Number of Millionaires

How does the market keep levitating?

The number of U.S. dollar millionaires has risen sharply since the beginning of the 21st century.

In 2000, there were 14.7 million millionaires worldwide, a fourfold increase in twenty years (300 percent). If we compare this figure with the fight against extreme poverty, the number of people below the global poverty line – which today stands at $2.15 a day – has declined at a much slower rate. At the turn of the century, there were 1.7 billion people living in extreme poverty, compared with around 700 million today, a drop of around 60 percent.

The United States is home to by far the largest contingent of dollar millionaires: 22.7 million in 2022, representing 6.7 percent of the country’s population. Next on this list is China with 6.2 million (0.4 percent of the population), while France completes the podium with 2.8 million (4.2 percent of the population).


Mortgage rates have come down 1% in the last few weeks, and the casual observers are hoping it means that the Big Turnaround will commence in the Spring of 2024.

But for a full-fledged frenzy to break out, home prices would have to drop too.

We’ll never learn much from the median sales prices by themselves. But the SP:LP ratios demonstrate the off-season trend of buyers driving harder bargains, which is the solution for lower prices too.

We’re probably not going to see the whole market drop in price (i.e., big dips in the median sales prices) because the superior properties should hold their value better with the impatient buyers.

But those who don’t need the perfect house will likely have better luck next year with getting a deal. We only flirted with an over-list frenzy briefly this year, and in 2024 we not see many, if any, 100% months.

Seller vs Buyer Markets

A columnist reflected on history to help measure whether it’s a seller’s market, or a buyer’s market. I like it!

House-hunting’s transformation includes several market trends including people moving less often, consumers accessing detailed market info, near-instant cash buyers and tighter lending standards. Maybe the buyer/seller-market math should morph, too.

From 1990 through 2006, just before the bubble burst, California was a “buyer’s market” in 49 percent of all months and a “seller’s market” 17 percent of the time — using the traditional 6-month/3-month template and Realtor data.

Looking at the past 12 post-crash years — assuming you’d want to match that pattern — a buyer’s market would be 3.25 months-plus of supply and a seller’s market would be 2.25 months or less.

This evolving gap in homebuying supply is another reminder of today’s steep house-hunting challenges.

Link to the Full Article with data

Currently there are 359 active detached-home listings between La Jolla and Carlsbad, and last month there were 140 sales. The 359/140 = 2.56, which, by the new definition, is pretty close to a seller’s market!

Higher Rates = All-Cash Market?

Could rates get so high that it turns into a cash-only market? It’s heading that way.

Of the 118 closings this month between La Jolla and Carlsbad, 45% were all-cash, and it’s competitive. My buyers made a cash offer that was $101,000 over list on this one and didn’t make the final round. There were 13 offers.

Interest rates are based on trading levels in the bond market. Bond traders began their day looking at significantly weaker levels (i.e. higher yields/rates) versus last Friday, but for no apparent reason. Actually, it would be more fair to say “for no new reason.”

Reasons for the rising rate momentum are apparent and ongoing. Decades-high inflation required decades-high rates to fix. The higher rates are supposed to be damaging the economy more than they have. Until that damage shows up, rates have a green light to continue higher.

As more and more market participants abandon their preconceived notions regarding an imminent rate reversal, the upward momentum takes on a certain glacial quality. In other words, it’s self-sustaining, often resulting in days like today where rates look like they’re acting on some obvious catalyst despite the absence of any such news.

Mortgage rates were already new 7.4% by the end of last week and today’s increases bring the average lender closer to 7.5%. This is the highest since late 2000. Lower rates are still available for certain scenarios and discount points, but many scenarios are also seeing higher rates.

Link to Mortgage News Daily

Inventories Soaring Elsewhere

It looks like the San Diego market is surviving the current conditions quite well, while the rest of the country is being crushed by soaring inventory. The Californians must be staying home, and those feeder towns are suffering!

Any town that has a +50% increase year-over-year would be feeling it – which includes virtually every area that people relocating from here would consider.

These are ideal conditions for those who are willing to sell here, and move out-of-state.  Sell here, and go rent there for a year or two? Might as well 1031 your house here, and defer those capital-gain taxes!

Metro Populations:

Link to Bill’s Article

Inventory Watch – Under $3,000,000

Actives = green, Pendings = blue

Last week, a reader suggested that we highlight the Under-$3,000,000 market.

It is astonishing that in an area of 300,000 people, there are fewer than 100 houses for sale priced under $3,000,000 (and none under $1,195,000).

Our standard for a healthy market is a 2:1 ratio of actives to pendings, and today it’s under 1:1….there are more pendings than actives!

The Under-$3,000,000 market is doing great, and if it weren’t for the buzz around higher rates and the uber-frenzy at the start of 2022, we’d be on our merry way through the spring selling season.

But last year’s first quarter was NOT normal:

If someone you know is thinking of selling their home, tell them to go ahead – the market is fine.


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