NSDCC Sales, October

Our market was slumping towards the end of 2018, so no surprise that the numbers this year look so good.  But the pace since 2013 is remarkable, and for last month’s sales to only be down 10% vs. 2013 is incredible, given how strong our market was then:

NSDCC Detached-Home Sales, October:

Year
# Sales
Avg $/sf
Med $/sf
Med SP
Med DOM
2013
266
$495/sf
$383/sf
$957,500
32
2014
244
$467/sf
$387/sf
$978,754
39
2015
223
$473/sf
$406/sf
$1,075,000
25
2016
275
$524/sf
$424/sf
$1,100,000
30
2017
259
$533/sf
$439/sf
$1,194,500
29
2018
238
$568/sf
$484/sf
$1,384,634
37
2019
239
$602/sf
$490/sf
$1,425,000
32
Diff since 2013
-10%
+22%
+28%
+49%
0

The statistics should remain solid for the rest of the year, though the local Case-Shiller Index will probably be slightly negative.  It’s 2020 that will be less predictable!

4Q Uptick?

A positive forecast from our friends at JBREC:

Our proprietary model using Google search trends shows a bottoming & re-acceleration in resale and new home sales growth YOY into year end. Lower mortgage rates, better affordability, and an easy comp vs. last year’s dreary 4Q help these YOY stats.

You would think that the sales slump at the end of 2018 would make this year’s comparison look rosy, but it looks like we’ll be lucky just to match the 2018 sales around Coastal North SD County. We need 62 more sales reported for October, 2019 just to match last year – which had been 5% lower than the year before:

NSDCC End of Selling Season

I was talking to Nick yesterday about the current market conditions, and how home sale have been affected by the low mortgage rates recently.

You can see in the graph above that over the last five years we’ve been accustomed to rates in the threes, so it seemed obvious that when rates almost hit 5% that a market slowdown was in order.

Likewise, wouldn’t sales pick up as rates came back down?

But interestingly, in another statistical quirk, sales this year are the same as last year:

NSDCC Detached-Home Sales, August 15th – October 15th

Year
# of Sales
Avg $$/sf
Median SP
Median DOM
Sept 30yr Rate
2016
579
$517/sf
$1,199,000
28
3.46%
2017
528
$542/sf
$1,225,000
26
3.81%
2018
484
$570/sf
$1,330,000
26
4.63%
2019
484
$604/sf
$1,387,500
27
3.61%

Last year when sales were plunging 8% (again), it was easy to blame it on the higher rates. But as rates settled down this year, the best we can say is that sales have flattened out.

Reasons:

  1. Higher pricing is offsetting the lower rates.
  2. Buyers expect rates in the threes. Rates would have to get into the 2s to create a surge now.
  3. Not many homes for sale provide a compelling value to buyers (either the house or price is wrong).

The lower rates this year have provided that mythical soft landing that no one thought was possible. It is giving sellers and agents a sense of security that higher prices are supportable. But wouldn’t rates have to keep going down further for prices to go any higher?

If rates and pricing stayed about the same, the market should plateau along.

But can sellers resist adding that extra 5% on top of the last sale comp?  Probably not.

We’ll need an Election Year Miracle for prices to keep rising in 2020!

NSDCC Open Houses This Weekend

I went through the NSDCC open-house list and these are my favorites based on price, location, DOM, and agent. They start in La Jolla (four on the oceanfront!) and go north up the coast as you scroll down.

Let me know if you’d like me to create a personal collection for your search!

NSDCC Sales, September

Talking heads would look at these MSPs and declare, “Home prices were UP 6% last month!

But it’s the median sales price that increased – not every home’s value:

NSDCC Detached-Home Sales, September:

Year
Sept. # Sales
Med SP
Med $/sf
2017
259
$1,265,000
$450/sf
2018
211
$1,320,000
$496/sf
2019
217
$1,399,000
$476/sf

The actual median cost-per-sf was down 4% year-over-year (the middle number of all the $/sf for each house), which demonstrates that there will usually be stats going in either direction – and don’t make too much of them! What matters most is what’s going on in your area.

I’m just glad we had more sales than last September, but with mortgage rates being 20% lower than last year, having an extra six sales isn’t exactly spectacular.

Get Good Help!

Still Bubblin’

I noted on Instagram today that a couple of new listings in Carlsbad went pending before they got to broker preview today.  While the sales and pricing statistics may look flat, sellers shouldn’t give up on selling when rates are still in the 3s.

These are the listings from the last seven days that already found a buyer – these aren’t giveaways:

The big bidding war in Leucadia also closed…..at a whopping 30% over list price – in this market!

Wait…at your peril!

NSDCC August Sales

You may remember that July’s numbers were all negative when I reported them on August 11th.

However, we had a slew of late-reporters, and July wasn’t as bad as I thought – the closings over $2,000,000 were only down 14% YoY (instead of -38%).

LINK HERE for corrected July report.

Last month was better – the number of sales over $2,000,000 were +13% year-over-year!

NSDCC Detached-Home Sales, August:

Year
# Closed Sales
Avg $$/sf
Median $$/sf
Median SP
# of $2M Sales
2017
279
$549/sf
$452/sf
$1,245,000
63
2018
276
$534/sf
$467/sf
$1,320,000
60
2019
261
$589/sf
$500/sf
$1,360,000
68
Latest YoY
-5%
+10%
+7%
+3%
+13%

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Steady In NSDCC

Though there has been a lot of noise and commotion in the real estate business lately, our local market has been relatively solid, given how unaffordable homes are for the masses:

NSDCC Between June 1 – July 31

Year
Number of Listings
Number of Closings
Listings/Closings Ratio
Median Sales Price
2014
937
593
1.58
$1,045,000
2015
1,056
663
1.59
$1,050,000
2016
1,008
583
1.73
$1,165,000
2017
856
624
1.37
$1,255,000
2018
925
572
1.62
$1,302,500
2019
894
553
1.62
$1,289,500

Of these six years, the mortgage rates were the lowest in the summer of 2016, so there doesn’t seem to be a direct connection between rates and sales – the L/C ratio was the worst then.

The number of sales were the lowest this year, and you could blame it on the lack of opportunity – there hasn’t been that many new listings. It’s surprising we had that many sales.

Look how close we have been hugging the median L/C ratio of 1.6 lately!

As long as the supply remains in check, our market conditions probably won’t change much.

Sales Counts

I had guessed that sales would drop 20% this year, but with mortgage rates being so cooperative it looks like we’ll be fine.

Detached-home sales in San Diego County’s north coastal region for the first seven months of 2019 are only down 3% year-over-year (1,642 vs. 1,693 in 2018).  We’ll have a few more reporting over the next few weeks which should pull us within 1% to 2% of last year.

Mortgage rates spiked during the second half of 2018, helping to cause a 10% drop in NSDCC sales in the last five months of the year, compared to August-December 2017 (1,121 vs. 1,242 in 2017).

It will be hard to under-perform last year with rates about 1% less!

 

Still Time to Move!

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!

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