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Inventory Watch – Under $3,000,000

Actives = green, Pendings = blue

Last week, a reader suggested that we highlight the Under-$3,000,000 market.

It is astonishing that in an area of 300,000 people, there are fewer than 100 houses for sale priced under $3,000,000 (and none under $1,195,000).

Our standard for a healthy market is a 2:1 ratio of actives to pendings, and today it’s under 1:1….there are more pendings than actives!

The Under-$3,000,000 market is doing great, and if it weren’t for the buzz around higher rates and the uber-frenzy at the start of 2022, we’d be on our merry way through the spring selling season.

But last year’s first quarter was NOT normal:

If someone you know is thinking of selling their home, tell them to go ahead – the market is fine.

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Inventory Watch

Until there is a significant increase in inventory, we won’t know how the current market conditions are affecting the demand, if at all.  I thought we’d get off to a sluggish start, but this is shockingly low:

Total NSDCC Detached-Home Listings, First 13 Readings of the Year

2018: 1,067

2019: 1,110

2020: 932

2021: 670

2022: 545

2023: 431

This is how the new listings look on a weekly basis:

Mortgae rates have improved considerably, and now buyers can get a rate in the fives, instead of the sevens, which sounds attractive. But if there aren’t enough quality listings, who cares?

Lower rates should mean that buyers can get a little more for their money, but sellers want to squeeze some of that benefit too:

More listings are needed – let’s go sellers!

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Inventory Watch

The 10-year yield has dropped 0.5% since Thursday, which means today’s mortgage rates will probably be the low point of the rest of the year. If the CPI comes out hot tomorrow, the mortgage-rate market will shrug off the banking collapse and get back to rising.

Call it a one-day reprieve!

Buyers usually need to have a property under contract to lock their rate. If you have a lender who allows you to ‘lock and shop’, then today would be a good day to lock (hoping that a few lenders reflect the lower bond yields in their mortgage rates today).

NSDCC Actives & Pendings History, Mid-March:

March 11, 2019: 870 Actives, 284 Pendings

March 16, 2020: 698 Actives, 329 Pendings

March 15, 2021: 332 Actives, 333 Pendings

March 14, 2022: 195 Actives, 196 Pendings

March 13, 2023: 274 Actives, 154 Pendings

Plenty of room for more listings!

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Inventory Watch

Do higher rates affect the lower-end markets more? Or are the lower-end buyers rushing to beat higher rates later this year? Or is it all about price?

The NSDCC market under $3,000,000 looks very healthy. The actives-to-pendings ratio is almost 1:1, and there is only a 6.5% gap between their LP-per-sf stats:

The higher-end is doing what it usually does – price high and wait. Their gaps are bubbly (3.6:1, 23%). Buyers in the upper price points should be very cautious – get good help!

JtR Listings:

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Inventory Watch


We are two months into 2023!

Here’s how the weekly new listings compare with previous years – inventory is worse than ever:

As a result, the list-pricing looks like it is holding up:

Here’s how it wrapped up last year:

The high-quality homes that hit the market in March should reveal the underlying frenzy conditions.

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Steady Decline of Listings

Remember when the inventory tanked in 2020 when everyone was afraid of catching the bug?

Once the pandemic was over, we’d get back to the regular flow of homes for sale, wouldn’t we?

But the intensity seemed to increase as time went on, finally spinning out of control when mortgage rates went up. The resulting debris field is causing fewer people to want, or need, to sell.

For most, staying put seems like the best option, at least for now.

Buyers can probably endure another year on the lease.  But potential sellers are getting closer and closer to being too old to move. If there isn’t a clear path to living for another 5-10 years (and hopefully longer) in your new town, you’re probably going to decide to live it out where you are.

The NSDCC YoY change in January was only -17%, so only half as bad as San Diego in general. But the first 15 days of February are -20% YoY, so the local inventory isn’t exactly getting better.

The drop from 2019 is 55%!

Inventory Watch

As you can tell in the graph above, there hasn’t been a flood of inventory (yet), and the number of pendings is rising steadily. All of the frenzy conditions are in place this year, just like they were since the pandemic broke out and inventory plunged.

The casual observers will struggle to notice, however.

With so few homes for sale, it won’t be as obvious how hot the market is…or could be!

NSDCC Number of Listings Between Jan 1 and Feb 15

Year
Number of Listings
Median List Price
2019
625
$1,650,000
2020
563
$1,790,000
2021
449
$1,898,000
2022
341
$2,575,000
2023
278
$2,699,000

When is the best time to sell? When no one else is!

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Inventory Watch

Look at how the detached-home market between La Jolla and Carlsbad has started in 2023:

NSDCC January Sales: 96

I had given up all hope of hitting 100 sales in January, but it is within sight now.

NSDCC January Listings: 182

A few more than expected which is fantastic – we NEED more homes to sell.

NSDCC Active Listings: 265 (ten fewer than last week!)

No flood yet, and none expected.

NSDCC Pending Listings: 150 (15% higher than last week)

The demand appears to be strong enough, and the average DOM has dropped in all categories:

The $0 – $1,500,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 2, 2023
22
$719/sf
75
15
Jan 9
26
$687/sf
50
14
Jan 16
23
$701/sf
52
20
Jan 23
25
$751/sf
60
21
Jan 30
23
$788/sf
45
25
Feb 6
18
$750/sf
59
24
Feb 13
18
$770/sf
48
26

The $1,500,000 – $2,000,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 2, 2023
45
$809/sf
60
18
Jan 9
55
$828/sf
53
19
Jan 16
46
$838/sf
53
30
Jan 23
43
$793/sf
52
31
Jan 30
40
$778/sf
54
34
Feb 6
42
$814/sf
46
30
Feb 13
35
$823/sf
51
39

The $2,000,000 – $3,000,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 2, 2023
52
$869/sf
69
30
Jan 9
57
$940/sf
66
31
Jan 16
50
$948/sf
61
36
Jan 23
51
$949/sf
58
35
Jan 30
54
$964/sf
55
34
Feb 6
60
$930/sf
51
42
Feb 13
51
$1,038/sf
52
47

The $3,000,000 – $4,000,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 2, 2023
29
$1,236/sf
85
6
Jan 9
29
$1,180/sf
80
5
Jan 16
31
$1,196/sf
73
8
Jan 23
33
$1,201/sf
71
7
Jan 30
37
$1,218/sf
70
6
Feb 6
34
$1,236/sf
75
12
Feb 13
43
$1,333/sf
68
11

The $4,000,000+ Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 2, 2023
121
$1,744/sf
126
21
Jan 9
119
$1,716/sf
123
20
Jan 16
120
$1,761/sf
121
26
Jan 23
122
$1,707/sf
119
27
Jan 30
120
$1,680/sf
121
30
Feb 6
125
$1,714/sf
118
28
Feb 13
121
$1,750/sf
116
32

NSDCC Weekly New Listings and New Pendings

Week
New Listings
New Pendings
Total Actives
Total Pendings
Jan 2, 2023
11
6
263
89
Jan 9
36
15
277
88
Jan 16
36
34
266
114
Jan 23
36
22
269
116
Jan 30
32
25
272
123
Feb 6
46
33
275
131
Feb 13
30
35
265
150

NSDCC Weekly LP Quartiles

Week
1st Quartile
2nd Quartile (Median LP)
3rd Quartile
Jan 2, 2023
$2,095,000
$3,695,000
$5,995,000
Jan 9
$1,990,000
$3,495,000
$5,775,000
Jan 16
$2,000,000
$3,574,000
$5,995,000
Jan 23
$2,099,000
$3,595,000
$5,999,000
Jan 30
$2,195,000
$3,525,000
$5,942,000
Feb 6
$2,195,000
$3,598,000
$6,845,000
Feb 13
$2,300,000
$3,795,000
$6,495,000

For previous years, click here:

https://www.bubbleinfo.com/category/inventory/

Inventory Watch

The new listings are trickling in but no flood yet – and it’s never been so unlikely that a flood is coming.

There are a few more active listings sitting around unsold, but last year was unusual in how fast homes were selling this early in the season.  Today’s buyers are still in shellshock over how few choices there are available (and how high the prices are), so it may take a few weeks before the frenzy is obvious to civilians:

Listings Between La Jolla and Carlsbad

Year
# of January Listings
Total Active Listings, First Week of February
2019
418
792
2020
354
661
2021
289
371
2022
223
179
2023
181
275

There will be a few more January listings inputted this year, but it probably won’t get to 200 – making it the lowest number of January listings ever. Before the pandemic, we regularly had twice as many listings in January as we will have this year.

The scariest part is that these low-inventory conditions will probably continue for years to come.

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Inventory Watch

Thirty days into the new year and I have no concerns about the market – other than the nagging low inventory. As recently as 2019, we had 419 listings in January, and this month we won’t get half that many!

Things are improving on schedule – the actives’ count is growing (needed), and the pendings are up 38%:

NSDCC Active & Pending Listings on Jan 2 and on Jan 30

Price Range
NSDCC Actives & Pendings, Jan 2
NSDCC Actives & Pendings, Jan 30
0 – $1.5M
22/15
23/25
$1.5M – $2.0M
45/18
40/34
$2.0M – $3.0M
52/30
54/34
$3.0M – $4.0M
29/6
37/6
$4.0M+
121/21
120/30
Totals
263/89
272/123

For our contest participants, there have been 159 new listings this month. It means our contest should wind up around 180-190 listings, which is a little higher than expected (the median guess was 160).

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