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Inventory Watch – Happy 4th!

This should be about it.

If there hasn’t been a surge of inventory by now, it’s not coming – at least not this year.

There might be some nice action over the next couple of weeks as buyers try to land a deal before school starts, but there won’t be big discounts – they will have to pay the price.

It will probably be the same in 2023 too.

How do I know?

Ask any potential, or actual, home sellers around the coast:

“You already have to pay six figures in capital-gains taxes when selling your home (and if they are selling a home they have owned since the 1970s or 1980s, it could be $500,000 to $1,000,000 in taxes).

“How do you feel about lowering your price by $100,000 or $200,000 too?”

“How do you feel about losing that much money?”

Their answer will tell you everything about the future of our market – they’re not going to give it away!

It’s been the craziest six months of real estate ever! Expect it to get downright boring from here.

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Inventory Watch

It’s exciting now!

There is one thing we know for sure:

Generally speaking, home sellers are not adjusting their expectations about price.

The standoff will last another few weeks, and then the unsuccessful sellers will pack it in for the year.

Don’t be surprised if the 2023 pricing looks a lot like it does today!

The NSDCC inventory is still well below normal, but nobody cares about that. This is Bill’s take:

https://calculatedrisk.substack.com/p/housing-inventory-will-tell-the-tale

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Limit on Doom

Hat tip to long-time reader Todd who we saw at the game last night – we did bug out early, but it was only to pick up Kayla at the airport. The Padres walked it off in the 11th inning!

Meanwhile, people are wondering where the local real estate market is going to end up.

For conditions to change much, sellers would have to panic, and dump on price. Otherwise, we will just be taking a leisurely stroll through Plateau City, admiring all the homes that aren’t selling.

Here are the favorite zip codes around North County – SE Carlsbad (92009), Encinitas (92024), Carmel Valley (92130), and Rancho Santa Fe (92067).

A few months ago, we had the lowest number of active listings of all-time:

While lately the number of the active listings have been growing steadily, they would have to double from this point before getting into the danger zone – but we’re going to run out of time before that happens.

Now that doom is being broadcast everywhere, sellers will decide that ‘now isn’t a good time to sell’, and by August they will quit listing their homes for sale.

There are 396 NSDCC active listings today (and 180 pendings), and we might hit 500 before August, but that will be the peak for 2022.

The market won’t keep getting worse – it will just taper off for rest of the year as buyers AND sellers lose interest. Instead, we’ll be talking about the playoffs and our first-place Padres going to the World Series!

Inventory Watch

Buyers thought this was a holiday weekend, and sellers didn’t!

It was the week that the actives-to-pendings ratio between La Jolla and Carlsbad crossed back over the ideal 2:1 range, which is what we have observed to be the sign of a healthy market in the past.

Last week: 354/202, or 1.75

This week: 388/177, or 2.19

Here is the breakdown by price range:

NSDCC Actives and Pendings

Price Range
Active Listings
Pending Listings
A/P
0-$1.5M
46
22
2.1
$1.5-$2.0M
57
41
1.4
$2.0-$3.0M
91
59
1.5
$3.0-$4.0M
52
26
2.0
$4.0M+
148
35
4.2

The high-end firmly believes that it takes longer to sell the uber-expensive homes, so they are happy to wait for their magic moment – and typically have the resources to do so.

I wrote offers for buyers around the $2,000,000 range, and both listing agents claimed to have multiple offers.  It may take longer to reach an accepted offer these days as listing agents wait for better deals to arrive, so let’s check back on the pendings in a couple of days.

This is what Plateau City looks like – plenty of unsolds preferring to sit, than reduce.

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The $0 – $1,500,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
9
$832/sf
35
36
Jan 10
9
$766/sf
28
29
Jan 17
13
$773/sf
26
27
Jan 24
9
$818/sf
15
29
Jan 31
14
$752/sf
14
31
Feb 7
13
$774/sf
12
32
Feb 14
11
$826/sf
12
35
Feb 21
7
$889/sf
17
38
Feb 28
12
$888/sf
17
33
Mar 7
9
$1,017/sf
21
33
Mar 14
14
$847/sf
18
31
Mar 21
8
$912/sf
26
36
Mar 28
10
$914/sf
25
28
Apr 4
10
$782/sf
33
34
Apr 11
19
$733/sf
21
36
Apr 18
16
$795/sf
28
34
Apr 25
18
$891/sf
27
30
May 2
22
$822/sf
23
31
May 9
24
$887/sf
17
46
May 16
25
$783/sf
22
25
May 23
29
$782/sf
23
29
May 30
30
$782/sf
24
28
Jun 6
34
$763/sf
25
28
Jun 13
33
$802/sf
29
29
Jun 20
48
$774/sf
28
22

The $1,500,000 – $2,000,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
8
$842/sf
52
36
Jan 10
13
$751/sf
28
29
Jan 17
16
$736/sf
33
27
Jan 24
16
$801/sf
17
27
Jan 31
15
$696/sf
14
34
Feb 7
15
$765/sf
17
34
Feb 14
10
$726/sf
19
38
Feb 21
19
$715/sf
15
39
Feb 28
9
$660/sf
12
46
Mar 7
16
$789/sf
15
46
Mar 14
17
$837/sf
8
44
Mar 21
18
$867/sf
11
43
Mar 28
14
$838/sf
15
48
Apr 4
18
$762/sf
25
42
Apr 11
23
$774/sf
15
39
Apr 18
22
$792/sf
17
41
Apr 25
18
$810/sf
20
41
May 2
27
$809/sf
17
37
May 9
33
$837/sf
17
46
May 16
39
$793/sf
19
44
May 23
43
$793/sf
22
44
May 30
36
$843/sf
23
36
Jun 6
43
$817/sf
23
41
Jun 13
49
$845/sf
24
42
Jun 20
57
$817/sf
24
41

The $2,000,000 – $3,000,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
18
$1,080/sf
127
43
Jan 10
23
$1,038/sf
85
37
Jan 17
26
$1,044/sf
80
41
Jan 24
28
$1,015/sf
37
42
Jan 31
22
$949/sf
38
47
Feb 7
26
$919/sf
29
42
Feb 14
22
$997/sf
37
49
Feb 21
21
$966/sf
33
54
Feb 28
26
$905/sf
32
57
Mar 7
29
$922/sf
28
57
Mar 14
20
$852/sf
26
58
Mar 21
17
$928/sf
26
60
Mar 28
34
$927/sf
12
65
Apr 4
32
$927/sf
20
69
Apr 11
44
$910/sf
17
62
Apr 18
48
$997/sf
19
66
Apr 25
42
$1,092/sf
18
73
May 2
54
$995/sf
19
70
May 9
61
$910/sf
20
73
May 16
64
$977/sf
22
69
May 23
82
$953/sf
25
59
May 30
78
$951/sf
27
56
Jun 6
94
$963/sf
27
58
Jun 13
98
$961/sf
28
70
Jun 20
91
$935/sf
32
59

The $3,000,000 – $4,000,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
19
$1,230/sf
90
26
Jan 10
22
$1,210/sf
76
25
Jan 17
19
$1,207/sf
86
23
Jan 24
17
$1,129/sf
92
24
Jan 31
21
$1,172/sf
70
22
Feb 7
19
$1,169/sf
67
25
Feb 14
19
$1,234/sf
65
28
Feb 21
21
$1,279/sf
69
28
Feb 28
22
$1,214/sf
64
25
Mar 7
27
$1,295/sf
60
24
Mar 14
27
$1,201/sf
65
27
Mar 21
23
$1,282/sf
69
31
Mar 28
25
$1,253/sf
67
30
Apr 4
30
$1,199/sf
61
27
Apr 11
32
$1,174/sf
62
31
Apr 18
33
$1,216/sf
68
31
Apr 25
33
$1,219/sf
63
33
May 2
37
$1,164/sf
50
36
May 9
33
$1,132/sf
57
32
May 16
40
$1,119/sf
53
32
May 23
40
$1,135/sf
57
27
May 30
40
$1,178/sf
61
28
Jun 6
43
$1,224/sf
56
28
Jun 13
48
$1,184/sf
52
28
Jun 20
52
$1,117/sf
53
26

The $4,000,000+ Market:

Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
100
$1,884/sf
128
30
Jan 10
105
$1,864/sf
113
29
Jan 17
109
$1,763/sf
110
34
Jan 24
105
$2,130/sf
114
42
Jan 31
102
$2,114/sf
118
53
Feb 7
109
$2,000/sf
108
50
Feb 14
108
$2,005/sf
109
47
Feb 21
113
$2,008/sf
103
43
Feb 28
111
$1,991/sf
101
47
Mar 7
115
$1,904/sf
91
39
Mar 14
121
$1,893/sf
95
43
Mar 21
116
$1,905/sf
97
44
Mar 28
104
$1,966/sf
97
59
Apr 4
103
$1,929/sf
97
56
Apr 11
106
$1,906/sf
97
55
Apr 18
108
$1,874/sf
100
51
Apr 25
116
$1,829/sf
97
38
May 2
117
$1,781/sf
95
32
May 9
116
$1,831/sf
96
36
May 16
124
$1,854/sf
91
39
May 23
125
$1,855/sf
92
36
May 30
129
$1,706/sf
93
39
Jun 6
131
$1,740/sf
89
33
Jun 13
132
$1,793/sf
86
38
Jun 20
148
$1,772/sf
84
35

NSDCC Weekly New Listings and New Pendings

Week
New Listings
New Pendings
Total Actives
Total Pendings
Jan 3, 2022
17
14
152
164
Jan 10
39
18
167
142
Jan 17
34
29
179
145
Jan 24
41
40
173
157
Jan 31
43
40
173
182
Feb 7
43
38
179
179
Feb 14
44
49
168
193
Feb 21
51
38
180
197
Feb 28
39
39
179
205
Mar 7
54
37
191
195
Mar 14
48
51
195
196
Mar 21
39
46
178
207
Mar 28
53
50
185
224
Apr 4
46
40
190
220
Apr 11
61
39
221
213
Apr 18
41
46
224
212
Apr 25
50
43
224
205
May 2
76
37
256
196
May 9
59
46
262
207
May 16
78
48
286
200
May 23
61
42
312
192
May 30
54
44
307
183
Jun 6
70
31
338
183
Jun 13
60
41
354
202
Jun 20
71
25
388
177

Inventory Watch


The number of active listings keeps climbing, which is expected. The likelihood of getting the list price wrong has probably never been higher, given that sellers have been planning their move for months – and they are going to test it out to see if they can get lucky, rather than adjust the price pre-maturely.

With more choices available, the buyers are reacting, and the number of pendings increased 10%.

As a reminder from last week, we used to have 900-1,000 active listings at this time of year:

It will be irresistible for people to wait-and-see where this goes. But ‘it’ is not going anywhere. Until there is some sort of boomer liquidation event, which at the soonest will be 5-10 years from now, the demand is going to out-strip the supply and keep the pressure on pricing.

I encourage readers to click on the ‘more…’ button (below) and examine the individual stats by price range.  If there is going to be a supply-and-demand problem, it will be on the high-end, where the active-to-pending ratio is back to 10:1. But those sellers are the most equipped to handle it.

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Inventory Watch

Once we got past the Memorial Day weekend, the unsold listings continued their climb. Here’s how the first week in June compares to previous years:

NSDCC Listings, First Monday in June:

Year
# of Active Listings
# of Pendings
# Actives Over $2M
# of Pendings Over $2M
2018
914
410
488
102
2019
1,005
365
523
85
2020
514
338
405
88
2021
607
360
270
166
2022
338
183
268
119

These are the stats from an ultra-low inventory environment, which we’ve never seen before. I’m sure there are sellers out there who haven’t had a showing yet.  Consider the current market conditions, and act accordingly!

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Inventory Watch


I mentioned how overshoot is part of the program.  It will be a miracle if the sellers’ expectations can adjust quickly enough to salvage the rest of the selling season.

It’s probably never been so hard in the history of real estate to get the list-price right!

Even if the price is ‘right’, a new listing might not sell right away just because of buyers wanting to wait-and-see for a while longer. Sellers won’t know what to do, so they won’t do anything and they will wait-and-see too. Only a few might drop their price enough to make a difference.

Welcome to Plateau City – we’ve arrived!

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Inventory Watch

The overshoot part of the frenzy is unavoidable.

The pricing of the new listings was calculated on sold comps from when the frenzy was hotter and sellers were getting big pops over the list prices.

Back then, you didn’t have to spruce ’em up as much, you got away with sloppy pricing, and the listing agents insisted on 60-day rentbacks for free, ‘coming soon’ teasers for weeks, and showing times based on when the listing agent felt like fitting it into their schedule.

The pricing part has been correcting – it’s the rest of the package that needs adjustment:

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Inventory Watch

Everyone complained that we had no inventory….well, we have more now!  But the 286 active listings today is still well under the 349 actives that we had last year at this time, and more listings should cause more sales.

We’ll see if the slight pause in the market can be attributed to the usual graduation-season malaise, or if a full-blown buyers’ strike is underway.

This isn’t the only measuring stick, but it appears that pricing has been settling down:

Most sellers are going to wait it out, or cancel their listing – neither of which will satisfy the buyers who are hoping for a major adjustment.

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Inventory Watch


While it would be logical to think that anyone who is going to sell in 2022 would be expediting their plans due to higher mortgage rates, there still hasn’t been a big surge. We had one little pop when the weekly new-listings count hit 76, but they were back down to 59 this week – and the pendings have risen since.

As we head into the graduation season, and then into the peak vacation season, we might find that the 2022 selling season has already concluded. Maybe we’ll get a surge in July?

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