The selling season is pretty much over – did you get ‘er done? Or did summer slip away from you?
School starts in 40 days…..there is still time!
But when you include a couple of days for negotiating, and a couple of days for moving, you need to make a deal by Monday!
Lower rates have helped to keep our pending sales afloat, so don’t give up hope:
Get Good Help!
Baby boomers in full control of the market, and very few have a reason to sell. In fact, the list of reasons NOT to sell is so long that you can’t help but have a personal favorite that keeps you in limbo:
1. I don’t need the money.
2. The grandkids are here.
3. My low property taxes have me locked in.
4. My low mortgage-interest rate has me locked in.
5. Everything else is too expensive.
6. I don’t want to leave the city/state.
7. My parents might move in.
8. My kids might move in.
9. My kids need to inherit because they can’t afford a home.
10. I don’t want to pay capital-gains (on more than the $500K).
11. I got a reverse mortgage.
12. I love it here!
13. Waiting for the market to peak.
Yet we don’t have an inventory problem – heck, there are 1,005 houses for sale in North SD County’s coastal region (La Jolla to Carlsbad).
To buy one, you need to have some horsepower – the median list price is $2.25 million. But at least it looks like higher-end pricing has slowed:
First-half stats for homes priced over $2,000,000:
| Year | ||||
| 2013 | ||||
| 2014 | ||||
| 2015 | ||||
| 2016 | ||||
| 2017 | ||||
| 2018 | ||||
| 2019 |
Has the higher-end market peaked? Compare this year to 2013.
It could be that egos are causing homes that are really worth $1.7-$1.9M to slip up into the $2M+ range, which would skew the median prices lower. But the sales have leveled off over the last three years, in spite of more choices. More listings but fewer sales keeps the pressure on pricing.
We saw that the first-half sales were 4% under last year’s count – has it been getting worse lately? Yes, and the high-end is where the trouble is:
NSDCC Detached-Home Sales, July:
| Year | ||||
| 2016 | ||||
| 2017 | ||||
| 2018 | ||||
| 2019 | ||||
| Latest YoY |
We have 546 active listings of NSDCC homes priced over $2,000,000/46 = 12-month supply.
Low rates, more inventory, strong employment, and record Dow hasn’t helped much yet. But we know there’s nothing that price won’t fix!
Get Good Help!
NSDCC Detached-Home Sales Jan 1 to June 30:
| Year | |||
| 2013 | |||
| 2014 | |||
| 2015 | |||
| 2016 | |||
| 2017 | |||
| 2018 | |||
| 2019 |
We saw yesterday that the number of new listings has remained steady, but it seems that buyers keep getting pickier. First-half sales are down 4% year-over-year, and pricing is a little soft too.
But last year’s sales were down too, and if we consider the 2016 count to be the median in the group above, then this year’s first-half sales are 10% under that.
Yunnie is optimistic though:
Yun said consumer confidence about home buying has risen, and he expects more activity in the coming months. “The Federal Reserve may cut interest rates one more time this year, but there is no guarantee mortgage rates will fall from these already historically low points,” he said. “Job creation and a rise in inventory will nonetheless drive more buyers to enter the market.”
We’ll see!
Bill (in Giants jersey) from the Bay Area has been reading the blog for the last ten years!
He won the earlier contest for Padres tickets, so when he and his family were here on vacation, they took in the first game of the series last night – a 13-2 shellacking by the Giants! They got on TV too:
Congrats Bill and family!
The contest was predicting how many new listings we would have in the first two months of 2019. Bill’s guess was 777, which was the third lowest of those submitted – we all thought more sellers would want to cash out at these prices!
Yesterday’s doomer was looking for the right evidence – historically, one of the first signs of trouble is a surge of inventory. We saw it last time in the first half of 2006 when listings jumped 23% as sellers started scrambling to get out:
NSDCC Detached-Home Listings Jan 1 to June 30:
| Year | ||
| 2005 | ||
| 2006 | ||
| 2007 |
But still no surge here locally in 2019.
Our inventory count this year is looking normal – and 24% under the 2006 count:
NSDCC Detached-Home Listings Jan 1 to June 30:
| Year | ||
| 2013 | ||
| 2014 | ||
| 2015 | ||
| 2016 | ||
| 2017 | ||
| 2018 | ||
| 2019 |
In the first half of 2005, we had 400 sales close under $750,000, and this year we had 55.
We had 560 homes list for $2,000,000+ in the first half of 2005, and 238 closings. This year, we had 901 listings over $2,000,000, and 298 closings!
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At this rate, the median price in 2039 will be $2,988,000! Hat tip to Richard!
San Diego County residents who bought homes in the 90s are reaping the benefits of a hot housing market.
Homebuyers who purchased their properties 20 years ago are “sitting pretty” in 2019, according to a study by GOBankingRates.
The study ranked 15 California cities by property appreciation rates. Six of the top 10 increases were in the San Francisco area. Two Los Angeles-area cities, Santa Monica and Newport Beach, finished first and second on the list, respectively.
The only San Diego County city on the list of top 20 locations for home appreciation was Encinitas.
In 1999, the median home value in Encinitas was $343,500. The figure now stands at $1,198,000, marking a 248.8 percent increase in value over 20 years, the study reports.
The five-year rental income on an Encinitas home is $229,688, according to the study.
See our interactive map of top California housing markets for home value increases:
Last month we had sales and pricing move higher again – the resilience of our market is incredible!
| Year | ||||
| 2012 | ||||
| 2013 | ||||
| 2014 | ||||
| 2015 | ||||
| 2016 | ||||
| 2017 | ||||
| 2018 | ||||
| 2019 |
The velocity has slowed though – maybe the pricing plateau has finally arrived?
Here’s a visual comparison of last year’s counts of NSDCC weekly active and pending listings, and how we are doing this year.
Mortgage rates had bumped up from 4.47% in April to 4.83% in October, but the inventory kept growing too, which didn’t help. The pendings are a better gauge than sales for showing when the buying decisions were being made, and you can see that last year, buyers started losing interest after mid-June.
The bulging inventory in the second half of 2018 also left us with an inventory hangover. We started the year with 35% more homes on the market than the previous year, which led to a slower start in 2019.
But the weekly pendings have strengthened lately, and have been tracking about the same counts as we had in 2018 – probably due to lower rates. Last month, the Freddie Mac average 30-year rate was 4.14%.
If rates stay the same as they are today, we really should see the season extend past June – because it got whacked last year. But high pricing and more inventory could spoil the momentum too.
Last week it was noted how we saw a big surge this time last year, and maybe we could expect the same boost of pendings this week?
Oops, the pendings count stalled:
NSDCC Weekly Total Number of Pendings
| Week | ||
| 1st Week of April | ||
| 2nd Week of April | ||
| 3rd Week of April | ||
| 4th Week of April | ||
| 5th Week of April | ||
| 1st Week of May | ||
| 2nd Week of May |
We might be at peak selling season, which would be 2-4 weeks earlier than last year?
Want another sign?
At the end of February we wondered if the market for NSDCC houses priced under a million could go away altogether – the inventory had shrunk down to 67 listings, like they were in the beginning of last May.
But for the last two weeks, we’ve had over 100 houses for sale priced under $1,000,000.
The first third of 2019 has been better than expected. Sales are only 6% below the average for the last five years, and the median sales price hasn’t dropped much:
NSDCC Sales, January – April
| Year | ||||
| 2015 | ||||
| 2016 | ||||
| 2017 | ||||
| 2018 | ||||
| 2019 |
A few more listings this year, but no flood, and limiting sales somewhat just because of the lack of choice. The tight supply keeps everything in check – price swings aren’t as obvious either.
Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!
CA DRE #01991628, CA DRE #00873197
