any upward trends here would indicate market slowing – it’s early so nothing too startling yet:

The hottest of the red-hot was in 2020, when we had 400+ pendings from June 22nd to November 30th – with a peak of 491 pendings on 9/7/2020. Today we have 178 pendings.

Frenzy Monitoring 1

Let’s take a look at the covid history of one of our frenzy measuring sticks:

NSDCC Sales-Price-to-List-Price Ratio:

Month
# of Sales
Median List Price
Median Sales Price
SP:LP Ratio
March 2020
206
$1,492,500
$1,445,000
96.8%
Apr
156
$1,424,499
$1,390,000
97.6%
May
143
$1,399,900
$1,395,000
99.6%
Jun
274
$1,362,500
$1,363,700
100%
Jul
351
$1,450,000
$1,423,350
98.2%
Aug
350
$1,450,000
$1,419,812
97.9%
Sep
360
$1,500,000
$1,498,750
99.9%
Oct
382
$1,696,500
$1,674,100
98.7%
Nov
305
$1,599,000
$1,599,900
100%
Dec
290
$1,633,500
$1,624,391
99.4%
Jan
187
$1,716,690
$1,725,000
100.5%
Feb
224
$1,719,500
$1,758,000
102.2%
March 2021
252
$1,800,000
$1,825,000
101.4%
Apr
359
$1,799,900
$1,825,829
101.4%
May
300
$1,900,000
$1,979,500
104.2%
Jun
357
$1,900,000
$1,960,000
103.2%
Jul
312
$1,792,500
$1,852,500
103.3%
Aug
268
$1,897,000
$1,950,000
102.8%
Sep
283
$1,899,000
$2,000,000
105.3%
Oct
251
$1,899,000
$1,899,000
100%
Nov
200
$1,998,500
$2,100,000
105.1%
Dec
183
$1,995,000
$2,165,000
108.5%
Jan
140
$2,234,944
$2,240,000
100.2%
Feb
158
$2,149,500
$2,386,500
111.0%
March 2022
206
$2,425,000
$2,625,000
108.2%

The chatter increases with the lower volume, plus there are going to be months when the offerings just aren’t that tasty. But in 2022, when buyers see a home they like, they over bid substantially!

All we have to do is watch the trend over the next few months to know the direction of the market.

Tracking the Real Estate Frenzy

Now that we are grappling with 5% mortgage rates, people are wondering how it will affect the market.

The common perception is that there will be pullback.

What that means isn’t defined – it’s just a vague concept that the logical mind wants to believe.  But logic flew out the window long ago, so I’m not sure how useful it is today. Prices went up 30% in 2021 and it didn’t stop, or even slow the market in the first quarter of 2022.

Does it matter what the opinion is today?

Not really, and you can refer to the chart above to see how much opinions matter.

All that matters is that we track the trends over the next few months to see what actually happens!

Yesterday I said all we have to do is monitor the days-on-market, and the actives vs pendings to get advance notice on how the market is behaving. Let’s add a third metric, the SP:LP ratio.

Who are the home buyers that will determine our fate?  When out-of-towners from more affluent areas come here to see our prices, they think we are giving them away.  There have been estimates that as many as 70% of the coastal sales here have been bought by people from the Bay Area.

We should keep an eye on their market!

I’m watching one sale in progress there. My uncle has been a lifelong resident, and my mom, brother and sister all live there so I have opportunity to check in on their real estate market from time to time.

In December, we went to pay our respects to Sally, my uncle’s long-time girlfriend. They met later in life and had separate houses, and unfortunately Sally passed away from cancer just before Christmas.

We had a brief conversation with her sisters who were from outside California, and they expected that they would sell her home in early 2022.  The zestimate was in the mid-$2,000,000s, and they said they would be happy with a price in that range.

After painting and staging the relatively modest 1,763sf house built in 1953, they listed it for $3,195,000. It went pending within ten days – and since then the zestimate has zoomed to $3,800,000!

https://www.zillow.com/homedetails/1200-Brucito-Ave-Los-Altos-CA-94024/19620416_zpid/

The house is five doors away from the Foothill Expressway, which isn’t a freeway but there is some road noise. The 9,975sf lot size is attractive, and the house is one-story.  But low-to-mid $3,000,000s?

Even more interesting was the house at 1051 Peninsular Ct.  When we were there, I saw the sign and drove by to confirm that it was literally right next to the Foothill Expressway.  It closed for $3,100,000!

The pricing in the Bay Area is subject to change, just like it is here – but it should be somewhat relative, and we will likely ride the same elevator.  The 1Q22 pricing spiked in Los Altos, and the sisters – who only expected a sales price in the mid-$2,000,000s – will pick up a lucky windfall.

The 2022 Lucky Windfall of the First Quarter doesn’t have to continue throughout the year for our market to thrive.  If pricing “crashes” downward 10% to 20% from today’s lofty heights, it means we’re only back to November pricing, which you would think wouldn’t bother sellers much.

But it will.

Do not underestimate the home seller’s ego.

It doesn’t mean you should, or shouldn’t, go buy a house today.  If you are a home buyer in the hunt, just be picky (or pickier) about what you will tolerate. The list prices will feel like TodayComps+5%, the sellers are doing less to condition them for sale, and the listing agents act like you owe them money.

There is one guarantee. The inventory later in the year will be worse than it is today.  It could feel like pricing is loosening up (it’s not yet), especially in the 4th quarter of 2022, but it won’t matter if there aren’t any homes for sale that you would buy. Be in the hunt for the right house!

I will keep track of the winners and losers. Help me if you can!

Here is today’s winner, who had 11 showings and three offers.  Tanya raised the list price to a range, which makes it look like it probably went over $3,000,000:

It may seem crazy to you, but those coming from Los Altos will think it looks like a steal!

NSDCC Frenzy Monitor

Let’s see which areas are picking up steam early in the selling season:

We used to think that a normal and healthy market has a ratio of 2:1 actives to pendings, so it’s stunning to see five areas that have 3x the number of pendings as actives! And SE Carlsbad has more than 4x!

The trend of the average days-on-market can give us a feel for the market direction too:

In 2020, we had 400+ pendings from June 22nd to November 30th – with a peak of 491 pendings on September 7, 2020.

Last year, the high pending count was 386 on May 12th – and this year’s peak will likely be in May too.

It looks like I made an error on the Del Mar A/P counts in the last reading.

Frenzy Monitor

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.

Our Big Three zip codes – where you can still buy a decent house for $2,000,000 – are still having more pendings than actives (highlighted below), but let’s note how strong the pending counts are in La Jolla and Rancho Santa Fe too:

The median list price in La Jolla today is $5,422,500, and in RSF it is $7,700,000!

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

All four categories have improved recently, and the high-end $3,000,000+ average market times have been in the tightest range over the last few months!

Some may call this the off-season, but the only reason that the numbers aren’t any better is because the number of new listings is so low.  Brace for impact in 2022!

NSDCC Frenzy Monitor

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.

Given how inventory has been dropping significantly, it is impressive how many pendings there are:

We had 400+ pendings from June 22nd to November 30th last year – with a peak of 491 pendings on September 7, 2020.

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

Buyers are pickier than ever, so no surprise that some dogs aren’t selling.

Frenzy Monitor

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.

The number of pending listings is almost the same as the number of actives. It’s feasible that their paths could cross again in the coming weeks as the unsuccessful sellers cancel their listings for the holidays:

NSDCC Active and Pending Listings

But with fewer homes for sale combined with the time of year, we probably won’t see much change.  Let’s call it low-grade frenzy conditions for now.

How about the average days on market?

Some of the high-enders have been hanging around a while, but the rest are moving!

It’s fascinating that the average days-on-market for ALL pendings is 33 days, and the median is 16 days.  For those 65 pending sales over $3,000,000, the average DOM is 54, and the median is 43 – it doesn’t take months to sell in this market.

Frenzy Monitor

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.

It’s interesting to see that the total number of actives and pendings are so similar – as close as they were in late-June as the max frenzy was unwinding. The big split in the counts on August 11th made it look like the frenzy was coming apart, but they’ve gotten back in line nicely since:

But with fewer homes for sale combined with the time of year, we probably won’t see much change.  Let’s call it low-grade frenzy conditions for now.

The average days on market is creeping upward, but still no big concerns. There will always be sellers who would rather wait for the lucky sale, than adjust their price – and longer average market times indicate more sellers doing the former. Though we should note that the hottest range ($1.5 – $2.0) must have a lot of dogs lying around:

San Diego County has experienced the worst YoY change of active listings IN THE NATION. Three thousand houses for sale in a county of 3.3 million people? Yikes!!

And that was the August report.  Today in San Diego County:

ACTIVES: 1,760

PENDINGS: 2,600

Wow!

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