by Jim the Realtor | Jan 2, 2024 | Inventory, Jim's Take on the Market, North County Coastal
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…)
by Jim the Realtor | Dec 29, 2023 | 2024, North County Coastal
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
by Jim the Realtor | Dec 19, 2023 | 2024, North County Coastal, Over List
If there was going to be a time when the local market might soften up a bit, it would be around November/December, wouldn’t it? If the majority of the recent sales closed at 10% discounts or more, then it would be nervous time, but most buyers are still paying fairly close to list – or higher.
We’ve had 47 closed sales in December so far, and pricing is holding up. Next year probably will too!
by Jim the Realtor | Dec 12, 2023 | North County Coastal, Sales and Price Check
Obviously, this year isn’t over but it’s close – and we’ll be lucky to hit 1,800 sales this year (there have been 22 sales closed in December so far).
The identical Sales/Listings percentage over the last two years includes a blazing hot first half of 2022 so the demand has been steady-hot, but there just isn’t the inventory like we used to have.
Pricing?
The median LIST price in 2022 and 2023 was the same $2,199,000 each year. In 2022, people preferred to pay over list, and this year…..not so much!
No evidence yet of a possible surge in inventory next year:
by Jim the Realtor | Dec 1, 2023 | North County Coastal, Sales and Price Check
Let’s look at the graphs that were updated with November’s data today:
About 50,000 people live in Carmel Valley, 92130, and only seven houses sold there last month?
The pricing is holding up for the few who do sell:
The wildest frenzy period was from Spring, 2021 to Summer, 2022 when the median DOM was really low for a year. Higher rates shook up this measurement, but it has since settled down in 2023:
This looks solid too – under 2 months is healthy:
The 92037 is La Jolla, which is higher-priced, but look at how similar the median sales price is around Carlsbad, Encinitas, and Carmel Valley now (graphs are interactive):
by Jim the Realtor | Nov 29, 2023 | Inventory, Jim's Take on the Market, Market Surge, North County Coastal |
While a surge in inventory next year would help to change the market dynamics, there isn’t any hard evidence of it happening yet:
How many would be considered a surge? If the number of new listings rose 10% or even 20%, would anyone notice? Probably not.
Using these November numbers, and adding an extra 20% would only get us back to last year’s total – which we thought was bleak then. but now I’d take it!
It would take a real bump to get buyers to step back and say, ‘hold on, I’m going to wait and see where this goes for a month or two’.
Let’s guess that it would take at least a 25% increase in new listings for buyers to pause.
I was asking around yesterday, but nobody had anything definite to report about their new-listings flow for next year. One agent thought that we’re going to see a lot of short sales though (???).
by Jim the Realtor | Nov 15, 2023 | Market Buzz, North County Coastal, Sales and Price Check
A columnist reflected on history to help measure whether it’s a seller’s market, or a buyer’s market. I like it!
House-hunting’s transformation includes several market trends including people moving less often, consumers accessing detailed market info, near-instant cash buyers and tighter lending standards. Maybe the buyer/seller-market math should morph, too.
From 1990 through 2006, just before the bubble burst, California was a “buyer’s market” in 49 percent of all months and a “seller’s market” 17 percent of the time — using the traditional 6-month/3-month template and Realtor data.
Looking at the past 12 post-crash years — assuming you’d want to match that pattern — a buyer’s market would be 3.25 months-plus of supply and a seller’s market would be 2.25 months or less.
This evolving gap in homebuying supply is another reminder of today’s steep house-hunting challenges.
Link to the Full Article with data
Currently there are 359 active detached-home listings between La Jolla and Carlsbad, and last month there were 140 sales. The 359/140 = 2.56, which, by the new definition, is pretty close to a seller’s market!
by Jim the Realtor | Oct 29, 2023 | 2023, Flips, Jim's Take on the Market, North County Coastal |
Could there be trouble brewing under the surface?
Are there home sellers scrambling to get out with whatever money they can? Maybe get just enough net proceeds for the family to have a steak dinner at closing? It was like that last time…..but it’s different now.
It’s a lot different now!
Let’s check the home sellers who purchased during the pandemic days. Those who bought their home before 2020 are having no problem selling for substantially more than they paid, so we only need to check the recent purchasers. Is anyone losing their shirt?
This month’s NSDCC sales are up to 117 – here are the ones that were purchased since 2020, and comparing what they paid then to their sales price this month:
Observations:
- Twenty-six of the 117 sales had purchased since 2020 (22%), but 12 of the 26 were corporations in the business of making money. They succeeded!
- The median gross profit was $750,000.
- Fourteen of the 117 sellers (12%) were regular buyers since 2020 who found a reason to sell this month.
- Even if they were in some sort of trouble, they still made out nicely – and for all we know, there were many who sold JUST BECAUSE they could hit the jackpot!
- The only seller who lost money had purchased 1,700sf for $5,500,000. Think twice about doing that!
- There are at least 100 sellers EVERY MONTH who are walking away with $1,000,000+ in their pocket!
Could there be trouble ahead for those who bought this year if prices declined substantially? Maybe, but rates have been rising for 18 months so they shouldn’t be surprised about future market shifts – if any.
For them to purchase a home in spite of market conditions must mean they are in it for the long haul.
P.S. The flip that made $8,000,000: Click here
by Jim the Realtor | Oct 25, 2023 | Jim's Take on the Market, North County Coastal
There have already been 101 detached-home sales close this month between La Jolla and Carlsbad!
With five business days left in the month, plus the late-reporters, it means we should match last October’s count of 133, and maybe even approach last month’s 153 sales.
Of this month’s 101 sales, 45 were all-cash.
The 8% mortgages won’t kill the market – especially for the superior homes for sale, which are hot. They may be the only ones selling, unless sellers of the inferior homes will accept an appropriate discount – a gap which is probably 10% to 20%.
by Jim the Realtor | Sep 27, 2023 | Jim's Take on the Market, North County Coastal, Sales and Price Check
We’re having another amazing month, and should get close to 150 sales!
The pricing appears to be holding up nicely too (and more evidence that July’s collection of lower-priced sales was an anomaly).
