Frenzy Monitor

The number of active (unsold) listings has been on the rise, and is now 13% higher than it was a month ago – though I would still characterize the current market conditions as steady.

Compare your stats from this month to last June and July when higher rates had begun to take their toll. The rate-change was rather abrupt, and it was natural for buyers to wait-and-see about the impact which caused the active inventory to soar.

If your area looks similar to last June/July, it’s probably not a good thing.

The activity this year is more normal and typically what happens as the selling season closes out – sellers are too enthusiastic after a couple of hot months and don’t adjust their price expectations fast enough.

There have been 57 closings between La Jolla and Carlsbad this month, which is good. The monthly sales total should finish over 100, but it probably won’t get up to the 168 sales we had in May.

There will be a few more eye-popping sales, but generally the 2023 market is fading away.

Frenzy Monitor

Here’s another example of how the frenzy has taken a different path in each area.

Carlsbad, Encinitas, La Jolla and Rancho Santa Fe are rolling along with about the same or more pendings than last month – which should have been the peak – but the wheels have come off the wagon in Carmel Valley. There hasn’t been single-digit pendings in the 92130 since we started checking this two years ago! But there are homes for sale, which must mean the prices need some adjustment.

In 2020, there were 400+ pendings from June 22nd to Nov. 30th – with a peak of 491 pendings on Sept. 7.

Frenzy Monitor

We are in the middle of the home-selling season, which means this will be as good as it gets for 2023.

The balance of buyers and sellers has been remarkably steady. Over the last 90 days, the number of active listings has been in a tight 10% range, and the pendings haven’t budged, really, since the Super Bowl.

Those who planned ahead about selling during the season should have listed their home by now. There could be some daredevils who are waiting another 2-3 weeks before going live, thinking that a few more comps might close and help them achieve an extra 5% or so – but it could go either way.

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.

Four areas have MORE pendings than active listings, which is a sign of a red-hot market, and all areas except Rancho Santa Fe are around the healthy 2:1 ratio. But the most interesting datapoint is how the number of active listings has been skidding downward ever since rates went up:

The demand may have dropped off, but the supply is shrinking just as fast, or faster.  Virtually everyone who is thinking about selling their house this year is going to be on the market in the next 2-3 months, and so far, it doesn’t look like the number of springtime sellers will be anywhere close to what we’ve had in the past.

The number of 2023 NSDCC listings is already 20% behind last year’s count – which was the lowest ever.

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.

Most areas look healthy (ratio of 2:1 or better), and those in red have very similar to numbers to last spring which was probably the hottest frenzy on record:

The number of pendings has risen 33% in the last month, and the active listings are restrained. There aren’t any signs of panic and there have been some eye-popping sales already this year that makes you think the frenzy conditions are still around.

We are set up for a boisterous selling season, in spite of high prices, high rates, and high skepticism!

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. We have considered a 2:1 ratio of actives-to-pendings to be a healthy market. When there were more pendings than actives, the frenzy was out of control, and when the number of actives reaches a 3:1 ratio of higher, you know that the market is going the other way.

Lately, the ratio has benefitted from cancellations, and today’s A/P ratio is close to the June level:

The number of choices today is anemic, and not that much different than the frenzy levels.  The combined totals of actives and pendings (underlined in purple above):

Feb: 384

Mar: 386

Jan: 386

Fewer are selling now because of listing exhaustion.

Of the 105 new listings in January:

Number of those on the market in 4Q22, and refreshed as a new listing this month: 44

Number of January listings that were purchased in 2020: 13

Number of January listings that were purchased in 2021 or later: 19

You can say that the inventory of exciting new offerings is extremely tight, especially for those buyers who have been looking since 2020 – you’ve previously seen 72% of the ‘new’ listings.

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

Frenzy Monitor, December

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. Typically, we’ve considered any market to be healthy that has a 2:1 ratio between active and pending listings.

SW Carlsbad, Carmel Valley, and Encinitas all have a ratio that is better than 2:1 – and we are half way into December!  Six areas (in green) have more pendings today than they did before Thanksgiving!

I’m declaring victory for 2022.

We survived the fastest rise in mortgage rates in history, and not only are sales still happening (38 closed in December so far, so we should get close to 100), but the new-pendings count has been hanging tough too.

Observations:

  • No flood of inventory…..yet.
  • The number of actives is way down but not out.  It must mean that those still on the market really do want to sell.  Even though most of them are probably having no showings, at least they are willing to stick it out, just in case. It should give us more to work with in January.
  • Mortgage rates are getting closer to 5%. You can get a jumbo today in the low-5s.
  • The Fed doesn’t open its big yap again until February 1st.

Maybe we can get a quicker start in 2023?  If buyers are on vacation and come back next month to see some price reductions, we could have a decent January too.

Frenzy Monitor – November

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. A healthy market is when there are two actives to every pending.

There are a couple areas (in red) where the number of pendings have dropped significantly. But in six of the more-expensive areas, there are the same number of pendings now as there were last month:

All we have to do is muddle through the next three months!

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

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. Historically, we’ve figured that a 2:1 ratio was a sign of a healthy market.

By now we are drifting into the holiday season, so there should be some natural dropoff this time of year anyway.  But even with rates in the mid-7s today, the active and pending listings still look pretty good!

Four green areas have more pendings now than last month, and the yellows have significantly fewer:

NSDCC Actives and Pendings

All we need to do is make it to February!

Frenzy Monitor By Area

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. We’ve considered a 2:1 ratio of actives-to-pendings to be a healthy market.

While other areas in America are reporting a surge of inventory, it’s not happening here, at least not yet.  Comparing the current stats to the last few months, there really isn’t any reason to be overly concerned:

Taking out La Jolla and Rancho Santa Fe, the actives-to-pendings is 2.4-to-1 (249:103), which isn’t bad, all considered, and it’s the same ratio as it was last month.

The holiday season is less than a month away…..and the NFL season is already two weeks old. The Super Bowl is right around the corner, and so is the 2023 Selling Season!

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