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NSDCC September Preview

The impending ‘upgrade’ of the MLS starts today at noon, and last until Monday. It will screw up my stats for usual Inventory Watch on Monday morning, so here’s a mid-week preview.

Today there are 491 NSDCC detached-homes in escrow, which the highest number I’ve seen.  The huge number of pendings isn’t due to escrows not closing either:

NSDCC Detached-Home Sales, September 1-15

2012: 127

2013: 114

2014: 112

2015: 117

2016: 130

2017: 139

2018: 107

2019: 102

2020: 149

We still have late-reporters too, so this year’s count should get up close to 160!

But you can feel the slowdown coming, and I think it’s purely because there aren’t more houses coming onto the market.  We already had the lowest number of August listings in recent history, and the rest of 2020 probably won’t get any better:

Are sellers waiting for the 2021 selling season? Probably! Buyers will be waiting!

Coastal North By Price Range

Above are the North Coastal interactive graphs broken down by price (which includes Oceanside, which doubles the inventory of homes for sale under $1 million vs. NSDCC). Our total sales in 2020 should be about the same as they were last year, which is a reminder that 30% to 40% of the listings every year don’t sell – the more-casual sellers didn’t bother to list at all this year.

Interesting that the higher-end pendings are currently setting records for any time of year. The elite are taking advantage of the low rates and are on the move!

NSDCC August Sales

Here is the recent history of August sales of detached-homes between La Jolla and Carlsbad:

August, Year
# of Sales
Median Sales Price
2013
324
$953,750
2014
246
$1,050,000
2015
278
$1,030,000
2016
288
$1,199,500
2017
279
$1,245,000
2018
276
$1,320,000
2019
264
$1,354,500
2020
334
$1,410,996

The 2013 frenzy was a result of the renewed optimism coming out of the last foreclosure crisis – back when most of our sales (57%) were under a million! This August? Only 18% were under a million!

In August 2013, we had 12 sales over $3,000,000. This year? 44!

Plus we still have the late-reporters – we could hit 350!

North County Appreciation 2006-2020

Our San Diego Case-Shiller Index is 10% above the previous peak of November, 2005.

But that covers the whole county, so it made WC Varones speculate that the appreciation in NSDCC was higher – as much as 30% to 40% above peak.

Our peak was later, so I searched the 2006-2007 time frame for tract homes so the second sale probably wasn’t a result of a major remodel. The sellers may have added new carpet & paint, or maybe a pool. But for the most part, they were selling the same home that they bought.

Here are examples:

Address
Previous Sale Price/Date
Recent Sale Price/Date
% Diff
3303 Corte Del Cruce
$932,500 – 5/11/07
$1,210,000 – 10/21/19
+30%
3313 Avenida Anacapa
$955,000 – 7/11/07
$1,427,000 – 7/1/20
+49%
3638 Sage Canyon
$970,000 – 4/20/07
$1,342,000 – 2/6/18
+38%
3411 Camino Corte
$975,000 – 7/10/07
$1,215,000 – 7/29/20
+25%
1186 Quail Gardens
$995,000 – 6/7/06
$1,296,000 – 8/14/20
+30%
3210 Avenida La Cima
$1,100,000 – 5/29/07
$1,388,000 – 6/21/19
+26%
7574 Circulo Sequoia
$1,167,500 – 6/12/07
$1,475,000 – 6/14/19
+26%
511 Paloma
$1,200,000 – 5/11/07
$1,400,000 – 4/9/19
+17%
13056 Seagrove
$1,200,000 – 6/1/06
$1,662,000 – 4/1/20
+39%
5816 Blazing Star
$1,250,000 – 4/25/07
$1,650,000 – 9/11/18
+32%
2433 7th St
$1,350,000 – 4/23/07
$1,785,000 – 3/5/19
+32%
4475 Philbrook Sq
$1,440,000 – 6/28/06
$1,850,000 – 7/2/19
+28%
13689 Winstanley
$1,037,000 – 11/5/07
$1,380,000 – 6/3/20
+33%

The average is +31%!

The last entry on Winstanley is the home I sold in June, and I’ll never forget it.

The seller – who had been reading the blog – had told me when he bought it in late-2007 that he expected to lose $100,000 but he wanted to make his wife happy.  I told him to hang in there, and let’s see how it goes!

NSDCC August Sales – Preliminary

We still have four days to go this month, so it looks like we’ll be setting new monthly sales records again, just like last month (even with a covid asterisk):

Town or Area
Zip Code
# of Sales, 2019 
Median SP
# of Sales, 2020 (so far)
Median SP
Cardiff
92007
11
$1,375,000
13
$1,625,000
NW Carlsbad
92008
23
$985,000
20
$1,094,500
SE Carlsbad
92009
37
$1,107,000
47
$1,165,000
NE Carlsbad
92010
6
$807,500
7
$955,000
SW Carlsbad
92011
19
$1,100,000
20
$1,072,500
Carmel Valley
92130
47
$1,310,000
29
$1,362,500
Del Mar
92014
15
$2,100,000
11
$1,720,000
Encinitas
92024
46
$1,492,500
37
$1,545,000
La Jolla
92037
36
$2,474,000
33
$2,015,000
RSF
67+91
19
$3,100,000
30
$2,762,500
Solana Beach
92075
9
$1,900,000
5
$2,275,000
NSDCC
All Above
264
$1,354,500
247
$1,400,000

I don’t have too much concern about changes to the median sales prices due to the smaller sample sizes, and I doubt there are any buyers out there who would say prices are down.

Last year we had 56 sales over the last four business days of August, so we’ll probably see 300+ this month when it’s all done. Will sales slow a bit towards election day? Only if the supply winds down?

Tight Inventory?

We hear the term, ‘tight inventory’. What does it mean?

Fewer homes for sale?

Fewer of the lower-priced homes for sale?

Homes selling faster?

The best buys are flying off the market in the first day or two?

NSDCC detached-home statistics for Jan 1st – Aug 15th:

Year
# of Listings
Median LP
# of Sales
Median SP
Avg DOM
Median DOM
2016
3,727
$1,399,000
1,912
$1,150,000
43
22
2017
3,349
$1,425,000
1,994
$1,229,500
45
19
2018
3,390
$1,497,500
1,819
$1,320,000
40
18
2019
3,411
$1,550,000
1,789
$1,300,000
43
22
2020
2,991
$1,659,000
1,643
$1,400,000
41
18
20vs19
-12%
+7%
-8%
+8%
-5%
-18%

The average and median Days-On-Market metrics are within the normal range, so generally-speaking, homes aren’t selling faster than before.

We’ve had fewer homes for sale (-12% YoY), but sales are only down 8% which isn’t bad.  The drop in sales between 2017 and 2018 was slightly more at 9% so we’ve endured this previously.

The overall volume is only down 0.4% YoY ($3,000,850,233 vs $2,988,471,818) – so those on commission (realtors, lenders, escrow, and title) shouldn’t be too concerned with ‘tight inventory’.

Who should be concerned?

Buyers on the lower-end of every market.

We have eleven NSDCC houses for sale priced under $900,000 (in an area of 300,000 people):

Two of those aren’t on the market yet (coming soon!), and a third has a contingent buyer.

Tight inventory = buyers are getting squeezed up on price.

More Showings Than Ever?

Not only are there 92.7% more showings this year than on 2019, but this has to be the most people looking at homes for sale in the history of California!

Has there been a surge of new inventory lately?

Locally, the number of new listings has been normal:

NSDCC New Listings Between June 1 and July 31:

2017: 856

2018: 925

2019: 903

2020: 918

There are just more people looking than ever, and it’s translating into sales.

Our July count of NSDCC closed sales is up to 347, which is 23% higher than in July, 2019.

The Frenzy of 2020

Mortgage rates hit an all-time low yesterday!

Combine the improved purchasing power with the covid-delayed selling season and the lowest inventory in recent history, and we have full-blown frenzy conditions. Look at how July wound up:

NSDCC July Sales & Pricing – Preliminary

Year
# July Sales
Avg. $$/sf
Median SP
July Mortgage Rate
# Listings, 1st Half
2012
258
$365/sf
$850,000
3.55%
2,545
2013
297
$418/sf
$930,000
4.37%
2,790
2014
271
$451/sf
$1,018,000
4.13%
2,714
2015
321
$458/sf
$1,025,000
4.05%
2,871
2016
271
$504/sf
$1,110,000
3.44%
2,999
2017
261
$528/sf
$1,240,000
3.97%
2,725
2018
273
$544/sf
$1,280,000
4.53%
2,701
2019
281
$612/sf
$1,300,000
3.77%
2,725
2020
343
$620/sf
$1,420,000
2.99%
2,293

We had 342 sales, and there will be some late-reporters. Wow!

Has pricing caught up with the market conditions yet?

Selling Season Delayed

This graph shows how we’re making up for lost time, with showings almost double what they were last year.

The closed sales are starting to pop too.

We did have one more business day this year than in 2019, but the NSDCC sales this month are already ahead of recent years, and we have three days to go:

NSDCC July Sales & Pricing – Preliminary

Year
# July Sales
Avg. $$/sf
Median Sales Price
2016
271
$504/sf
$1,110,000
2017
236
$533/sf
$1,253,250
2018
259
$545/sf
$1,300,000
2019
258
$604/sf
$1,300,000
2020
272
$631/sf
$1,410,927

We’re probably going to have 300+ sales this month, and pricing is stronger than ever.

NSDCC First Half

Will our local market survive the coronavirus?

Let’s look at the bigger picture and compare the first half of 2020 to previous years:

NSDCC 1H Listings & Sales

Year
# Listings
Median List Price
# Sales
Median Sales Price
2016
2,999
$1,425,000
1,526
$1,150,000
2017
2,712
$1,425,000
1,595
$1,225,000
2018
2,701
$1,499,000
1,420
$1,325,000
2019
2,725
$1,555,000
1,383
$1,300,000
2020
2,290
$1,675,000
1,150
$1,400,000
19vs20
-24%
+8%
-17%
+8%

There have been a fairly-consistent 2,700 NSDCC houses listed for sale in the first half of each of the last three years. In 2020, the count dropped to 2,290, which is 435 fewer listings than last year, or about a month’s worth. We didn’t miss them much either, with sales only being down 17%. Pricing of homes on the lower end has known no throttle.

If we have a typical second half, the 2020 annual sales could end up only being down 5% to 8% for the year – and median pricing up 5% to 10% YoY. I’m not sure anyone predicted that when the ‘rona broke out!

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