NSDCC Listings, YTD

NSDCC Listings, Jan 1 – May 15

Can we use statistics to describe the market conditions today?

This chart above helps a little. Even though the number of listings is drastically lower than it used to be, apparently the market has been adjusting – mostly by price!

I mentioned that it seemed like everything is priced $200,000 more than it was last year, and the median list price reflects a similar number. Buyers aren’t taking the full plunge though, and the 85% SP:LP is a sign of normalizing (buyers having more negotiating power).

The frenzy that caused virtually everything to sell is long gone, and we’ll probably be back to having 30% to 40% of the listings not selling. This chart doesn’t show the number of refreshed listings where agents cancel and then re-input right away to “refresh” it – but be on the lookout. We will be seeing more of those this year.

Statistically, the market conditions look fairly healthy. Though different than the recent past!

Inventory Watch

The NSDCC inventory has gotten off to a hot start in 2024 – it’s already at the level it was at in July of last year!  As long as the pending keep up….oh wait.

Well, maybe there will be a surge of new pendings on the way? There was a late-summer surge last year, and if it was going to happen, it really should happen earlier this year too.

Pricing of the unsolds probably won’t change much:

The last time mortgage rates were 7% was 22 years ago when local home prices were about one-third of what they are today. As a result, the only semi-relevant comparisons are to last year!

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Frenzy Monitor

This chart shows identifies the hot spots, and not-so-hot spots, as compared to last year. Southeast Carlsbad and Carmel Valley both have substantially more pendings this year, and NW Carlsbad and Encinitas have roughly double the number of actives and where potential gluts might be forming.

Overall, there are 25% more active listings, and 21% more pending listings – so much of the additional inventory is getting soaked up.

Pricing is about the same as last year:

NSDCC Median List Price of Active Listings

May 15, 2023: $3,749,400

May 15, 2024: $3,895,000

NSDCC Median Sales Price in May

2023: $2,362,500 (178 sales)

2024: $2,310,000 (68 sales so far)

After last month’s eye-popping 200 sales, there was some hope that this month would be equally productive. But it looks like we’ll be fortunate to match last May’s count.

Disincentive Program

A new $3,000,000+ listing hit the MLS this week that was offering a 1/2% commission to the buyer’s agent.

They also noted that to show the property, buyer-agents needed to submit proof of funds (bank statement) and pre-approval letter plus a 24-hour notice was required. Only one photo was included and no videos or matterport. In other words, they aren’t interested in incentivizing the buyer-agents – instead, they will make it as tough as possible for them to earn a living here.

It’s ok with me if you want to publicly embarrass yourself in front of your fellow realtors.

But know that you are also contributing to the demise of buyer-agents.

When other agents see that you have no regard, or respect, for what buyer-agents do, then they will learn from you – and assume that this must be how the future of commissions is going to play out. Then they will do the same thing.

Because ‘commissions are negotiable’ is such a touchy subject, nobody in the business talks about it. But we should discuss the role of the buyer-agent, and how they will soon be extinct – which is NOT good for anyone involved, especially the buyers.

There are two other new listings this month (of 63) that are offering NO buyer-agent commission.

The agents are happy to note that it will be negotiated in the offer. Your list prices are ridiculously high, you make it hard to show, and you refuse to offer ANY commission rate? Why is that a sound strategy? How does that make any business sense?

If the listing agent is unwilling to commit to paying any commission, then they must be thinking that the eventual rate negotiated with the offer will be less than 2% – because if the listing agent was willing to pay at least 2%, they’d would publicize it as a feature, wouldn’t they?

These are listing agents that prioritize the torture of the buyer-agents over what is best for their seller. It’s a very strange control/dominance issue – and they should really seek some help with that before they take another listing.

As the market slows down – and the commission debacle will be a contributing factor to the slowdown – the buyer-agents will be needed more than ever. Will listing agents adjust in time, or just blindly run off the cliff like a lemming? I don’t have a lot of faith in the former.

San Diego Is Still #1

San Diego Case-Shiller Index, Non-Seasonally Adjusted

Month
San Diego CSI
M-o-M chg
Y-o-Y chg
Jan 22
384.13
+2.5%
+27.2%
Feb
401.44
+4.6%
+28.9%
Mar
416.45
+3.8%
+29.9%
Apr
425.90
+2.3%
+28.5%
May
427.80
+0.5%
+25.2%
Jun
424.83
-0.7%
+21.6%
Jul
414.03
-2.6%
+16.5%
Aug
402.48
-2.8%
+12.7%
Sep
393.80
-2.1%
+9.5%
Oct
390.61
-0.7%
+7.6%
Nov
385.40
-1.5%
+4.9%
Dec
380.09
-1.3%
+1.6%
Jan 23
378.79
-0.4%
-1.3%
Feb
384.46
+1.6%
-4.1%
Mar
394.05
+2.5%
-5.3%
Apr
401.90
+2.0%
-5.7%
May
409.32
+1.9%
-4.3%
Jun
413.72
+1.1%
-2.3%
Jul
416.68
+0.7%
+0.6%
Aug
419.08
+0.5%
+4.1%
Sep
419.35
+0.0%
+6.4%
Oct
418.82
-0.1%
+7.2%
Nov
416.36
-0.6%
+8.0%
Dec
413.45
-0.7%
+8.8%
Jan 24
421.34
+1.9%
+11.2%
Feb
428.26
+1.6%
+11.4%

The local Case-Shiller Index is back to the peak of May, 2022!

The next two readings will likely be +2.0% month-over-month.

The 20- City Composite posted a year-over-year increase of 7.3%, up from a 6.6% increase in the previous month. San Diego continued to report the highest year-over-year gain among the 20 cities with an 11.4% increase in February, followed by Chicago and Detroit , with an increase of 8.9%. Portland, though still holding the lowest rank after reporting two consecutive months of the smallest year-over-year growth, had a significant increase in annual gain of 2.2% in February.

More MLS Remarks

Think of the monumental change needed in the listing agent’s psyche to get them to stop scolding the buyer-agents and give some respect – but instead they are shorting the commissions too. If you blow off the buyer-agents, then you’re on your own – and the vast majority of agents will have no clue how to find their own buyers.

From the confidential remarks in recent MLS listings:

Buyer did not perform! Seller wants it gone. Seller is going to request your EMD deposit released upon receipt! $25K No games! This home will not go VA, or FHA because of the state of repair. Seller has unfinished work do to other buyers wanting him to stop work because they were buying AS-IS. Sellers are not going to do any repairs. Enter house thought side door do not open front door, BE VERY CAREFUL! Very unsafe! Good luck!

Broker/Agent does not guarantee accuracy of permits, square footage, lot size, zoning, rent control, use codes, schools, and/or other information concerning the condition or features of the property provided by the seller or obtained by public records. Buyer is advised to independently verify the accuracy of all information through personal inspections, the City, and with appropriate professionals.

Please confirm with the listing agent (via text) that the front door is locked properly before leaving property.

Be timely, turn off lights and lock all doors behind you.

Do not contact agent to hold open house or ask to market the property online or through Social Media.

I have tried to be available to everyone for showings and conversations, however I am finished answering questions on what the seller’s want. Thank you for your hard work.

Seller accepted an offer prior to coming to market. There is not a bedroom on the first floor. Please do not request a showing if your clients need a downstairs bedroom. Please do not request to hold open, we hold open houses internally with our team.

NO MORE SHOWINGS OR OFFERS ! MULTIPLE OFFERS RECEIVED!

new double pain windows

Photos along with offer instructions coming soon. Do not contact agent to hold open house or ask to market the property online or through Social Media.

Must provide POF / Lender letter for showing. Only qualified buyers. Listing agent at all showings. No lockbox. Dog on property.

Strictly showing by appointment only.

Only selling 1/2 of the building. No HOA has been formed for the building. 1 bedroom is tenant occupied with lease ending 7/31/24. A/C only in 1 bedroom. Tenant interested in staying.

Home has video cameras inside and out. Seller will be removing Lutron Casseria smart home (switches) and replacing with standard. Security cameras, wine fridge and outside fridge do not convey.

Multiple generous offers already received, all are due by noon, Monday 4/29. You must register your showing using the Sentrilock box or physically attend the open house on Sunday 1 to 4, 4/28. DO NOT USE SHOWING TIME. Touring the property will be a condition of acceptance along with loan cross qualification by (the listing agent’s lender). Please send in your best and highest offer with POFs and loan letter. Offers that do not have all the requirements or are sent to the wrong email, will not be considered. Seller reserves the right to select the best one offer or send out multiple counter offers. Seller to select services.

You’re open? Sure gives the feeling that they plan to work you over on the buyer-side commission.

How about 3%? Oh, you want to negotiate – make it 4% then!

 

The Latest in Encinitas Ranch

It was so great to start the tour today with Pete’s new listing on the Encinitas Ranch Golf Course whose owners succumbed to the problem at hand. They get hit by golf balls, so provide a barrier and live with it.

This is way better than the alternative where potential buyers have to wonder about the impact. Know this – when a golf ball hits your roof, it sounds like a bomb went off.

More Actives & Fewer Sales

There isn’t as much fluff as we used to have in the pre-pandemic days.

In March 2019, there were 6,026 homes for sale, but only 2,554 sold, which means there were lots of sellers and agents on the open market who were in price-discovery mode – and they found out what the market wouldn’t bear.

We’re heading back that way again.

For the last three years, we’ve been spoiled by maximum demand (caused by low inventory combined with low rates). But now that both are creeping upward, there will be sellers/agents who are overly-optimistic and don’t factor the negative impact into their equation.

Last month’s ratio of 2,871/1,950 = 1.47 is still better than the 2019 numbers of 6,026/2,554 = 2.36, but don’t be surprised to see an upward trend of unsold listings forming over the next few months.

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