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Inventory Watch

This might have been the week that the frenzy peaked.

Last week:

Actives: 334

Pendings: 362

This week:

Actives: 357

Pendings: 344

It’s only one week, but it did seem like there were quite a few escrows that fell out which would be the primary cause of the shift.  Let’s not jump to too many conclusions just yet – let’s see how the counts play out over the next couple of weeks.

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Inventory Correction

On Monday, I got my two counts backwards for 2020 & 2021, which made it look like the number of new listings was picking up.

But it was wrong – here is today’s counts of new listings in the first quarter:

New NSDCC Listings in the First Quarter:

2017: 1,296

2018: 1,230

2019: 1,278

2020: 1,081

2021: 931

If we’re usually around 1,250 new listings in the first quarter, then in 2021 we are 25% under normal – which would push for a stronger seller’s market in any given year.  But with demand increasing at the same time, it’s a wild mix.

There is more desperation among the buyers who don’t have a house here yet – they are struggling just to get a piece of the pie. It limits how many existing homeowners can move up or down, because they are always comparing homes and prices to what they already have.  Without those existing homeowners moving, it’s restricting the supply mostly to just those who are willing to leave town – which we’re finding isn’t as many people as needed.

Inventory Watch

Did you get concerned about the pending index falling another 10% last week?

The U.S. housing market is suffering from its lowest supply in history, and that is taking an increasingly hard toll on sales.

Pending home sales, a measure of signed contracts on existing homes, fell a wider-than-expected 10.6% in February compared with January, according to the National Association of Realtors. Sales were 0.5% lower year over year.

“The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift,” said the Realtor’s chief economist, Lawrence Yun. “But contracts are not clicking due to record-low inventory.”

The pendings between La Jolla and Carlsbad are doing just fine. In spite of the total number of NSDCC homes for sale being fewer than usual, people are still buying at a torrid pace:

Our market was helped by having more homes for sale.

New NSDCC Listings in the First Quarter:

2019: 1,278

2020: 922

2021: 1,081

After the first two months of this year, the total number of NSDCC new listings was 26% behind 2019.

But we had a big March, and the number of new listings in 1Q21 is only 15% behind those in 2019.

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Inventory Watch

We’re at the point where any of the year-over-year comparisons will be hampered by the initial shock of the pandemic in March-May of 2020. But the number of active listings was steady through March, 2020, so let’s compare the $$/sf on the list prices to see how much they’ve gone up in 12 months:

NSDCC Detached-Home Listings, End of March

Price Range
2020 Actives
Avg. LP$/sf
2021 Actives
Avg. LP$/sf
% Chg in $/sf
0-$1.0M
40
$475/sf
7
$478/sf
+1%
$1.0M – $1.5M
114
$528/sf
30
$648/sf
+23%
$1.5M – $2.0M
126
$660/sf
38
$727/sf
+10%
$2.0M – $3.0M
163
$734/sf
54
$839/sf
+14%
$3.0M+
244
$1,165/sf
212
$1,379/sf
+18%

Rates were about 1/4% higher last March, so about the same and sellers don’t care much about those.

But with the Under-$1.0M market now virtually non-existent, the $1.0M to $1.5M market is now our entry level and where first-timers, move-uppers, and downsizers are all in fierce competition!

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Inventory Watch – Full Vertigo!

On Friday morning I had a bout with vertigo, which is about the only thing that has sent my head spinning more than this market! Thankfully Richard and Donna are very capable and jumped in to ensure there wasn’t any disruption to the business, for which I am very thankful!

Once the initial shock wore off, it meant I just sat around and rested all weekend, which gave me more time to ponder. This was the equation that I found most shocking:

Year
Number of Listings Between Jan 1 – Feb 28
Number of Those Marked Pending By March 22
2020
706
296
2021
566
408

Home buyers came into 2021 fully prepared to buy a home, and didn’t need the usual warm-up period – they came out firing! The 20% decline in the number of new listings juiced the market further, and now virtually everything is selling.

Higher rates might spoil the party, but they will need to get up near 4% before having real impact. Any surge of inventory will affect the immediate neighborhood, but not do much to the overall feeling that sellers are in full control for the next few months….at least!

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Inventory Watch

I’ve joined the San Diego Association of Realtors, and have dual citizenship for the time being. Though the SDAR and the NSDCAR allegedly have a data-sharing agreement where all realtors in the county have access to the same information, there are some discrepancies.

Today’s listing counts between La Jolla and Carlsbad:

NSDCAR

Actives: 341

Pendings: 369

SDAR

Actives: 332

Pendings: 333

It appears that NSDCAR and the CRMLS have some of the townhouses and attached homes included, so I’m going to use the SDAR counts from now on.  Either way though, the market is hot – and should get hotter as the spring season really kicks in!

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Inventory Watch

The new NSDCC listings coming on the market have slowed up over the last two weeks – only 54 and 43.

Last year at this time we had 79 and 106!  We also had 12% fewer pendings!

Week
New Listings
New Pendings
Total Pendings
Feb 1
55
74
306
Feb 8
45
66
316
Feb 15
60
65
332
Feb 22
71
71
338
Mar 1
54
67
346
Mar 8
43
75
366

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Inventory Watch

My theory this week to explain what’s happening today?

The ultra-low mortgage rates are the problem.

Specifically, the decline in mortgage rates over the last two years have caused more of the existing homeowners to refinance, rather than move.  In the graph above, you can see how the supply of homes for sale has declined in a similar trend to mortgage rates. Low rates have spurred more interest from buyers, but the drop in supply hampers their ability to take advantage of it.

If and when rates rise, it won’t change the problem with low supply because the refinanced homeowners have packed it in – they’re not moving no matter what happens to rates. They are locked in forever!

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Inventory Watch

We are getting close to a remarkable event – having more pendings than actives.

Here’s the current scorecard – 359 Actives, and 338 Pendings!

NSDCC Actives and Pendings

Price Range
Active Listings
Avg $$/sf
Pending Listings
Avg $$/sf
0-$1.0M
6
$424/sf
33
$640/sf
$1.0M – $1.5M
22
$677/sf
70
$605/sf
$1.5M – $2.0M
45
$686/sf
87
$621/sf
$2.0-$3.0M
65
$871/sf
68
$759/sf
$3.0M+
224
$1,404/sf
87
$1,020/sf

WE HAVE MORE PENDINGS THAN ACTIVES IN EVERY CATEGORY EXCEPT OVER-$3,000,000!

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Inventory Watch & Contest Winner!

We are up to 276 new NSDCC listings in January, which is 22% under last year’s count of 353 listings!

Here are the guesses – our winner is lifeisradincbad, congratulations!

234 – REOAndre

270 – lifeisradincbad

289 – Derek

305 – Joe

311 – Old Man

318 – Doughboy

325 – Haile

333 – Kris K.

347 – Big Crazy

353 – TominLaCosta

383 – Skip

387 – Amy

396 – Curtis (distance to centerfield wall at Petco!)

404 – Majeed

420 – BigDave

422 – Colleen

425 – Rob Dawg

432 – Tim

440 – Ben

If the total keeps climbing and gets up to 280, Derek will win the same prize – tickets to a Padres game and the U.S. Open.  The slower start is probably due to the covid/nothing-else-to-buy/waiting-for-Prop-19 combo, all of which might open up a little in the coming weeks.

Last year at this time we had 222 active NSDCC listings priced under $2,000,000.  Today we have 77!

 

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