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Inventory Surging?

This is an example of the hysteria being whipped up by the pseudo-experts. They tend to grab fake data, jump to conclusions, and then spread it everywhere.

Here is the tweet with comments – he says the +31% is the change between March and April:

https://twitter.com/housereports/status/1521952871490621440

I don’t know where he gets his information, but it isn’t from the MLS:

Listings & Sales, Monthly

Location
March Listings
April Listings
% Chg
March Sales
April Sales
% Chg
SD County
3,916
3,780
-3%
3,233
3,053
-6%
NSDCC Detached
281
269
-4%
207
222
+7%

He says the San Diego Listing Inventory surged +31% between March and April, when it actually dropped on the MLS. Why would he say that? I don’t know, but he sells his data now so that may have something to do with it.

I don’t know how he is measuring ‘demand’, but the San Diego County sales did decline 6% between March and April.  But look how close the sales count is to the listing count – we are selling practically everything that comes to market, for pete’s sake.  If the listings decline, so will sales.

Is he talking about the active listings?

This is how it looks on InfoSparks.  The M-o-M change is +7% (last year was +5%), and the actual count of 2,616 active listings in April is bleak compared to previous years (12,652 in April, 2019!):

None of the facts are suggesting an inventory surge in San Diego County.  We would welcome one!

NSDCC Number of Listings, First 1/3

Yesterday we saw how the NSDCC active listings shot up from 224 to 256 in one week!

The count was at 190 just a month ago.

But to keep it in perspective, let’s compare it to previous years:

NSDCC Active & Pending Listings, First Week of May

Year
NSDCC # of Active Listings
NSDCC # of Pending Listings
A/P Ratio
2019
970
364
2.6:1
2020
732
208
3.5:1
2021
333
372
0.9:1
2022
256
196
1.3:1

It is a startling change in the marketplace when choices are so few. But relative to the corresponding number of pendings, the health of the market looks fine, in spite of much-higher pricing.

(We’ve considered a 2:1 ratio between actives and pendings to be a healthy market)

We hoped there would be a surge of new listings in 2022 as the pandemic winds down, but it’s not happening.  Here are the total counts of new listings in the first third of the year:

NSDCC New Listings, January-April

Year
NSDCC # of New Listings
Median List Price
2019
1,771
$1,579,000
2020
1,370
$1,699,000
2021
1,372
$1,896,500
2022
981
$2,500,000

The monthly counts this year are 221 listings in January, 215 in February, 279 in March, and 266 in April. Fewer listings in April, than in March? No wonder the median list price is 32% higher this year than last!

Inventory Watch

In the last week, there were 76 new listings between La Jolla and Carlsbad, which was the most since last August.  The 37 new pendings were the fewest since mid-January!

Rob Dawg suggested that we track the list prices by quartile:

What this graph doesn’t reflect is the hyper-optimism of recent sellers – have you noticed how high-priced the new listings have been over the last couple of weeks? It will be why the number of active (unsold) listings should keep rising, because they didn’t get the memo and will wait for weeks/months to test out their optimism.

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NSDCC April Listings

Remember in April, 2020 when everyone was scared to death to list their house for sale because they didn’t want to catch the dreaded covid from strangers coming through? When agents were required to wipe down the house after every showing?

It was the month that there was a big drop-off in new listings – we only had 288, which felt like half the usual amount, and we wondered how the real estate market would survive.

Last year there was a nice rebound…..but look where we are this year so far:

NSDCC April Listings

Year
NSDCC Number of April Listings
Median List Price
2017
485
$1,479,000
2018
469
$1,495,000
2019
494
$1,584,000
2020
288
$1,659,000
2021
387
$1,875,000
2022
227
$2,399,000

This month, we’ve only had about eight listings per day, so it’s unlikely that we will reach the same number of listings we had during the worst of the killer covid. The demand is certainly higher than it was in April, 2020, and yet nobody wants to sell.

While it feels like there are more listings coming on the market recently, doesn’t it seem like most are outrageously priced? You can’t blame sellers who have noticed that there are no for-sale signs around them and their zestimates are rocketing skyward.

Two thoughts:

  1. Buyers aren’t going to see much of a price break due to higher rates.
  2. The inventory may never bounce back to where it used to be.

Last April we had 359 sales, and this April we’ve had 200 sales with two days to go plus late-reporters.

It’s been reported that pending and closed sales for March were down, and that mortgage applications are dropping too.  Of course, the talking heads are blaming the impending doom-and-gloom on the higher mortgage rates, and suggesting that the bubble will be bursting any minute.  But the decline is almost entirely due to the fewer choices available.

At this point, it sure seems like the local NSDCC inventory is going to stay remarkably low!

Inventory Watch

An interesting phenomenon that has been occurring more lately is the delay in offers being submitted.

I’ve heard agents say it’s because people are being smarter about waiting until closer to the offer deadline so the listing agents have less time to shop them around, and that buyers are being more deliberate in checking their finances.

However, the more time that passes between the initial open house and the submission of offers, the less likely buyers will pay wildly over the list price….or even offer at all.

The pool of buyers who are willing to pay $500,000-$1,000,000 over list price has to be diminishing, and will it be long before the only buyers left are those who want to pay a fair price?

Typically there are a flurry of closings in the last week of the month. If there isn’t a corresponding uptick in new pendings this week, we could see the graph (at the top) look remarkably different next Monday!

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Inventory Watch

Part of the problem with trying to analyze any of the current data is that there is no precedent – any previous assumptions have little or no relevance to today’s market because of the lack of homes for sale.

We keep hoping there is going to be a surge of new listings , but it’s still not happening – we had more new pendings than new listings again this week. We would need a flood just to catch up with last year, which was less than half of what we had in the covid-affected era!

NSDCC Actives & Pendings, Mid-April:

Year
NSDCC Active Listings
NSDCC Pending Listings
2018
825
331
2019
925
341
2020
684
192
2021
335
358
2022
224
212

Plus, almost half of today’s 224 active listings are priced over $4,000,000!

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Inventory Watch

I think we can say that the statistics are starting to reflect the current environment, which is being muddled by a few factors:

  1. There are so few listings that sellers (and listing agents) are pushing the list prices….but buyers have had enough, and the inferior properties aren’t selling like they used to.
  2. Sellers and agents are skipping the spruce up/staging extras, and buyers are being picky.
  3. The wait-and-see strategy is addictive, and once buyers adopt it, it’s hard to get off the fence.

This is the first time during the selling season that there are more actives than pendings (221 vs 213).  If it ever gets back to the normal 2:1 ratio, it’s going to feel like the sky is falling!

It is rare that a seller decides to sell and then lists their home for sale the same day.  Usually, it’s a plan that has been in the works for months, and any last-minute adjustments – especially on price – are also rare.  Don’t be surprised if the pricing over the next two months reflects the pricing of the last two months.

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Inventory Watch

It is natural to have more closings during the last week of the month, and the dip in the pendings count wasn’t as bad this month as it was last month.  This is where you will see the first signs of any concern on behalf of buyers about interest rates, etc.

Everyone was talking about them at open house over the weekend.  But we’re still going to sell my listing for well over the list price today!

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NSDCC 1Q Listings

The 2022 inventory is off to a slow start – and I don’t expect it to improve much, in spite of record pricing:

Year
# of 1Q Listings
Median List Price
2018
1,230
$1,592,500
2019
1,277
$1,575,000
2020
1,082
$1,712,500
2021
985
$1,899,000
2022
682
$2,575,000

The 682 listings this year was 31% lower than in the first quarter of last year, and about half of what we had prior to the pandemic. No wonder that the median list price was 36% higher, year-over-year!

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