Inventory Watch

The NSDCC houses for sale have had a median list price over $4,000,000 all year.

How is the upper half of the market performing?

While the $2,000,000 to $4,000,000 market has seen continued upward pressure on pricing (click below on more…), the $4,000,000+ list pricing has been correcting – and it’s working!

The average LP/sf has dropped 10% since January, and the number of active (unsold) listings is trickling up. But the average days-on-market is settling down, and the number of pendings look great. There have already been 42 NSDCC sales closed this year over $4,000,000!

Fun fact:

NSDCC Active Listings Priced Over $10,000,000 Today: 46

NSDCC Listings Sold Over $10,000,000, Last 12 Months: 43

It is a very affluent marketplace!

(more…)

NSDCC SP:LP Ratio

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

Month
# of Sales
Median LP
Median SP
SP:LP
Jan 2022
149
$2,099,999
$2,200,000
105%
Feb
169
$2,099,999
$2,300,000
110%
Mar
219
$2,384,000
$2,500,000
105%
Apr
239
$2,299,000
$2,450,000
107%
May
230
$2,300,000
$2,432,500
106%
Jun
203
$2,200,000
$2,330,000
105%
Jul
165
$2,199,000
$2,249,000
102%
Aug
177
$2,100,000
$2,100,000
100%
Sep
146
$2,037,499
$1,940,000
96%
Oct
124
$2,225,000
$2,125,000
96%
Nov
123
$1,925,000
$1,860,000
97%
Dec
110
$2,091,500
$1,892,500
90%
Jan 2023
105
$1,995,000
$2,000,000
100%
Feb
112
$2,150,000
$2,040,000
95%
Mar
191
$2,199,888
$2,200,000
100%
Apr
165
$2,199,000
$2,180,000
99%
May
178
$2,300,000
$2,362,500
103%
Jun
160
$2,199,500
$2,257,500
103%
Jul
170
$1,998,750
$1,961,250
99%
Aug
198
$2,224,500
$2,217,500
100%
Sep
154
$2,272,500
$2,201,250
97%
Oct
140
$2,250,000
$2,182,500
97%
Nov
117
$2,325,000
$2,200,000
95%
Dec
87
$2,100,000
$2,050,000
98%
Jan 2024
108
$2,200,000
$2,267,500
103%
Feb
97
$2,395,000
$2,500,000
104%

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

Over List, January

There were 23 buyers who paid over the list price last month. There were 29 in the previous month, but because there were 20 fewer sales in December, the percentage looks much larger.

Cash buyers purchased 41 of the 107 sales, or 38%.

Fifteen of the sales were round-tripped (buyer and seller represented by the same agent). Thirteen of the sales had zero days on market. Of those, six were round-tripped.

With all the desperation among realtors due to the lower volume, you’d think the shenanigans would be rising faster, but those numbers are fairly normal. Last January, there were nine of the 105 sales that had zero days-on-market.

Our lousy pricing metrics stayed towards the higher end of the 10% range:

NSDCC Monthly Sales and Pricing

With the hot CPI report today, mortgage rates should be heading higher and take some of the buzz out of the marketplace. Get an FHA or VA mortgage and save 3/4%!

NSDCC Picking Up Steam

On Monday morning, these were the counts of active and pending listings between La Jolla and Carlsbad:

Actives: 312

Pendings: 149

This morning, the counts are:

Actives: 286 (-26)

Pendings: 164 (+15)

These are pre-Super Bowl numbers and it’s been pouring rain for a week!

What’s going to happen once we get into the more-traditional selling season of March, April, and May?

These blog posts are uploaded onto my LinkedIn page, and it was there yesterday that Carl asked what my crystal ball said about pricing this year.

It’s going to keep going up!

The houses that aren’t well presented and are sloppy on price are going to sit. But those that have something special about them, and/or are presented well and have an attractive price are going to find a buyer in the first week or two.

NSDCC Supporting Data:

2023 Median List Price: $2,199,000

2023 Median Sales Price: $2,157,500

January, 2024 Median List Price: $2,200,000

January, 2024 Median Sales Price: $2,275,000

The median list price of today’s 164 pendings: $2,499,950

Some buyers are getting deals, mostly on the scratch-and-dent homes where sellers and listing agents didn’t do much, if anything, to prepare the home for sale. But look at the January median sales price – it’s higher than the median list price!

Here we go again!

We are already on our way to a +10% increase in pricing – and it’s only the first week of February!

Carlsbad, Encinitas, and Carmel Valley

While it would appear that there was a big jump in new listings last month, the January count wasn’t unusual – it’s just inching its way back to a more-normal pace:

January New Listings – Totals of Three Areas Above

2019: 234

2020: 186

2021: 157

2022: 113

2023: 101

2024: 106

The pricing leveled off when rates jumped in 2Q22, with more volatility lately:


Some buyers are getting discounts too:

Get Good Help!

NSDCC January Update

After a disappointing number of sales last month (87, the lowest monthly count ever), January is poised to reach 100+ sales. There are 128 houses in escrow today, and 39 of those were marked ‘pending’ prior to January 1st so probably 20+ of those stand a good chance of closing by the end of the month:

NSDCC Monthly Sales

Although the severe drop in sales recently can be attributed to higher mortgage rates, higher prices, etc., you can’t sell what’s not for sale:

NSDCC January Listings

With the number of listings up to 183 this month, we should reach the 205 listings we had last January. Will the last few people on our list still have a fighting chance, or should we hand the Padres tickets to Joe?

Here are the contestants:

Contest to Guess the Total Number of NSDCC January Listings

142 Anne M

157 Skip

160 doughboy

170 Dale

174 SurfRider

176 LifeIsRadInCbad

180 Kingside

188 Stephanie R.

189 Chris

190 Tom

192 Sara G.

196 Derek

200 Curtis

208 Rob Dawg

210 Bode

213 Shadash

217 Nick

222 Majeed

223 Joe

With slightly more inventory, similar pricing and rates, and pent-up everything, the 2024 Selling Season should be as hot as it was last year. This week, I had buyers survive an 8-offer bidding war and win by submitting the now-customary $100,000+ over the list price, and there have been crazier sales already:

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!

Inventory Watch, 2024

The NSDCC inventory is starting off the new year with virtually identical numbers as it did in 2023!

The big difference?

Last year everyone thought we had a recession coming, and this year it’s all blue sky ahead.

At the beginning of 2023, the 30-year mortgage rate was 6.48% and all we heard was that existing homeowners would never sell because their existing 3% rate had them ‘locked-in’.

Today’s rate is 6.61% and everyone says that the lower rates will free up inventory this year!

Let’s examine the statistics that will give us a better feel for the future of home sales between La Jolla and Carlsbad. These are the three areas that are full of the homogeneous tract homes that give us a better read on the trends – they had 62% of the NSDCC sales last year:

To say that we’re in a mature market controlled by baby boomers is putting it lightly. The ‘locked-in’ effect has been around for a long time for whatever reason – but mostly because we live in paradise:

Carlsbad, CA

Encinitas,CA

Carmel Valley 92130

The vast majority of those who have been in their home since 2016 or longer are ‘locked-in’ because of the price they paid – they aren’t going to pay double or triple what they paid for their current home to just move down the street or around the corner. If they have lived in the same home this long, chances are they will stay to the end – and we’re talking about 80% to 90% of today’s homeowners!

Thankfully, life happens. Death, divorce, and job transfers will keep causing homes to come up for sale.

It will take a 20% YoY surge in NSDCC inventory this year just to match the number of homes for sale in 2022, and I’ll be happy if it is just a 10% increase over last year!

But we have become accustomed to frenzy conditions, and for many it is all they know. The current environment feels somewhat like 2013 again, which was the last time we had a non-covid surge. We were coming off a hot 4Q12, even though rates didn’t change much:

But the market exploded in 2013, just because. I think it’s going to happen again this year, just because.

We’ll find out soon enough – our first listing of the year will hit the market a week from today!

(more…)

More Inventory Next Year

I’m guessing that our local NSDCC inventory has to be at least 10% higher in 2024 than it was this year. Heck, it would need to grow +20% just to get back to the same number of houses for sale in 2022!

Bill agrees that we should see more listings in 2024:

Somewhat lower mortgage rates – and time – will likely lead to more new listings in 2024. Still, mortgage rates will remain well above the pandemic lows, and therefore new listings will be depressed again in 2024.

The bottom line is inventory will probably increase year-over-year in 2024.   However, it seems unlikely that inventory will be back up to the 2019 levels. Inventory is always something to watch!

So far, there have only been 73 NSDCC closings this month, which is well under the 110 sales last December. The median sales price is 11% higher, but with such low volume we can’t make much of that statistic. The current inventory is so picked over that it’s impressive there are that many sales.

Read Bill’s Ten Questions for 2024:

https://www.calculatedriskblog.com/2023/12/ten-economic-questions-for-2024.html

Pin It on Pinterest