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!
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.”
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:
Active Listings, 2018
Active Listings, 2019
$1.0M – $1.5M
$1.5M – $2.0M
If rates had not come down this year, our landing would have been much more turbulent!
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!
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.
"Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community... more "
by Ann Romanello
"Jim educated us, helped us find the perfect house, and then negotiated us a great deal. I would hate to be sitting across the negotiating table from ... more "
"Jim is thorough and will be brutally honest about the homes he shows you. He provides great service and follows through until the very end and even ... more "
"I highly recommend Jim as a buyer’s agent. Working with Jim, we closed this week on a San Diego condo. Jim prepared a list of comparable sales to ... more "