Last week it was noted how we saw a big surge this time last year, and maybe we could expect the same boost of pendings this week?
Oops, the pendings count stalled:
NSDCC Weekly Total Number of Pendings
1st Week of April
2nd Week of April
3rd Week of April
4th Week of April
5th Week of April
1st Week of May
2nd Week of May
We might be at peak selling season, which would be 2-4 weeks earlier than last year?
Want another sign?
At the end of February we wondered if the market for NSDCC houses priced under a million could go away altogether – the inventory had shrunk down to 67 listings, like they were in the beginning of last May.
But for the last two weeks, we’ve had over 100 houses for sale priced under $1,000,000.
This is a real estate blog, and I’m going to plow ahead. Let’s keep living!
Here’s a fascinating example of the current market conditions between La Jolla and Carlsbad, and it shows that it’s not just about price.
Today there are 62% more homes for sale priced under $1,000,000 than there were last year – you can buy a cheaper home! But buyers want quality – look at how the average list-price-per-sf of the pendings relates to the actives:
NSDCC Actives vs. Pendings
# of ACT
# of PEND
This is why pricing will likely plateau – people are willing to pay these prices if they can just get a suitable home. They are making their decisions based on location, condition, and schools, and are willing to pass on inferior homes even though they could save some money.
Buyers are decisive too, and are willing to act when they see the right fit. Look at how the average days-on-market compares:
NSDCC Actives vs. Pendings
# of ACT
# of PEND
The higher-end buyers are being very deliberate, but the rest are acting!
Last year’s selling season was a little bumpy but was solid through May – and then dropped off once we got into summer and rates started rising.
The wait-and-see pattern kicked in as 2019 opened, but with rates having eased, we’re on our way now.
If mortgage rates will determine our fate, what can we expect for the rest of 2019? It looks like we should see mortgage rates stay in the low-4% range for now. The 30-year fixed rate is typically about 1.75% above the ten-year bond yields, which today is around 2.52%.
This is from the WSJ:
I’m going to guess that our pendings will peak again in May this year, but have a more gradual descent through the rest of 2019 than we had last year.
The relaxing of the average NSDCC list-pricing might help too:
NSDCC # of Actives / Avg. LP-per-sf
The MLS doesn’t support analyses once the counts get too high, so I don’t have any pricing for the Over-$2M category (but should be around $1,000/sf). The number of $2M+ actives has only grown from 453 on February 25 to 472 today. There are 98 pendings too!
The surge continued this past week, with the current pendings count rising from 302 to 324, which is a 7% increase. Last year, the pendings topped off the previous week and then dropped for four weeks. With this current burst, the pendings count is only seven percent behind last year.
The battle lines are drawn right around the $2 million mark, with the number of actives priced over $2,000,000 being 19% higher than in early January.
But the Under-$2,000,000 market looks great:
NSDCC Actives and Pendings
List Price Range
There probably isn’t much trickle up? But the 5.0 isn’t bad, and the 95 pendings is a 53% increase from a month ago!
Statistics can be quirky, or maybe St. Patrick’s Day is a real holiday? The new listings dropped off 18% this week, just like in the 3rd week of March last year!
In 2018, the number of pendings hit a peak in the third week of March, and then dropped four consecutive weeks. But it’s probably more a result from so many closings from the initial surge of activity following the Super Bowl.
The average LP/SF is hanging tight. We are at, or near, 12-month highs in all categories, and I don’t expect any change. Sellers aren’t motivated enough to really drop their price, instead they will just wait.
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