These charts and graphs get updated on the first of the month, so let’s take in the latest data. Everyone laments the general lack of inventory, but can we break it down further?
Yes indeed – and let’s note that the higher-end inventory was bustling during the pandemic which helped fuel the insane frenzy conditions. But look how the number of higher-end listings has cooled off now.
The affluent buyers have never been so frustrated!
I’m going to guess that half of the total NSDCC transactions are estate sales – only because nobody else wants to sell. We’re going to see a lot more like this one – no real improvements except for a few windows:
LP = $1,300,000 and SP = $1,480,000!
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.
We closed escrow yesterday in La Costa Valley! The seller is a bubbleinfo reader so obviously we have analyzed our results carefully over the last month. We felt that we did everything right in preparing what we thought was a superior home in the tract and utilized an attractive price, but it wasn’t enough to set off a wild bidding war like back in the frenzy days.
We received five offers, but when presented with the opportunity to submit their highest-and-best price, NONE of the buyers were willing to go up. It made this sales price feel like full retail and differ greatly from the covid-frenzy ultra-low interest rate days when buyers were desperate and would pay any price to win.
Now buyers seem to be patient with today’s shortage of homes for sale and would rather wait, than go crazy on price (there were two higher-priced sales of this model during peak frenzy last year).
Same thing here with six buyers yesterday, where it was very orderly and nobody went nuts on price:
Or maybe the group of homes that deserve a wild bidding war is much smaller than it used to be? This is peak season, so any remaining exuberance should be worked out by July/August.
To hear more stories like this and a wide array of opinions, click here:
https://twitter.com/SullyCNBC/status/1649240769658605570
Remember when I was on CNBC with Sully in 2011? He used to live in Carmel Valley!
In this graph from two weeks ago we saw that there were 28% of the NSDCC detached-home sales in March that closed over their list price. Because it’s one of my favorite ways to judge the market conditions, I did a check on the numbers for April so far:
NSDCC April Sales (preliminary)
Closed sales: 85
Closed over the list price: 36%
It’s not just on the lower end either:
Of the 85 closings, 41% were all-cash!
My one post-frenzy prediction was that there wouldn’t be any more sales under $2,000,000 in the Davidson-built Starboard tract in La Costa Oaks (the last was $2,150,000 in October).
We’ve finally had a closing here in the middle of April. They had to knock off $4,000 to make the deal:
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.
The recent bounce-back has been impressive with 183 NSDCC closings in March, which is better than the sluggish start that I expected.
The 101% looks like a good sign too.
Was it an overall market improvement that will keep growing? Or just a lucky stretch of higher-quality homes coming to market early in the season?
Here is more texture. The market time is improving, though not to the uber-frenzy level of last year:
This note about the March sales was the most interesting:
I think we’ve entered a new frenzy-lite phase where the buyers are more deliberate in their actions, and holding out even more for the higher-quality homes – but willing to pay the premium for them.
Fewer homes for sale than last year?
Look at the differences in metro-population too:
Denver: 2,931,000
Las Vegas: 2,899,000
Nashville: 1,315,000
San Diego: 3,319,000
Today, our count is actually 2,114 homes for sale (all property types) in a county of 3,319,000 people!!
At the beginning of 2022, the frenzy reached warp speed due to low rates and shrinking inventory. Now there are fewer homes for sale? The extreme drought of quality homes for sale is causing its own frenzy.
The exploding inventory elsewhere could really help us out too. For those willing to leave the state, the number of active listings have doubled in most areas. Go get ’em!
Link to Bill’s post
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