This is the #1 reason I went to Compass, and I didn’t really feel like I had a choice.

When realtors get disrupted, this is the way the big brokerages can survive while the little guys die.

Hoard the listings in-house as ‘private exclusives’, like they do in the commercial real estate. The practice is legal (per the Clear Cooperation Policy) and is a choice for home sellers to make.

The big benefit for sellers is that they don’t get penalized by the days-on-market statistic, which buyers normally consider as the best way to know if the price is wrong after the first week on the market.

Compass has this option available for sellers, as do all the other brokerages, but nobody in management is pushing it around here. It’s used more like a Coming-Soon feature while homes are being prepared for open-market exposure. But there are deals being made.

If there was an organized, committed effort to use it as a survival tool, then I could see 30% of our sales happening off-market. But we’re not there yet.

Maybe next year?

Overly Optimistic

Pardon the casual presentation. I’m used to working with this same basic graph format but it’s limited to 50 datapoints – we’d really like to take these back a few years to see the long-term trends.

But in early 2023, the active listings in the $3M – $4M category were range bound between 1,170/sf and 1,342/sf, so there is some normal optimism in springtime. But not like this pop in 2024 (above). These two subsets are the meat of the market, and aren’t swayed by radical outliers that would tweak the averages.

Starting right after the Super Bowl, there was a huge swing from $1,252/sf to $1,515/sf in the $3M – $4M category, and it has stayed elevated until the last couple of weeks. The reason for pricing to relax a little?

The number of unsold listings are starting to stack up now:

There isn’t any reason for home buyers to think mortgage rates are going to drop significantly this year.  If there were one or two Fed cuts, it would only cause mortgage rates to get back into the 6s which isn’t enough to compensate for the sky-high prices that buyers are seeing today.

Then we have the changes from the commission lawsuit, which will have a clunky start over the next few months as buyers grapple with hiring a buyer-agent in writing just to tour a house. All we need is the Padres to go on a run this summer and we will have all the excuses we need for a very sluggish rest of the year.

San Diego is #180

From the U-T:

San Diego County has very little chance of a big housing downturn but also isn’t exactly the most secure market in the nation, according to a new report.

Out of 580 counties, San Diego County was the No. 180 most likely to experience a downturn, said a study from Irvine-based real estate researchers Attom. It used a variety of factors to determine the rankings, including foreclosures, percentage of homes underwater, income-to-cost ratio and local unemployment numbers.

The counties with the biggest chance of a downturn were in inland California and areas around Chicago and New York City. San Joaquin County, home to cities Stockton and Lodi, was considered the most likely spot in the nation for a downturn, Attom said. In that area of California at the end of 2023, it took 65 percent of income to pay for a home, unemployment was among the highest in the state at 6.4 percent, 7.5 percent of buyers were in homes that cost more than they were now worth and other factors.

Broken down by the 20 most-populated counties, San Diego County ranked 12th most likely for a downturn. Kings County, home to Brooklyn, was most likely and Miami-Dade County the least likely.

Here’s how San Diego County compared to the rest of the nation:



Another good way to anticipate the market trends is to check the direction of the SP:LP ratio:

NSDCC Monthly Sales and SP:LP Ratio

# of Sales
Median LP
Median SP
Jan 2022
Jan 2023
Jan 2024

Pricing looks strong – similar to the March-May, 2022 era, which was the hottest frenzy ever!

NSDCC Active Listings By Week

The blip in active listings over the last week isn’t too concerning and could just be from the weather.

The count of active listings is a good indicator of the demand though. During the mega-frenzy conditions from late-2020 through early-2022, you can see that the new listings were being gobbled up as quickly as they came on the market, and there was no build-up of the supply. Last year, the demand was hot enough in the early months that the active-listing counts were fairly flat too.

If this year’s count of active listings surges above 400, it will mean that we are exiting the frenzy days, and the market’s normalization is underway.

It is subject to the overall number of listings, and I’ll reuse yesterday’s chart to show the flow:

NSDCC Listings and Sales, Jan 1 – Feb 15

The total number of listings in 2024 is still in the frenzy range.

It’s the number of active listings that help demonstrate the velocity of the demand. Are they being gobbled up as fast as they hit the market like in recent years, leaving the number of actives fairly steady? Or are the actives starting to pile up, like they used to do? (see the 2019 green line in graph at top)

This is how we will know where the Spring Selling Season is going.

Buyers already have reason to be cautious and wait patiently because Powell opened his big yap and said he was going to lower his rate THREE times in 2024.

If the active listings break out of the frenzy range and start stacking up unsold, it will be irresistible for buyers to wait longer to see if sellers capitulate on price, while hoping rates might come down too.

Want to know where the market is going? Just watch the number/trend of the active listings!

Zillow Tailwinds

It’s a new year and many, including Zillow economists, are optimistic. After a year in which almost half of agents reported selling one home or less, optimism is a valuable tool. To that end, there are a few major macroeconomic tailwinds that might fuel the early months of 2024:

  • The job market remains strong.
  • Despite a couple of blips in January, inflation continues to trend toward the 2% target rate.
  • The Fed has signaled that benchmark rates were likely at or near their peak while hinting at rate cuts.

Benchmark rate cuts can mean mortgage rate softening. Mortgage rate softening means more sellers loosen their grip on rate lock. Taken together, these trends drive a healthier housing market.

That’s the glass-half-full picture. Now let’s take a deeper look at a few trends.

More homeowners want to sell

Twenty-one percent of homeowners are considering selling within the next three years, according to Zillow research from December. That’s up 15% year over year.

Here are some of the most common reasons why:

Tech jobs, long-distance movers are spreading out from traditional hubs

Zillow analysis of United Van Lines data shows that long-distance movers are heading to metro areas that are less expensive and have less competition from other home buyers.

“Housing affordability is reshaping migration trends. Buyers are moving where homes are more affordable and where there’s less competition,” says Zillow Senior Economist Orphe Divounguy. “Affordability remains the biggest challenge for most homebuyers today. Helping them navigate it by pointing them to a loan officer first is key. It’s even more crucial if they’re new to the area.”

Out are states like New Jersey, New York, North Dakota, Illinois, Michigan, and California. Top destinations include Charlotte (Zillow’s hottest market prediction for 2023), Providence, Indianapolis, Orlando, and Raleigh.

Additionally, a recent Brookings report found that tech jobs are spreading out. Traditionally concentrated in hubs like San Francisco, Seattle, and New York, tech employment is branching out to new “rising star” metros. Since 2020, cities like Dallas, Austin, Denver, Miami, Nashville and Salt Lake City are pulling larger shares of tech work.

The study found that this phenomenon was already underway, but that the pandemic, remote work, and high mortgage rates likely accelerated it.

Takeaway: Cities and states gaining workers are almost all more affordable than the traditional tech hubs. Out-of-town leads in these rising star metros may have healthy incomes and be looking to view upper-tier buys.

While rent growth slows in many markets, concessions are up

Rent growth is slowing in many major metros and rents are even falling in a few. Nationally, rents are still up 3.3% from a year ago, but they dipped (0.2% from the previous month). Forty-five of the 50 largest metro areas have seen annual increases.

  • Annual rent increases are highest in Cincinnati (7.1%), Providence (7.1%), Hartford (7.1%), Buffalo (6.3%), and Louisville (6.1%).
  • Rents fell month over month in 32 of the 50 largest metro areas. The largest drops are in Jacksonville (-0.8%), San Diego (-0.7%), New York (-0.6%), Denver (-0.6%), and Austin (-0.6%).

Rental concessions, like free months of rent or free parking, have surged unexpectedly. In December, 32.7% of rentals on Zillow offered at least one concession. That’s up just 0.7 percentage points from November but 10.1 percentage points from last year. This rise is especially prevalent in cities like Oklahoma City and Memphis, which each saw a 4 percentage point increase from November to December.

Takeaway: Leads may be weighing another lease before a purchase. But equity starts when you buy. Those who plan to live in their new home for long enough can start building that equity now, and most experts agree that significant rate drops won’t happen anytime soon.

First LCV Listing of 2024

La Costa Valley (1,073 single-family homes) Annual Sales:

The new rule about getting profits tax-free went into effect in 1997, and it motivated people to move! The sales history of this house is an example of how it used to be – make a little money and be on your way:

But over the last 10-12 years, people stopped moving so much. Any of the original LCV homeowners were already empty-nesting, so it wasn’t the kids that kept them from moving. Rates were coming down a bit, and refinancing made it a little more affordable – and there wasn’t anywhere else to move locally that was better than what they had already.

Some may have thought that the 2007 buyer got left holding the bag. But he’s now listed for $2,085,000!

Fewer Sales = More Commotion

There have only been 83 NSDCC sales recorded in December, 2023, which means we may not make it to 100 closings. January isn’t looking too good either, and from what I can find, we’ve never had less than 100 monthly sales, let alone in back-to-back months. But it’s coming.

It puts the squeeze on everyone.

Buyers lose faith that there will be more homes to consider and end up jumping at one. Sellers either think they can get away with any price and tack on an extra 5% to 10% over the comps from 2021….or they give up altogether and decide to wait until the market “gets better”.

Even with a little extra inventory, the market is going to look and feel uncertain. Is it going up or down?

When we are having the fewest sales ever, the the evidence is thin, and the results vary!

NSDCC December Sales Under $4,000,000:

Number of sales that closed for $100,000+ OVER their list price: 12

Number of sales that closed for $100,000+ UNDER their list price: 17

Get Good Help!


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.

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