The Frenzy of 2020

Mortgage rates hit an all-time low yesterday!

Combine the improved purchasing power with the covid-delayed selling season and the lowest inventory in recent history, and we have full-blown frenzy conditions. Look at how July wound up:

NSDCC July Sales & Pricing – Preliminary

Year
# July Sales
Avg. $$/sf
Median SP
July Mortgage Rate
# Listings, 1st Half
2012
258
$365/sf
$850,000
3.55%
2,545
2013
297
$418/sf
$930,000
4.37%
2,790
2014
271
$451/sf
$1,018,000
4.13%
2,714
2015
321
$458/sf
$1,025,000
4.05%
2,871
2016
271
$504/sf
$1,110,000
3.44%
2,999
2017
261
$528/sf
$1,240,000
3.97%
2,725
2018
273
$544/sf
$1,280,000
4.53%
2,701
2019
281
$612/sf
$1,300,000
3.77%
2,725
2020
342
$620/sf
$1,420,000
2.99%
2,293

We had 342 sales, and there will be some late-reporters. Wow!

Has pricing caught up with the market conditions yet?

Inventory Watch

In the last week, we had 104 new NSDCC listings, and 101 pendings!

The hot action is trickling up.

We’ve had more pendings than actives in the $1.0M – $1.5M range since July 6th, and now the $1.5M – $2.0M range is feeling it too, with a ratio of nearly 1:1 today:

Price Range
# of NSDCC Active Listings
# of Pendings
Avg. LP/sf
$0-$1.0M
39
69
$531/sf
$1.0M – $1.5M
112
154
$559/sf
$1.5M – $2.0M
129
119
$719/sf
$2.0M – $3.0M
143
69
$856/sf
$3.0M+
288
54
$1,186/sf

We’re down to only 689 houses for sale between Carlsbad and La Jolla, which is 33% fewer than in the first week of August last year. The median list price is $2,680,000!

(more…)

Del Mar One-Story With View

Our new listing of a gorgeous one-story home west of the I-5 freeway in Del Mar!

This is the primary residence of a long-time custom-home builder, and it shows!  There are several high-end finishes throughout the home, including the craftsman front door, deluxe custom kitchen with breakfast bar, hardwood floors, and a terrific master bath bathed in natural light!  Custom fireplace, dual-pane windows, and interior laundry room too. Enjoy the 8,600sf lot with sparkling pool, herb garden and pano easterly views day and night – wow!

12911 Biscayne Cove, Del Mar 92014

3br/2ba, 1,518sf  YB: 1972

LP = $1,495,000.  (we represent the sellers)

https://www.zillow.com/homedetails/12911-Biscayne-Cv-Del-Mar-CA-92014/16765774_zpid/

Value Buy!

Our new listing of a 2005-built home on a culdesac for only $739,000! The Zillow history shows that the house was rented the first of April, and as soon as the new tenant moved in, she told the landlord that she was not going to pay rent because of the eviction moratorium. The owner decides to cheap-sell it with a non-paying tenant inside, but no takers. The ensuing hysteria around the house caused by people thinking they might be able to buy one for $100k under value eventually caused the tenant to move out.




https://www.zillow.com/homedetails/247-Glendale-Ave-San-Marcos-CA-92069/61238627_zpid/

Looming Foreclosure Crisis?

Our reader ‘just some guy’ sent in this article and quipped about these writers who insist on promoting a foreclosure scare due to the pandemic. But it is worth noting because it could become a self-fulfilling prophecy just due to the lack of a counter-argument being published at large.

This article is quick to point out that there isn’t a problem yet:

Even after the foreclosure moratorium expires, homeowners on a government-backed loan will have a forbearance option to fall back on, so there’s no need to panic just yet. But digging into mortgage-delinquency data shows how much water is building behind the dam that is these government backstops.

In January, just 3.22 percent of mortgages were in delinquency. By May, that number shot up to 7.76 percent — about three points shy of where the delinquency rate peaked during the financial crisis of 2008, which was at 10.57 percent.

Prior to the the pandemic in March, the number of mortgages in forbearance was fewer than 100,000. Currently, there are roughly 4.5 million mortgages in forbearance, although this is obviously a reflection of homeowners having the option of forbearance, but it gives you a sense of the scope.

Not every homeowner in forbearance is past due on their payments; some went into forbearance as a precaution, or just because they could. Some homeowners were in forbearance and have since gotten out, either because there didn’t end up being a need or they got a new job. For June, 21 percent of mortgages in forbearance were current on their payments, but as the pandemic goes on, more will enter into serious delinquency that would normally trigger a foreclosure.

With the forbearance option available for up to a year, economists have baked into their models a wave of foreclosures in the spring of 2021, which they say would cause a very rare drop in U.S. home prices.

I haven’t heard anyone predict falling home prices in 2021, and Zillow is forecasting a 5.7% increase.

We also know that the loan-modifications that worked last time will get employed again before banks lose a penny.  The only people they might foreclose on are homeowners with sufficient equity, but if it comes to that, then those folks will sell their house instead and make out nicely.

It does add an interesting component to next year’s selling season though, which should be a humdinger!

BTW, I don’t have any insider info on the rumored Compass/Keller Williams merger.  Even if it’s been discussed, it’s hard to believe the egos involved would allow for it.

Selling Season Delayed

This graph shows how we’re making up for lost time, with showings almost double what they were last year.

The closed sales are starting to pop too.

We did have one more business day this year than in 2019, but the NSDCC sales this month are already ahead of recent years, and we have three days to go:

NSDCC July Sales & Pricing – Preliminary

Year
# July Sales
Avg. $$/sf
Median Sales Price
2016
271
$504/sf
$1,110,000
2017
236
$533/sf
$1,253,250
2018
259
$545/sf
$1,300,000
2019
258
$604/sf
$1,300,000
2020
272
$631/sf
$1,410,927

We’re probably going to have 300+ sales this month, and pricing is stronger than ever.

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