NSDCC Monthly Closed Sales, 2019

The NSDCC closed sales got off to a hot start in 2019!

But by March 4th, pendings had stalled and were 19% under last year’s total.  Now that stall pattern is playing out in the March closings too:

NSDCC Detached-Home Sales, Year-Over-Year Changes:

Year
2018
2019
% chg
January
151
151
-0-
February
164
174
+6%
March
259
203
-22%

But the recent flurry of activity has us catching up.  The pendings count today is only six behind the count on April 2nd of last year (340 vs 346).

The published March sales counts are going to be disappointing, even if we have a bunch of late-reporters. But the April/May sales should be healthier!

NSDCC Actives/Pendings

It’s March! How are we doing?

We’ve considered a 2:1 ratio of active-to-pending listings to be a sign of a healthy market. Though pricing is much higher than in the recent past, we’re under 3.0 is all but the highest-end areas:

Here are the Actives/Pendings stats for each area:

Area
Zip
ACTIVES
PENDINGS
ACT/PEND
SOLDS Last 30 days
Cardiff
92007
21
11
1.9
3
Carlsbad NW
92008
42
15
2.8
12
Carlsbad SE
92009
72
38
1.9
29
Carlsbad NE
92010
25
11
2.3
12
Carlsbad SW
92011
41
27
1.5
18
Del Mar
92014
78
18
4.3
9
Encinitas
92024
74
43
1.7
23
La Jolla
92037
171
32
5.3
18
RSF
67+91
179
23
7.8
8
Solana Bch
92075
25
6
4.2
5
Carmel Vly
92130
80
37
2.2
31
All Above
All
808
261
3.1
168

The first half of 2018 was very active, so just to stay close would be a win.

Sales in January caught up with last year’s count, and the year-over-year February sales are stronger than expected too – we had MORE sales in 2019! (updated later on March 1st)

NSDCC Closed Sales:

Year
January
February
Median SP YTD
Avg $$/sf YTD
2018
150
164
$1,294,005
$573/sf
2019
150
165
$1,275,000
$540/sf

Pricing is soft, but close enough for now.

Inventory Watch

Thanks Rob Dawg for the gift!

Our contest for Padres tickets got more exciting this week due to Manny Mania!

NSDCC New Listings Jan 1 to Feb 20:

2018: 681

2019: 644 (-5%)

The two-month total last year was 783, so we’re on a pace to hit 741.  Doughboy guessed 740, but it came in after the guessing period ended.  If he wins, I’ll give tickets to him and the next closest guesser.

Others who guessed under 800:

755 – Neil

777 – Bb

785 – Recordsclerk

799 – TominLaCosta

We finally hit a statistical oddity that we’ve been flirting with for months.  The average list-price-per-sf of the Under-$1,000,000 category caught up with the next category, $1.0M to $1.5M.

Both are at $494/sf today!

There was another quirk also. The new listings AND the new pendings both dropped off over the past week, which is unusual for this time of year.  It must have been due to the rain?

The total number of pendings today is 18% behind last year.

Looking ahead to next month? It starts Friday!  We had 446 new listings in March of last year, which was 25% more than in February, 2018.

(more…)

NSDCC 2019 Sales

Yesterday, the C.A.R. released the statewide January results, with more speculation from our so-called leaders:

 California home sales fall to lowest level in more than 10 years

– Existing, single-family home sales totaled 357,730 in January on a seasonally adjusted annualized rate, down 3.9 percent from December and down 12.6 percent from January 2018.

– January’s statewide median home price was $538,690, down 3.4 percent from December and up 2.1 percent from January 2018.

– Statewide active listings rose for the 10th straight month, increasing 27 percent from the previous year.

– The statewide Unsold Inventory Index was 4.6 months in January, up from 3.5 months in December.

“California continued to move toward a more balanced market as we see buyers having greater negotiating power and sellers making concessions to get their homes sold as inventory grows,” said C.A.R. President Jared Martin. “While interest rates have dropped down to the lowest point in 10 months, potential buyers are putting their homeownership plans on hold as they wait out further price adjustments.”

The statewide median home price declined to $538,690 in January. The January statewide median price was down 3.4 percent from $557,600 in December and up 2.1 percent from a revised $527,780 in January 2018.

“While we expected the federal government shutdown during most of January to temporarily interrupt closings because of a delay in loan approvals and income verifications, the impact on January’s home sales was minimal,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The decline in sales was more indicative of demand side issues and was broad and across all price categories and regions of the state. Moreover, growing inventory over the past few months has not translated into more sales.”

Link to press release  

Obviously, they haven’t done a survey of the North San Diego County’s coastal region!  Between La Jolla and Carlsbad, we had about the same number of January sales last month as we did in January, 2018, so we’re faring much better than the -12.6% statewide.  We are further into February so let’s pick up the sales from the first half, and break it down by price category too:

NSDCC Detached-Home Closed Sales, Jan 1 to Feb. 15th

Price Range
2014
2015
2016
2017
2018
2019
PEND
ACT
Under $1M
129
96
107
93
71
65
76
64
$1M to $1.5M
62
71
82
88
77
91
87
163
$1.5 to $2.0M
29
33
24
41
36
34
50
126
Over $2.0M
46
50
43
41
51
52
60
453
Totals
266
250
256
263
235
242
273
806

The only two signs of trouble:

  1. The Under-$1M market is disappearing.
  2. If you want to buy a house priced over $2,000,000, you sure have plenty to consider!  Those sellers are happy to wait it out too, so no rush.

Other than those, we have remarkable balance, and it doesn’t look like ‘potential buyers are putting their homeownership plans on hold’ around here!

Fannie/Freddie Limit up to $726,525

Today the FHFA announced that they have raised the Fannie/Freddie mortgage limit to $726,525 in high-cost areas:

Link to Article

With deductible mortgage interest now capped at $750,000 by the I.R.S., buyers who are concerned about write-offs will want to keep their new loan balance in the $700,000s.

The strict equation is $750,000/80% = $937,500.

If buyers find a house priced higher, they could come up with more cash to make up the difference, or they could get a jumbo loan at roughly the same interest rate and live with the non-deductible interest paid on the loan amount above $750,000.

It makes the ideal purchase price in the $1,000,000-$1,100,000 range.

If the tax reform is a big concern for buyers as some have suggested, the homes priced in the $1,100,000 – $1,500,000 might feel it.  Buyers above that range weren’t expecting as much benefit anyway, and probably won’t be as impacted – but theoretically there are fewer buyers the higher we go.

Out of curiosity, let’s keep an eye on the NSDCC stats.

Today’s NSDCC Actives and Pendings:

$700,000-$1,100,000: 121/72 = 1.68

$1,100,000-$1,500,000: 157/75 = 2.09

$1,500,000-$2,500,000: 243/81 = 3.00

$2,500,000 and higher: 399/44 = 9.07

The market has been healthy up to $1,500,000 roughly, and like Rob Dawg said yesterday, potential buyers may not know the exact impact of the tax reform until they start on their 2018 tax returns in spring.

Let’s come back then and check for impact!

Inventory Watch – Labor Day

The NSDCC Actives vs. Pendings by price range:

Price Range
NSDCC Actives
NSDCC Pendings
A:P Ratio
Avg. DOM
Under $1.0M
109
62
2 to 1
38
$1.0M to $1.5M
207
129
2 to 1
45
$1.5M to $2.0M
172
64
3 to 1
67
Over $2.0M
541
65
8 to 1
105

In the past, we’ve considered a ratio of 2:1 to be about normal. Given this market and time of year, these look pretty good, except for the high-end which has always had excess supply. (more…)

NSDCC 2Q Sales

Let’s examine by zip code where the market might be slowing recently. These are the detached-home sales for the second quarter, plus the current number of pendings in each area:

Area
Zip Code
Sales 2Q16
Sales 2Q17
Sales 2Q18
Pendings Today
Cardiff
92007
25
30
11
9
Carlsbad NW
92008
49
67
67
20
Carlsbad SE
92009
161
181
148
64
Carlsbad NE
92010
49
51
47
26
Carlsbad SW
92011
80
91
60
26
Del Mar
92014
55
45
47
8
Encinitas
92024
144
141
110
51
La Jolla
92037
113
105
104
42
RSF
92067
76
79
55
43
Solana Bch
92075
19
33
21
10
Carmel Vly
92130
173
153
166
55
All Above
All
944
976
836
354

If the numbers for 2Q18 are remarkably under the first two columns, and the number of pendings are so low that the 3Q18 doesn’t look promising either, then you can figure that the market is soft, and getting softer in that zip code (Cardiff, Carlsbad SW, & Encinitas).

NSDCC Actives/Pendings

Historically, we have considered our market to be relatively ‘healthy’ when the actives-to-pendings ratio is around 2.0 – but that thought originated when prices were about half of what they are today!

But all in all, we’re in pretty good shape today.

The active inventory hasn’t exploded, and as long as the supply stays in check, the sellers aren’t going to panic.  Do the buyers have the willingness and ability to wait it out, with no assurance it will ever get better?  Or will the lack of solid evidence keep the ball rolling, albeit at a slower pace?

Here are the stats for the NSDCC detached-home market (La Jolla to Carlsbad):

Reading Date
Actives
Pendings
A+P
A/P
Oct 28, 2015
970
358
1,328
2.71
Feb 1, 2016
788
254
1,042
3.10
Mar 23, 2016
900
399
1,299
2.26
June 21, 2016
1,052
428
1,480
2.46
Aug 17, 2016
1,060
395
1,455
2.68
Dec 4, 2016
886
327
1,213
2.71
Apr 21, 2017
842
427
1,269
1.97
July 16, 2018
973
357
1,330
2.73

NSDCC Actives Median Price = $2,288,045

NSDCC Pendings Median Price = $1,395,000

Only 10% of the actives are under $1,000,000, and 35% are over $3,000,000 (which are the same ratios as the last reading in April, 2017).

Here are the Actives/Pendings ratios for each area:

Area
Zip Code
June
Aug
Dec
Apr
Act/Pend Today
Cardiff
92007
2.3
3.5
1.1
1.0
2.5
Carlsbad NW
92008
2.0
2.3
1.3
1.2
2.9
Carlsbad SE
92009
1.6
2.0
1.9
1.0
1.3
Carlsbad NE
92010
0.7
0.9
1.3
0.9
1.1
Carlsbad SW
92011
1.6
1.5
1.3
1.1
2.4
Del Mar
92014
3.2
2.5
4.9
3.3
9.4
Encinitas
92024
1.3
1.8
1.8
1.6
2.0
La Jolla
92037
4.8
4.4
4.4
3.7
4.4
RSF
92067
8.2
6.3
6.3
5.2
4.6
Solana Bch
92075
2.9
3.9
2.7
1.5
2.0
Carmel Vly
92130
1.5
1.8
1.8
1.1
1.9
All Above
All
2.5
2.7
2.7
2.0
2.7

These stats are going to bounce around, so there isn’t anything here that gets me overly concerned.

Del Mar has always been a smaller, expensive subset (just eight pendings today), La Jolla is in line with their recent past, and RSF is as good as it’s been in years. Everything else is around the regular 2.0 ratio for a normal market.

Inventory Watch

The pending counts have been dropping precipitously since June 11:

NSDCC All: -15%

Under-$1,000,000: -29%

While a lower number of pendings can be due to more closings from the fat part of the selling season, it not like we’re setting any sales records either.  The NSDCC June sales are down 20%, year-over-year, just like they were in May.

Get Good Help!

(more…)

Inventory Watch

Here are the new actives and pendings for the last six weeks, and how they compare to previous years:

Week
2015 A/P
2016 A/P
2017 A/P
2018 A/P
Feb
83/64
80/72
66/73
87/57
Mar
99/68
123/52
102/66
84/62
Mar
93/76
101/75
99/59
107/67
Mar
101/84
90/75
93/82
88/59
Mar
89/81
94/64
82/60
99/55
Apr
80/58
112/72
104/70
87/66
Totals
545/431
600/410
546/410
552/366

The new pendings this year are about 10% below the last couple of years, and the common explanation you see in the media points to the lack of inventory.

But we’re having about the same number of listings between La Jolla and Carlsbad, they are just high-enders – the median LP currently is $2,495,000.

(more…)

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