NSDCC June Sales & Pricing

After the market bottomed out in mid-April, it sure came roaring back:

Year
# of June Sales
Avg. LP/sf
Median Sales Price
MSP/MLP Ratio
2016
312
$507/sf
$1,200,000
96.3%
2017
363
$529/sf
$1,260,523
97.0%
2018
299
$606/sf
$1,350,000
100.0%
2019
283
$527/sf
$1,250,000
96.5%
2020
275
$595/sf
$1,367,500
99.5%

The 275 sales last month were almost double the count in May (141), and is in line with what we probably would have had without the pandemic (which would have had slightly higher rates and inventory). Pricing year-over-year rose significantly too!

NSDCC 2Q Sales & Pricing

When the coronavirus broke out, I guessed that the second quarter sales would fall 60%, and the median sales price would drop 5%.

NSDCC 2Q Sales & Pricing

Year
# Sales
Median Sales Price
Average Sales Price
2017
988
$1,250,000
$1,581,847
2018
845
$1,325,000
$1,693,876
2019
844
$1,322,500
$1,676,090
2020
567
$1,390,000
$1,748,200

Sales dropped 33%, but the median sales price is 5% HIGHER than it was in 2Q19!

Happy Birthday Mom!

NSDCC Actives & Pendings

We saw those fancy graphs yesterday that compared the San Diego region to others nearby, and it appeared that the markets have slowed slightly. But let’s isolate on the La Jolla-to-Carlsbad area.

The chart above is from May 15th – here are the same categories today:

No slowdown here, especially in the $1.0M to $2.0M range where we have 26 more pendings today than we had 2.5 weeks ago.  How about the additional 12 pendings in the $3.0M+ range?

Coronavirus Price Premium?

When the coronavirus shut down the economy coast to coast, it was natural to assume that the real estate market would take a hit. Being in quarantine would certainly cause sales to plummet, and with 20% to 30% unemployment, prices would follow, right?

All that was left was to guess how much prices would go down.

But a funny thing happened on the way to the apocalypse.

The Fed poured $7 trillion+ into the economy, and mortgage rates hit all-time lows, which provided just enough levitation support that those aggravated by the quarantine shrugged off the virus and started buying homes again.

But sellers didn’t get the memo, and our supply has suffered – but not prices:

NSDCC Listings Between Jan 1 and June 15

Year
Number of Listings
Median List Price
2016
2,748
$1,425,000
2017
2,511
$1,426,900
2018
2,481
$1,500,000
2019
2,526
$1,560,000
2020
2,054
$1,695,000

With fewer comps and less competition (listings down 19% YoY), the list prices have been rising!

The lower rates are helping figuratively, more than literally – the ego loves the thought of getting the lowest rate in history.  Compared to last May, the actual benefit is $60 per month per $100,000 of loan, which adds up but jumbo rates are higher and we’ve already been used to having really low rates so today’s record lows aren’t the only thing fueling the comeback.

The spring season was already shaping up to be very positive, so the compression of the entire session into the next 2-3 months is what’s driving the demand.  As long as people are feeling relatively safe, we should be seeing elevated statistics just because of the compression – which may give sellers a false sense of security that any price will work.

The lack of competition is a seller’s best friend:

The motivated buyers – which now include the additional demand from folks who now have to work out of the house, instead of an office – are seeing so few of the new listings that meet their needs that if they see a hot one, they pay whatever it takes – and bidding wars are back.  Here’s a sample of home sales in Carmel Valley and Southeast Carlsbad between $1,200,000 and $1,500,000 that have closed escrow in the last 30 days (during the corona):

Click to enlarge

Ten of the 24 sales closed OVER list price, and the average SP:LP ratio is 100%!

While this is the modest end of the range for both areas, homes in the $1,200,000 to $1,500,000 range still cost a ton of money – yet virtually no discount on price, even during the coronavirus!

NSDCC May Sales & Pricing – Preliminary

Last month, the NSDCC sales ended up being down 42% year-over-year, and the average cost-per-sf was down too by almost 6%. But the median sales price was up a tick.

The stats this month will suffer by having two fewer business days, which will cost us about 25 sales – but that won’t affect the price comparisons much.

NSDCC May Sales & Pricing – Preliminary

Year
# of Sales
Avg $$/sf
Median SP
Median $$/sf
2016
334
$498/sf
$1,216,250
$415/sf
2017
346
$515/sf
$1,222,500
$431/sf
2018
274
$591/sf
$1,325,000
$480/sf
2019
296
$598/sf
$1,365,000
$501/sf
2020
112
$564/sf
$1,363,250
$482/sf

Let’s estimate the final number of sales by adding 47 to the count above – that’s how many closed in the last two days of May, 2019.

Adding the 47 to the 112 +10% for others not reported yet equals roughly 175 sales for this month, which is another 41% drop from the previous year.

The median sales price won’t change much in the final tally, and the $$/sf might move a couple of bucks in either direction – so we are looking at a max of a 5% correction in pricing. Sales in June should be a little stronger, and prices about the same.

The most alarming numbers are the sales in 2016 & 2017, which were double of what we’ll have this month.

NSDCC Since April 1st

They send out this survey twice each month – on the 15th and 21st – so these agent comments above were based on their market observations around then. Hopefully they have gotten back to work by now:

Town
Zip Code
New Listings Since April 1st
New Pendings Since April 1st
Cardiff
92007
18
3
Cbad NW
92008
25
15
Cbad SE
92009
63
36
Cbad NE
92010
18
15
Carlsbad SW
92011
47
20
Carmel Vly
92130
79
50
Del Mar
92014
28
10
Encinitas
92024
71
38
La Jolla
92037
60
16
RSF
92067
38
15
Solana Bch
92075
13
2
NSDCC
Totals
460
220

We have had 220 new pendings since April 1st, which is remarkable! The 220 is today’s number, of which 47 have already closed. Others that went pending and fell out of escrow are not included.

NSDCC April Sales & Pricing

Last month’s sales count is stalling out. Right now the year-over-year change is -42%:

NSDCC April Sales & Pricing

Year
# of Sales
Avg $$/sf
Median SP
2017
279
$535/sf
$1,282,131
2018
272
$569/sf
$1,285,225
2019
265
$583/sf
$1,375,000
2020
153
$547/sf
$1,390,000

Pricing looks ok but most decisions were done prior to virus impact. The ones with wrong prices (or wouldn’t re-negotiate) are the ones that dropped out.

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