The NYT has another article lamenting the drop in the number of homes for sale, and offered some reasons, like covid reluctance, sellers skittish about finding their next home, forbearance relief, the lack of building new homes, and people keeping their old home as an investment property when they buy a new one.
But who cares about inventory when we’re having MORE SALES THAN EVER.
It’s true that the number of new listings this year is about 23% behind where it was last year at this time.
The other day I compared just to 2020, but here’s a look at the last ten years:
NSDCC Closed Sales Jan 1 – Feb 15
# of Sales
Median Sales Price
% Change, YoY
We haven’t had this big of a jump in number of sales AND median sales price to start the year since the Frenzy of 2013 bled into early 2014 when we had a 32% increase in sales and +19% in median sales price. Back in 2004, we had a 26% increase in the median sales price (from $635,000 to $799,000), but the number of sales dropped from 253 to 209.
This is the new reality – more people chasing fewer homes for sale.
Buyers who might think we’re going to get a pullback because rates have gone up are going to get a good lesson on who’s in charge here. Sellers don’t care about rate hikes, lack of inventory, or your lease expiring. They just want their money, and if they don’t get it today, they will wait until they do.
This morning we have more homes in escrow than we have for sale!
NSDCC Detached-Home Listings
# of Listings
Median List Price
Once upon a time I was discussing the actives/pendings relationship with local agent Peter B. He agreed that a 2:1 ratio of actives to pendings was a sign of a healthy market. If 2:1 was healthy, what is 1:1?
One thing that’s happening is that the action is rising into the upper price ranges. Today we have 94 homes in escrow that are priced over $3,000,000, which I doubt we’ve ever had before.
If we don’t see a surge of more listings, the pendings could extend its lead in the coming days/weeks!
Historically the market has felt healthy and balanced when we’ve had a 2:1 ratio of actives vs. pendings.
Remember when the Ranch was 10:1 for years? Now look at the market – especially on the lower-end:
NSDCC Actives and Pendings
Town or Area
Carlsbad, a town of 110,000+ people, has 29 houses for sale?
It’s probably going to get crazier too as the traditional selling season opens up and we see a few more listings trickle out. It would take a flood of new listings to cause the market to slow down now.
Either we are undervalued, or we’re getting more popular….and maybe both!
The price of a San Diego home could increase by more than 8 percent this year, more than anywhere else in the nation, according to a forecast released Tuesday.
Real estate analysts CoreLogic said the price of a single-family home in San Diego County will increase 8.3 percent from November 2020 to November 2021. That means the median price of house in San Diego could be around $776,000 by the end of the year.
CoreLogic said main reason is a lack of homes for sale that will push up prices as buyers fight it out. A secondary factor is income growth for highly skilled positions in San Diego County.
It isn’t out of the ordinary for San Diego homes to increase a lot in a year — in fact, single-family homes here were up 9.5 percent last year — but the forecast is noteworthy because CoreLogic predicts most markets will see price appreciation slow in most markets.
The only regions that the real estate analysts say will come close to climbing as much as San Diego will be: Miami, predicted to increase 3.2 percent; Los Angeles, up 3.2 percent; and Washington, D.C., up 2.9 percent. CoreLogic said the total national increase should be around 2.5 percent.
“San Diego is just one of those markets that has had a lot of income growth and not enough supply to meet demand,” said Selma Hepp, CoreLogic deputy chief economist.
She said San Diego is an example of what has been seen a lot across the nation: High-wage workers who have been able to work from home have seen fortunes increase during the pandemic while low-wage workers lost income because their jobs were among the first shuttered during shutdowns.
“Income inequality is being exacerbated by all of this,” Hepp said.
This home looks great on paper. It’s a single-level 3,057sf home on an 0.39-acre lot in a secluded part of Encinitas, listed for $1,600,000. It drew a crowd too – the agent had appointments to show on Friday, Saturday, and Sunday and was fully booked for three days (I got the last appointment on Sunday afternoon, and there were still a few parties milling around then).
By the time we got there, she already had multiple offers.
But it closed under list price at $1,595,500.
Do some forensic viewing and see if you can tell why it didn’t sell for more:
Remember when it seemed to make sense that because home prices were escalating, people would be buying smaller homes? Boy, did Covid-19 change that – now the larger homes are driving the market, which suggests that the move-up market has come alive:
(To keep a healthy sample size, let’s combine October and November)
NSDCC Sales and Pricing Over/Under 3,000sf
Oct + Nov
# of Sales Under 3,000sf
# of Sales Over 3,000sf
Rapidly-increasing prices aren’t slowing down sales….and may be speeding them up!
Could the increase in larger-home sales be due to more inventory?
No – actually we have had fewer Over-3,000sf homes listed this year than in 2019:
NSDCC Total Listings between Jan-Nov
# of Listings Under 3,000sf
# of Listings Over 3,000sf
The larger-home sales were already benefiting from multi-gen buyers needing a place for Mom. Add to that demand the move-uppers who may not need a place for Mom yet, but if they sense it might be coming in the near future, then might as well buy bigger now – and maybe get granny to throw in some of her dough!
I agree that homes selling quicker – evidenced by the lower market times – means crazy price increases. Sellers can get away with pricing their home at 5% to 10% above comps and buyers still come running.
How crazy is it?
More than half of our sales are finding their buyer in 14 days or less!
NSDCC November Sales
Total # of Sales
Sales with <14 DOM
% of Sales <14 DOM
Let’s also note that by the time we’re done, there will be close to 300 sales this month, which is unheard of for November!
Health, unemployment, stairs, taxes, finances, politics…….selling your home is becoming the answer for everything!
More than 2.5 million American homeowners have stopped paying their mortgages, taking advantage of penalty-free forbearance periods offered by lenders.
What happens when the free pass fades away next year?
Not much, and certainly nothing approaching the flood of foreclosures that defined the Great Recession, according to the emerging consensus among economists. While some homeowners are sure to feel the pain of forced sales, housing experts increasingly expect the end of forbearance to be a non-event for the gravity-defying housing market.
That’s largely because home prices have risen sharply during the coronavirus pandemic. As a result, homeowners who find themselves unable to pay their mortgages when their forbearance periods end likely will be able to sell for a profit, rather than going into foreclosure.
“If they have equity, they can always sell off the house and pay the mortgage,” says Ralph DeFranco, global chief economist at mortgage insurance company Arch Capital Services. “It’s not a great outcome, but it’s less terrible than letting the bank take it and sell it.”
Your only real power as a service professional is your ability to withhold your services by saying 'No' to poor fits. The client will go with someone else when they're focused purely on price, but they will lose out on your creativity and professionalism.
House prices rose 19.8% Y/Y in August- same as the previous month & the first time the Y/Y gain hasn’t increased since early 2020. House price growth will likely slow as rising rates cut into affordability, but don't expect price declines b/c the supply-demand imbalance persists.
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!