Big Mo in SE Carlsbad

To demonstrate further how the momentum is building, let’s look at SE Carlsbad.

4th Quarter SFR Closed Sales Between $2,000,000 and $3,000,000 in the 92009:

2023: 9

2024: 23

The optimism coming off the election helped, because ALL of these went pending since November 5th:

Only one had to take a real haircut on price – so far, two sold for full price and one sold over list!

If four of the pendings close this month, it will mean that the 4Q24 sales were 3x more than last year!

True, those could have been the last buyers ever for the 92009. But doesn’t there have to be potential buyers who decided to wait-and-see what 2025 has in store? I think so, and around the 92009, there will be a strong set of recent comps to support the valuations!

It reminds me of the 4th quarter of 2012 which snuck up on us because the short sales and foreclosures had not cleared yet. The NSDCC sales in 4Q12 were 44% higher than in the previous fourth quarter, and the following year, 2013, was the hottest year of the decade.

It looks like 2025 will be sizzling too!

Frenzy Monitor – Big Mo

There are 20% more active listings, and 21% more pendings than we had last December – a monthly trend here in the fourth quarter of 2024 as the demand is keeping up with the supply.

Compare it to August when there were 26% more homes for sale year-over-year, but 17% fewer pendings!

The momentum going into the new year is terrific – it’s going to feel like the frenzy is back!

Inventory Surge in 2025

My Reasons Why NSDCC Inventory Will Surge in 2025:

1. Been trending that way – there has been 15% more NSDCC homes for sale this year than in 2023.

2. Since October 1st, there have been 90 more listings that cancelled than last year. They’ll be back!

3. Prop 19 was fun while it lasted – more of those who inherited a home will want to cash out.

4. Credit card debt is over $1 trillion for the first time. More current homeowners will lighten the load by paying off all their bills and downsize to cheaper home (probably out of state).

5. The affluent fleeing the country – if you have nothing tying you down here, then there are other choices.

6. The 5th anniversary of Covid is a few months away. Those who put off moving can go ahead now!

7. California politics drives people away. Gav’s $25 million to fight Trump? Might be the last straw for some.

8. I don’t have the statistics but more baby boomers should be shuffling off this mortal coil.

9. We’re all older – if you’re going to move, do it while you still can, physically!

“Buying a home in 2024 was surprisingly competitive given how high the affordability hurdle became,” said Skylar Olsen, Zillow chief economist. “More inventory should shake loose in 2025, giving buyers a bit more room to breathe.”

https://www.zillow.com/learn/housing-market-predictions/

It’s going to feel like another frenzy in the first couple of months of 2025 – join in, won’t you! 😆

2025 Price Forecasts

As usual, the pricing forecasts for next year are varied. How do we know what to expect?

The average and the median is +3.55%.

Two entities picked +2.3%.

Just go with the highest at +10.8%?

Moody’s, the leader of the Doom Squad, just couldn’t say flat. They had to go with -0.4%.

None of these supplied their math or any reasoning to justify their guesses.

We do have this going for us:

“The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail, like lowering housing costs for all Americans. He will deliver,” said Karoline Leavitt, spokeswoman for the Trump-Vance transition.

NSDCC 2024 Detached-Home Annual Sales:

Median Sales Price: +9% YoY

Average $$/SF: +7%

Median $$/sf: +10%

Sales +2% and we still have the whole month of December to add!

Pick Two

There is a saying in real estate that buyers can pick two of three: Size, Condition, Location.

I’m going to modify it slightly, because price should be in there.

Home Buyers – Pick Two: Price, Condition, Location.

  • If a buyer wants a home in fantastic condition and in a great location, then expect to pay a premium.
  • If a buyer wants to get a great price, then they can expect to sacrifice on condition and/or location.
  • If you don’t care about location, keep driving further out until you can find a great house at a great price.

Getting all three is miracle work – buy a lottery ticket while you’re at it.

Here’s my version for home sellers:

Home Sellers – Pick One: Price, Condition, Convenience.

  • Want your price? Then spend big money on a tune-up and vacate the home for max showings.
  • Selling the home in its current condition? Hard to say when it will sell, and for how much.
  • If you want the proceeds on a certain date, then sell to a flipper or auction the home.

There are many variables but you get the idea. Those who have a specific need can sacrifice in other areas to get the results they want. Typically, you don’t get everything!

Buyer-Agent Commissions, Nov

As of August 17th, home sellers are not required to pay the buyer-agent’s commission. Listing agents are forbidden from mentioning any compensation being offered to the buyer-agents in the active listings, but the CRMLS requires that the amount that was paid is posted in the listing at closing.

CRMLS runs the MLS for north county. Agents can also belong to the San Diego Association of Realtors which does not require posting of the buyer-agent commission paid.

I’m adjusting the timing to show these reports on a monthly basis so today’s data is for the 201 sales between October 16th and November 30th.  There were 83 of the 201 who posted the commission paid to the buyer-agents by the seller. We can’t assume that the other 118 sellers (201-83) didn’t pay a commission because reporting isn’t required.

I haven’t heard of any buyers yet who got stuck having to pay their buyer-agent because the seller refused to pay. Undoubtably, there are buyer-agents who were paid a partial fee by the seller and then the buyer made up the difference – that’s the intent of the buyer-broker agreement being required now.

These are the reported commissions paid to the buyer-agents between La Jolla and Carlsbad:

Erosion is underway. It’s because some agents are weak and desperate, as I mentioned in April, and the buzz in the realtor community is that agents are quiting en masse. I’ll be nice and call it ‘retiring’. So those buyers who want an agent who charges less can certainly find them – and they will get the quality of service that they deserve.

But virtually all of the sellers are paying some commission to the buyer-agent, and about half are paying more than 2%.

This isn’t the world we wanted. This isn’t the world we asked for. This is what 12 jurors in Missouri thought you deserved (as did the attorneys who charged $100,000,000+ for prep work and a week in court).

Happy Thanksgiving!

We are eternally grateful for all the generous support of Mama’s Kitchen. This year we distributed 92 pies and had another $1,700 in contributions that will enable Mama’s to provide about 1,740 medically-tailored meals to the critically ill in San Diego!

https://mamaskitchen.org/

Thanks so much for your support, and Happy Thanksgiving!

Thank you Eddie89 for alerting us to the rankings (the cash donations were counted as extra pies):

 

San Diego Case-Shiller Index, September

The year-end slide of the local non-seasonally-adjusted Case-Shiller Index looks like it will last twice as long this year. In 2023, it was a relatively-brief three months, but this year the pricing turned in mid-summer.

Expect the same result in 2025 – the prime properties will fly off the market at premium prices and the junkers, OPTs, bad locations, and poorly-presented homes will languish through the second half of the year as they get picked over by the bargain hunters.

San Diego Case-Shiller Index, Non-Seasonally-Adjusted

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 0.3%, while the 20-City and 10-City Composite reported monthly rises of 0.2% and 0.1%, respectively.

“Home price growth stalled in the third quarter, after a steady start to 2024,” says Brian D. Luke, CFA, Head of Commodities, Real & Digital Assets. “The slight downtick could be attributed to technical factors as the seasonally adjusted figures boasted a 16th consecutive all-time high.

“We continue to see above-trend price growth in the Northeast and Midwest, growing 5.7% and 5.4%, respectively, led by New York, Cleveland, and Chicago,” Luke continued. “The Big Apple has taken the top spot for five consecutive months, pushing the region ahead of all others since August 2023. The South region reported its slowest growth in over a year, rising 2.8%, barely above current inflation levels.”

Truth Telling

Yesterday realtor Paul commented that he too has seen the Zillow views and saves get re-jiggered:

I have screenshots from a few listings that were showing a certain number of views. The next day the view count decreased almost 1K views. Next day it was down a few hundred more. It slowly crept back up in the next few days. It was a very popular property which is why the views were quite high. I lost all trust from Z when I saw this happening. If there is a reasonable explanation I’m open to hearing but it would need to be something like the internet got hacked or the power grid blew a gasket. Wtf lol.

So I guess we can consider Zillow and Redfin completely unreliable sources of accurate data. Let’s consider them entertainment websites where you can find your real estate porn.

Who’s left?

I spot-checked these and they line up with the MLS data:

It’s incredible that local pricing has been holding up as mortgage rates surged from 3% to 7%!

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