I said on the Frenzy Cruise that I’d also recognize the NSDCC sales that closed well under their list price. It’s good for potential sellers to see how buyers will lowball homes that have been on the market for a while – and encouraging for buyers to know that they might be able to get a deal if they play the game wisely.
These are sales from November, with percentages off their original list price:
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-15%
-10%
-23%
-10%
-16%
-32%
-16%
-20%
-11%
-15%
-15%
-13%
-26%
-17%
-23%
-12%
-20%
-14%
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-29%
-19%
-16%
-22%
-12%
-14%
-14%
-18%
-28%
There have been 94 NSDCC closings in November (so far), and 34% have been discounted by a double-digit percentage off the original list price – which isn’t too bad, given the negativity everywhere. It happens at all price points too.
Two conclusions from the clusters in graph below:
Once a home has been on the market for 30-40 days, sellers are ready to deal.
Sellers who go beyond 100 days on the market are really taking a chance.
There were 13 of the 32 sales who ‘refreshed’ their listing, or had it on the market this year with a different agent – those DOM are not reflected here. There were quite a few at the -8% and -9% too.
Five of the 32 were round-tripped.
Because it is unethical to deliberately list a home for sale at an unrealistic price, it means that in a third of the cases, the listing agents just flat-out got the price wrong by a double-digit percentage. Can you imagine if doctors, lawyers, stockbrokers, plumbers, or burger-flippers were wrong a third of the time?
There probably aren’t many people today who expect to see any frenzy left in the marketplace. But here’s a view from the street, looking at actual sales closed over the last 30 days.
At 22 minutes, this turned into a full-length feature film (sorry), but consider it an audio track about the current market conditions, with video evidence to support it.
The biggest fear for the North San Diego County coastal region is a meltdown in Bay Area prices.
It’s been estimated that 50% or more of the buyers who were bidding up homes here during the frenzy are from the Bay Area, and Silicon Valley in particular. If prices were to drop 23% to 30% there, it would impact how much they would be willing to spend on replacement homes here.
This is only one example but we can say that this sold at the peak of the market, or close.
This was my uncle’s girlfriend’s house, and when I was there in November to pay my last respects, I told them that my guess at the current value was high-$2,000,000s.
They hired a good agent who spruced it up and staged it, and they listed for $3,195,000 on March 2nd.
A month later, it closed for $3,710,000 for 1,763sf.
How does it look today?
Today’s zestimate is within 1% of the sales price in April, which had been bid up $515,000 over the list price at the time. What are the comps that Zillow says they used to determine the value?
Four recent closings:
It is only one example, and certainly, not everyone from Los Altos is moving here. But just looking at those four recent sales, it seems like that area is holding up pretty good.
Between trying to watch the Padres game on my phone and the crowds of people looking at the house yesterday, I couldn’t get any more footage than this:
After having roughly 300 people attend the two open houses, we have received 14 offers!
We have countered all of the offers because agents don’t know who will go higher – why limit the seller response to just the top 3 or 5 offers? We countered $1,150,000 to every buyer to narrow down the group of contenders willing to go to at least that amount, and then I’ll do the jimjamalama.
Stay Tuned!
We did adjust the price upward this morning to alert the newcomers to our new starting point:
There were a few comments, mostly from neighbors, that accused me of deliberately starting with an ultra-low price to attract more people. Given the recent sales nearby, the current market conditions, and especially the active listings sitting around unsold, I thought it was an attractive price. I never fear pricing too low because I know how to handle a fair bidding process so everyone has a chance to pay top dollar.
The national bashing of the real estate market continues unabated, and I’m sure there are individual markets that are really feeling it. But real estate is local, so let’s examine the facts.
To get a sense of what has been happening since rates got into the 6s, let’s review NSDCC homes that have gone pending recently. You don’t have to know the streets or the particular homes – just scroll through the bunch and you’ll get the feeling that frenzy pricing is still lingering. Click on any for the full listing:
Bill has been following the inventory in different markets, and San Diego is faring much better than other areas. He is showing a 23.8% drop in new listings YoY, but last year was the record low. Look at the previous years:
September New Listings, San Diego County Detached and Attached Homes:
2005: 6,325
2006: 5,735
2007: 5,448
2008: 5,101
2009: 4,328
2010: 4,696
2011: 4,013
2012: 3,578
2013: 4,265
2014: 4,367
2015: 4,185
2016: 4,267
2017: 3,953
2018: 4,506
2019: 3,959
2020: 4,389
2021: 3,570
2022: 2,853
Everyone talks about the demand-side, but our market is being impacted by the lack of supply too.
Could there be demand that isn’t being satisfied because there aren’t more quality homes for sale listed by good agents at attractive prices?
I had 100+ people come to open house this weekend, and there were legitimate buyers in the group.
I wanted to show a house this weekend, and the showing instructions said to text the listing agent. I started via text on Wednesday, but literally never got a response, so I didn’t show it. The listing is still active today.
Higher rates haven’t changed the frustration of finding the right house, at the right price.
The inventory is probably going to dry up further and more sellers get convinced that now isn’t a good time to sell. With a tight selection of quality homes for sale, those who are willing to sell now aren’t going to be deterred from trying peak pricing, or close.
Example: My $1,800,000 listing in Aviara? This just popped up around the corner, priced at $2,295,000:
Those folks might sell, and they might not, but they should help me with mine! My point is that we are not seeing an increasing flow of new listings being priced lower and lower in an attempt to get out now. It’s actually quite the opposite.
In 2013, fresh off the biggest housing downturn in their lifetimes, 73 housing industry executives compiled the Top 10 Signs of a Housing Market Bubble at our Summit Conference in Laguna Beach, CA. Assessing the criteria that we set almost a decade ago (10 quantitative and 10 qualitative), we have found that 16 of the 20 housing bubble signs are now flashing red.
In last month’s client-exclusive housing outlook webinar, we called out some signs we are seeing:
Dr. Doom said in his podcast here that the California markets have had the most significant price declines, and the Bay Area, LA, and San Diego have ‘gotten creamed’.
He didn’t provide any data to back it up, so let’s look at what we have from the MLS which includes September data so we’re including the most relevant information.
San Diego County, All Property Types:
The San Diego County median sales price was $855,000 in June and July, and last month it was $792,500 – which was a 7% decline from the peak this summer. It was also 2% higher than in August. Is that creamed?
We’re coming off the greatest real estate frenzy of all-time, and now the Fed has caused mortgage rates to double in less than six months. All considered, I think we’re doing great, and better than expected.
These guys who just fling it around on their national platforms are doing undue harm to our market. Don’t listen to them until they get out of their mom’s basement and actually investigate what’s really happening!
New post (San Diego Case-Shiller Index, Jan) has been published on http://bubbleinfo.com - https://www.bubbleinfo.com/2023/03/28/san-diego-case-shiller-index-jan-4/
SDSU assistant Chris Acker just made us aware on @JonAndJim that over 50 former Aztecs that played for Steve Fisher and Brian Dutcher will be at the Final Four on Saturday. What an incredible bond.
Because few people service a mortgage for all 30 years (they get divorced, refinance, move or die), mortgage rates are compared to the 10-Year Treasury Note.
While Treasury yields have fallen, mortgage rates are stuck in the mid-6% area.
-17%
-14%
-23%
-19%
-15%
-10%
-23%
-10%
-16%
-32%
-16%
-20%
-11%
-15%
-15%
-13%
-26%
-17%
-23%
-12%
-20%
-14%
-13%
-29%
-19%
-16%
-22%
-12%
-14%
-14%
-18%
-28%
