Inventory Watch

Buyers looking at homes priced in the upper half (today’s NSDCC median list price is $2,395,000, the highest that I can remember) are probably thinking they can go to sleep for the rest of the year.  There are about the same number of active listings priced over $2,000,000 now as there were last year.

What about the Under-$1,000,000 market?

Last year at this time, we had 110 active listings priced under $1,000,000.  Today we have 60!

Those buyers should keep looking. At this rate, there won’t be much left under a million next year!

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Inventory Watch – Soft Landing

Nick was nice enough to include my quote in the Journal this morning:

The Fed’s U-turn on rates this year has delivered “the ultimate soft landing for the housing market,” said Jim Klinge, a real-estate agent in Carlsbad, Calif. Housing markets in the second half of last year felt “like a ghost town.”

At the same time, however, heady home-price gains in recent years have dulled the potential boost from a decline in borrowing costs.

Falling interest rates extend buyers’ purchasing power. A general rule of thumb holds that a one-percentage-point drop in interest rates is equivalent to a 10% reduction in the costs of purchasing a home.

“If you are thinking about buying a home, that drop in rates is very important,” said Brian Wickert, president of Accunet Mortgage in Waukesha, Wis. “But the drop in rates has been gobbled up by the increases in price caused by higher demand and lower inventories.”

Link to WSJ.com

Our inventories have been lower around the NSDCC (see below), but even when combined with lower rates, our NSDCC sales have been flat, with average and median pricing up 4% to 5% recently.  Tomorrow’s Case-Shiller Index for San Diego County will show about a 2% to 3% increase year-over-year.

NSDCC End of October:

Price Category
Active Listings, 2018
Pendings
Active Listings, 2019
Pendings
Under $1.0M
114
64
66
52
$1.0M – $1.5M
204
51
160
54
$1.5M – $2.0M
159
57
177
67
Over $2.0M
523
81
506
76
Totals
1,000
253
909
274

If rates had not come down this year, our landing would have been much more turbulent!

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Inventory Watch

Check out these quirky stats.

In our first two categories, the average list pricing pricing was virtually identical just three months ago:

NSDCC Active Listings

Date
# of Actives Under $1,000,000
Avg. LP/sf
# of Actives $1M to $1.5M
Avg. LP/sf
Jul 22
94
$494/sf
189
$498/sf
Jul 29
97
$493/sf
192
$494/sf
Oct 21
70
$470/sf
165
$551/sf

In the Under-$1,000,000 category, the average list pricing has dropped 5% since July.

In the $1,000,000 – $1,500,000 category, it’s gone up 12% since July!

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Inventory Watch

Let’s flashback four months to the height of the selling season to check on prices:

Price
May 13 #Actives
Avg LP/sf
#Pendings
Oct 14 #Actives
Avg LP/sf
#Pendings
0-$1M
102
$470/sf
78
82
$478/sf
54
$1M-$1.5M
201
$497/sf
131
171
$546/sf
94
$1.5M-$2M
159
$599/sf
72
177
$608/sf
79
$2.0M+
507
88
517
80

The MLS doesn’t want us to know what’s happening to pricing above $2,000,000, but the average list pricing under $2,000,000 is higher today than it was four months ago.

The price point that everyone thought would have the most trouble this year ($1M-$1.5M) due to the tax reform is actually doing the best.  The average list price has risen 10% in four months!

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Inventory Watch

The end-of-summer market feels similar to last year, with just a few more pendings over the last five weeks. In spite of the high prices, people don’t seem interested in selling much though.

There was a 13% drop in new listings, year-over-year:

NSDCC Last Five Weeks:

Year
New Listings
New Pendings
2018
434
246
2019
379
257
Diff
-13%
+4%

When is the best time to sell? When there is little or no competition, and rates are in the 3s!

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Inventory Watch

We had quite a rebound this week in new pendings! The previous count was 46, and we had 59 NSDCC houses go pending in the past week!

Buyers may have figured that the inventory isn’t going to get better, and, indeed, the weekly count of new listings dropped a ton.  There were 102 new listings the previous week, but only 67 in the last week (-34%).

Tomorrow: The latest reading of the Case-Shiller Index!

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Inventory Watch

Even though mortgage rates have improved this year, the NSDCC pendings and sales are struggling to keep up with where they were in 2018 (Jan-Aug closed sales = 1,969 in 2018, and 1,925 in 2019):

With rates being 21% lower than last year, there really should be at least 5% more sales this year – but there have been 2% fewer.  Sellers are holding out!

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Inventory Watch

This is an interactive graph that compares the number of higher-end new listings per month.

We had a little uptick in July, but we settled back down in August. We only had five more listings last month than we did in August, 2018:

Here’s how it looks over ten years – we sure have more high-enders than we used to!


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Inventory Watch

People ask, “How’s the market?”

Generally-speaking, the graph above reflects how today’s market conditions compare to last year.

Let’s also compare the weekly number of new pendings too (those marked pending in the past seven days). Since last Monday, we’ve had 44 new pendings, compared to the 59 we had in the same period last year when mortgage rates were already above 4.50%.

But this is an individual sport, and it depends on how you play it.

This seller probably thinks the market conditions are fantastic. They lowered their price 4% after ten days on the market, and then dumped another 6% to clinch a quick cash sale:

But how many sellers are willing to dump and run during their first two weeks on the market?  Not many, and what the graph above shows is that sellers are holding out a bit longer instead.

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