140,000 More People Expected

They expect another 200,000 homes to be built in SD County? Where? MCAS Miramar?

San Diego officials are expecting an end to the region’s perpetual growth.

Driving the news: San Diego’s population is expected to peak in 2042, and then decline by about 100,000 people by 2060, according to the latest regional forecast by the San Diego Association of Governments.

  • Ray Major, SANDAG’s chief economist, told the agency’s board last month this is the first regional forecast expecting a population decline.
  • “Every other forecast has had huge increases, with the San Diego region growing to 4 million people by 2050 … Now we’re looking at 3.4 million.”

Why it matters: The forecast carries planning implications for major, taxpayer-funded resources like housing, transportation infrastructure, water and energy.

By the numbers: San Diego’s growth machine has been slowing for decades.

  • The region grew by 1 million people from 1980 to 2000. But in the last 20 years, San Diego added half that.
  • Planners now forecast just 140,000 new San Diegans over the next two decades.
  • That’s when the region’s population is expected to peak. By 2060 the region is expected to have just 40,000 more people than it has today.

Between the lines: The region’s death rate is increasing, its birth rate is decreasing, and migration is flat.

  • One in 10 San Diego residents were over 65 in 2000. By 2060, that’ll be one in four residents.
  • That aging population will demand different government services and have different transportation and housing needs, said Cynthia Burke, SANDAG’s senior director of data science.
  • “Our parks are going to need more pickleball courts and fewer play structures,” she said during the July board meeting.

Read full article here:


Sputter or Frenzy in 2023?

I think we can say that summer is over, and the off-season is here.

How will the rest of 2022 play out, and what will be the effect on the 2023 Selling Season?

We know that the local NSDCC sales counts will be low for the rest of 2022. Last year we had 136 closings between August 1-15, and this year we’ve had 65.  If we keep having about half of the 2021 sales, then our total sales between August and December will be 594, or an average of 119 per month!

It could look something like this green line:

We will probably have fewer listings than ever in 2H22, but those sellers should be motivated to sell.  If they didn’t need to sell, wouldn’t they be tempted to just wait until spring to go on the open market?

We know that every seller has a load of equity, so if they have to lower their price to sell, they could.  But will they?  We can speculate that if they only had to lower their price by 5%, then they would make the deal. But going lower than 5% off is where the trouble starts – and the seller’s ego gets a vote.

If sellers continue to hold out on price, and sales follow the green line, it will look like a hard landing – and the 2023 selling season could end up being a dud. It would definitely get off to a slower start, and could sputter through the selling season if the inventory is lackluster and priced at retail, or retail-plus.

How likely is that?  Very!

The second-half sellers of 2022 are going to determine our fate for the 2023 Selling Season. Expect next year’s market to be somewhere in the Sputter-to-Frenzy range, guaranteed!

But if you are a buyer, what are you going to do? Wait until 2024?

Let’s re-visit this in January. If sales beat the Green Line, then a more active market in spring is likely!

Here is Bill’s graph of the national sales:

NSDCC Summer Update

The July stats have been updated on these interactive graphs of the 92009 (SE Carlsbad), 92024 (Encinitas), and 92130 (Carmel Valley) markets:

We hear how the inventory has exploded, but compare it to history:

Sales during the 2022 selling season have been similar to February/March numbers:

It’s good to see the insane-bidding-over-the-list-price has slowed:

We’ve pulled forward about ten years’ worth of appreciation – sellers will be reluctant to give it back:

Fewer Pendings & Sales is Relative

The California Association of Realtors said that the number of pendings has been falling.

They don’t give any other details or interpretations, so what will casual readers conclude?

The market must be coming apart!

Thanks C.A.R.!

But because pendings and sales are directly related to inventory, we must consider the impact of having fewer homes for sale.  Look how dramatically the inventory has dropped recently, and yet we still had a good amount of sales, relatively:

NSDCC Detached-Homes

Total Listings, Jan 1 to May 31
Total Sales, Jan 1 to May 31

In 2021, the frenzy was so hot that every house was selling, and the lower inventory wasn’t as obvious because the sales count was tremendous. But now that the number of homes for sale has really dried up, the impact on pendings and sales is more noticeable – at least for those who are willing to look that far.

This year has been really great! The rest of the year will probably be less great. It might even get back to 2018-2019 levels, which is fine – that’s the way it always was.  We could handle worse if we had to.

Detached-Home Graphs, Coastal North

Here are graphs that look generally supportive of the local market.

The SP:LP is still well above 100%, though hopefully it will keep receding. Everyone should be happy with it running around 100% or a little under, like it has throughout the history of real estate:

There are more homes for sale – but still low for the selling-season:

June sales are going to be really low, which is fine. Both buyers and sellers have the right to wait for some future date when it might be different (conditions are not likely to change though).

Rapidly-rising prices have decimated the lower-end markets. We’re left with an affluent, higher-end market where buyers and sellers both tend to wait for something better, later:

Check out my new mortgage-rate widget in the right-hand column – we just hit 5.85%! >>>>>>>>>>>>

Why Are You Moving?


The average length of homeownership has been 10-12 years…..until now?!?

Nearly half of Americans are considering a move to a new home

Of those considering a move, more than 1 in 4 (27%) want to stay within their current area. The main driver behind this sentiment is a desire to reduce living expenses, which is true for 44% of respondents.

Rounding out the top five reasons behind a potential move are:

  • “My current home is too small” (27%)
  • “I’m looking for different features” (27%)
  • “I’d rather live in a different part of town” (12%)
  • “I don’t like the management of the property I’m renting” (11%)

“The economic crisis has adversely affected the finances of many Americans,” said Tendayi Kapfidze, LendingTree’s chief economist. “Even those who have kept their jobs and added to savings, via stimulus and spending less due to staying home, are likely worried about the stability of their financial position.”


Median Home Value to Median Income

If there is anyone left who still believes in market fundamentals, here’s a graph that shows how the traditional 3:1 price-to-income ratio is still a decent measuring stick in the rest of America.  But in California, it has escalated to dizzying heights!

San Diego County

Median Household Income: $75,456

Median Sales Price, YTD: $705,000

Price-to-Income Ratio: 9.3


Median Household Income: $113,175

Median Sales Price, YTD: $1,465,000

Price-to-Income Ratio: 12.9


With the affluent in full control of the real estate market, expect these numbers to get dizzier!

Million-Dollar Sales Double

Ultra-low rates, record home equity, and societal needs/concerns make the perfect frenzy cocktail:

The pandemic is driving a major boom in the housing market that’s breaking all kinds of records and exposing a very uneven economic recovery between the haves and the have-nots.

The most dramatic increases are happening at the top end of the market — sales of homes costing $1 million and up have more than doubled since last year.

Millions of people are working from home while juggling their kids’ remote schooling. And many who can afford to are buying bigger houses.

Home sales in September were up more than 20% from a year ago, according to the National Association of Realtors. And median home prices hit a record $311,800. That’s about $40,000 more than just a year ago.

“It is great news for homeowners as they are seeing equity rise and rise,” says Lawrence Yun, the chief economist for the Realtors group. But he says prices are rising too fast. Generally, he says, economists like to see home prices climb in line with people’s wages. But in recent years, home prices have been rising much more quickly.

“It will eventually lead to a choking point where first-time buyers simply can not show up to the market,” Yun says. Already the percentage of first-time buyers is decreasing — they represent about 31% of the market. In a healthy market, they represent 35% to 40% of buyers, Yun says.

He worries that if the trend continues, the country will see a further “divergence in society where you have the haves, with homeownership gaining their equity, and those people who would like to become homeowners continually being frustrated, unable to reach that goal of owning a home.”

Read full article here:


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