The political circus hasn’t caused the Big Distraction to our local marketplace like I thought. The pendings and sales have been rolling along and it doesn’t feel any softer than it usually does this time of year.
The fourth quarter will most likely be similar to how it was last year. Any chance of mortgage rates dropping substantially flew out the window and we’re going to live with rates in the 6% range for the foreseeable future.
But what is likely to happen is a surge of inventory in early 2025.
Here is one way to anticipate the future. The recent new listings keep coming:
NSDCC New Listings Of Detached-Homes, July 1 to September 30
2018: 1,290
2019: 1,247
2020: 1,390
2021: 998
2022: 758
2023: 669
2024: 774 (+16%)
For the first time in post-frenzy history, the number of new listings is growing – and it’s been trending in that direction all year.
It has seemed like the supply of homes for sale has been so depleted that a 20% increase would be easily digested. But now we will be looking at another +20% on top of the additional inventory we had this year.
Smart sellers will want to list their home for sale early in the spring selling season.
I think it’s going to explode in January – look out!
The drop in percentages is 8.5% over two years, which sounds like a full-blown liquidation event if you ask me. These are national stats so those in the more-reasonably priced areas and/or areas that didn’t appreciate much lately probably wouldn’t care as much about losing their low rate.
One of these years, there is going to be a real surge of inventory. Next year? I say probable.
NSDCC Total Number of Listings, Jan 1 – Sep 30
2018: 3,998
2019: 3,969
2020: 3,714
2021: 3,254
2022: 2,570
2023: 2,137
2024: 2,445
This year has had +14% more listings than last year, so hopefully we’re past the bottom.
Who is rooting for 3,000-ish for the selling season next year? Besides me! đ
Last week I received a call from the Compass Chief of Staff to President of Growth & Communications. His job was to notify all of the Compass agents who published something about our new program that took the same name as the now-defunct program at Zillow. Does Zillow recognize the powerhouse that Compass has become and try to parlay the opportunity into something positive for both companies? Of course not. Instead, they threatened to sue Compass for using their old slogan that they don’t use any more.
While Jacob and I were chatting it up, I had to ask, “Of the 30,000 Compass agents, how many calls do you have to make on this topic?” His answer? Six. Only six Compass agents in the country are doing some sort of website/blog! He was shocked when I told him that we get 1/3 of our business from blog readers.
Here is the same blog post I ran when the MMM program was first announced – now with Make Me Sell as the new name:
The NAR Clear Cooperation Policy states that every listing must be inputted into the MLS within one business day after it is advertised publicly. The idea is to ensure that every agent has a chance to sell it.
Our boss is leading the effort to end the CCP (see above).
Anywhere (Coldwell Banker, Sotheby’s, etc.) also agrees that the CCP has its flaws, and that it needs to be revised or ended.
Asked Thursday about Anywhereâs proposal to modify Clear Cooperation, Reffkin said that âalthough I would prefer a policy that replaces the one-day listing requirement with 60 days as the DOJ has publicly asked NAR to do, I support Anywhereâs recommendation to move it to âat least a few weeks.’â
Reffkinâs mention of the DOJ refers to a July 29, 2020, letter from a U.S. Department of Justice attorney to a lawyer representing NAR. In the letter, the DOJ attorney proposes two modifications to the Clear Cooperation rule: extending âfrom one business day to sixty days the time by which listing brokers must submit listings to the MLSâ; and eliminating âthe exception to the Clear Cooperation Policy for âoffice exclusives.’â
Reffkin said that he applauds âAnywhere for advocating for homeowner rights.â
A survey was sent to agents on the topic. My response:
I think the CCP should end. No matter what the rules are, agents will game the system. For example, agents input their listings onto the MLS to reach the waiting buyers but then don’t allow other realtors to show. Then a few days later, they are marked pending. It has always been like this – no matter what the rules are, agents will game the system in their favor to maximize their own profits.
The San Diego region has always had agents who cheat the system – it’s been like this since I started. Let’s just be honest with consumers and with each other – it is the WILD, WILD WEST!
There isn’t a real threat of physical harm, but the environment will rough you up mentally and emotionally. Hire an agent who recognizes the pitfalls, and can help manage the experience as best they can.
Statistics are quirky – there are always things that happen that defy explanation. Look at the uptick in inventory in today’s reading, and note that the same thing happened last year!
The number of pending listings has been riding above last year’s pendings count, which is interesting.
Having more actives could trigger a wait-and-see feeling in buyers, but there should be some tolerance because the inventory has been so much lower than ever before. It appears that having 24% more active listings still falls into the tolerable category because the number of pendings is higher today:
NSDCC Actives and Pendings, Last Week Of September
The 475 actives sounds like a boatload compared to the last three years, but instead of being scared off, buyers are just ignoring the 174 that have been on the market for more than 60 days.
These are examples of public or confidential remarks by listing agents to help sell their listings:
Information in this listing may or may not be correct.
Buyer’s required to submit “financial pre-qualifications” to Listing Agent for review to verify ability to close escrow before disturbing Owner for tours.
RARE OPPORTUNITY TO PURCHASE AT COMING SOON PRICE at $4,999,000 PRIOR to GOING ACTIVE WHICH WILL OCCUR ON 7/25/24 AT WHICH TIME PRICE WILL INCREASE TO $5,1999,000.
Tell your clients to put their best foot forward, please do not ask me to reveal confidential offer info received.
Please do not permit entrance of parties not associated with the scheduled showing. The property is in an Irrevocable Trust; a 45-day Notice of Proposed Action to beneficiaries is required; the seller is hopeful that this process will be completed quickly; the buyer agrees to close escrow within __ business days after notification from seller that this process is completed.
***LUXURY AUCTION SELLS IT AGAIN! CONTACT LISTING AGENT TO LEARN MORE!***
THIS IS THE ONE YOU HAVE BEEN WAITING FOR!
Include all documentation in one email, DO NOT SEND IN MULTIPLE EMAILS.
Opportunity for this land is big in the area it’s in because there is plenty of room to grow.
VERIFCATION OF FUNDS/PRE-APPROVAL REQUIRED PRIOR TO SHOWINGS.
Permits status of ADU is unknown as owners are deceased.
MAJOR FIXER. PRICE REDUCED TO REFLECT CONDITION. BUYER TO DEPOSIT NON REFUNDABLE 10% EARNEST MONEY DEPOSIT.
Regarding the distinguished koi fish: they can convey with the sale upon proof of your buyer’s true interest in the fish. They have been raised by the owners and their continued well-being is of top concern. If continuing the life of mature koi fish with love and grace is not for your buyer, please indicate in your offer that the fish should be re-homed prior to COE. The pond stays as-is
This is more than just a home; it’s a lifestyle.
Welcome to your new neighborhood in Carlsbad. Rarely available, maybe once in your lifetime.
BIG PRICE IMPROVEMENT! ACT FAST!!
This house brags like a new build.
Painter/handyman has been booked several times but postpones. So, we are going ahead with the listing. You are welcome to slip in.
BUYER MUST HAVE INSURANCE QUOTE w/ offer.
Appointments to be confirmed once a buyer representation agreement is submitted.
In La Jolla and Rancho Santa Fe – where being priced to sit is an art form – the active listings are piling up and are at their highs of the year. On the other hand, Carmel Valley is cruising along with their actives-to-pendings ratio is well under our 2:1 healthy mark.
More from our trip to Barcelona, which had protests against tourists right before we arrived but they were very accommodating for us. Here you will see an artistic bent to the garage-door defacement brigade!
P.S. You’re going to be hearing a lot more about Kayla in the very near future!
The presidential election is less than 60 days away and even if one of the candidates is a clear winner at Tuesday’s debate, the fight will get nasty from here on out.
The distraction is likely to cause potential home buyers to want to wait-and-see. Thankfully, the hope of lower mortgage rates will keep more than just the bottom-feeders in the game – but the serious buyers will have to dig out a deal, because the sellers are being tough on price. Why? They have comps!
It was noted earlier how the market shifted in the middle of May.
In the last 90 days, there have been 531 closed sales between La Jolla and Carlsbad. Their stats:
Median LP: $2,399,000
Median SP: $2,370,000
Median Days on Market: 14
Any casual observer will quickly conclude that the market looks to be in fine shape.
Just the fact that there have been 531 sales sounds pretty good!
But it is easy to miss. What can we learn from the active (unsold) listings?
To derive some conclusions about the overall market conditions, let’s examine the 83 actives priced under $5,000,000 that have been on the market for more than 60 days. After they have been on the market for 2-3 weeks, the showings dwindle down to zero or close, so the market is talking if they’re listening and want to do something about it.
Of the 83, there are 26 who haven’t lowered their price, and three that have raised their price! That’s 35% whose motivation is so low that they’re going to wait until the right buyers come along.
For the most part, those who have lowered their price didn’t do much. We are now in the post-summer soft-and-getting-softer environment, so a meaningful price reduction needs to be 10% or more to get anyone’s attention. Here are samples of the current NSDCC active listings:
Those who have dumped more than 10% and are still unsold are asking themselves, ‘what’s it going to take?’. We just saw that 20% of last month’s sales were still closing OVER their list price – what gives?
The difference is the condition of the home.
The most amazing frenzy of all-time lasted for two years and spoiled everyone. Not only did homes not need to be fixed up much, but the pricing could be sloppy too and yet virtually every house was selling. There were times when 70% to 80% of the homes sold were closing over their list price!
We’ve had an astounding change of market conditions in a relatively short period of time to think that we went from that 70% to 80% to now 20% or less closing over list. It means those 20% are the really spectacular buys, and those seemingly premium listings now need to have aggressive pricing and/or be substantially improved recently to have a shot at getting their price.
Sellers need to be doing everything better. Do more improvements (especially on curb appeal), better staging, premium photography/video, more-attractive pricing, and hire the best agent you can find!
How do you know about the agent? They are talking about the shift, and what to do about it!
