Over List, January

The local market isn’t at the frenzy level, but can we at least call it stable?

Last month there were 18% of the sales that closed over their list price. There were 41% of the sales that closed for at least $100,000 under their list price. If roughly 60% of the sales are getting close to their list price or over, then I think that feels like a fairly balanced market.

For the last five months in a row, the year-over-year monthly sales have been higher! The average and median pricing look stable too.

NSDCC Average and Median Prices

Once we get past the Super Bowl, the market should really get cooking! Last February, the over-list percentage was 30%, and then March was the high point for 2024 with 44%. I doubt we will hit either one of those again this year, and I’ll just settle for more YoY sales for the sixth month in a row.

Over List, November

Another month where the percentage of buyers who paid over the list price was around one out of five, while exactly HALF of the buyers paid at least $100,000 UNDER the list price!

There were 11% of the sales where the listing agent also represented the buyer too.

September, October, and November sales all exceeded their sales in 2023 – momentum is building!

Over List, October

The percentage of buyers who insist on paying above the list price has leveled out around 20% over the last three months.  Even more interesting are those who pay $100,000+ OVER LIST when so many more are paying $100,000+ UNDER:

PAID $100,000+ OVER LIST: 14 (8%)

PAID $100,000+ UNDER LIST: 63 (38%)

But sales and pricing are strong lately, compared to last year – and note that the average and median sales prices are the highest on the chart (except for the crazy outlier in June):

Over List, September

There are so many signs that buyers don’t have to pay over the list price Why do they keep doing it?

  1. Tired of waiting.
  2. Don’t want to miss another one.
  3. Agent only knows to offer more.
  4. Listing agent gives them the impression that there are multiple offers.

The softness is fairly easy to see.

NSDCC September Sales:

Closed Over the Original List Price: 21%

Closed $100,000+ OVER the List Price: 8%

Closed $100,000+ UNDER the List Price: 46%

The 8% vs. the 46% should be noticeable to even the casual observers, shouldn’t it?

Yet, the favorite pricing metric is back above $2,400,000 (which was April/May 2022 levels):

Changing Market Conditions

The presidential election is less than 60 days away and even if one of the candidates is a clear winner at Tuesday’s debate, the fight will get nasty from here on out.

The distraction is likely to cause potential home buyers to want to wait-and-see. Thankfully, the hope of lower mortgage rates will keep more than just the bottom-feeders in the game – but the serious buyers will have to dig out a deal, because the sellers are being tough on price. Why? They have comps!

It was noted earlier how the market shifted in the middle of May.

In the last 90 days, there have been 531 closed sales between La Jolla and Carlsbad. Their stats:

Median LP: $2,399,000

Median SP: $2,370,000

Median Days on Market: 14

Any casual observer will quickly conclude that the market looks to be in fine shape.

Just the fact that there have been 531 sales sounds pretty good!

But it is easy to miss. What can we learn from the active (unsold) listings?

To derive some conclusions about the overall market conditions, let’s examine the 83 actives priced under $5,000,000 that have been on the market for more than 60 days. After they have been on the market for 2-3 weeks, the showings dwindle down to zero or close, so the market is talking if they’re listening and want to do something about it.

Of the 83, there are 26 who haven’t lowered their price, and three that have raised their price! That’s 35% whose motivation is so low that they’re going to wait until the right buyers come along.

For the most part, those who have lowered their price didn’t do much. We are now in the post-summer soft-and-getting-softer environment, so a meaningful price reduction needs to be 10% or more to get anyone’s attention. Here are samples of the current NSDCC active listings:

Those who have dumped more than 10% and are still unsold are asking themselves, ‘what’s it going to take?’. We just saw that 20% of last month’s sales were still closing OVER their list price – what gives?

The difference is the condition of the home.

The most amazing frenzy of all-time lasted for two years and spoiled everyone. Not only did homes not need to be fixed up much, but the pricing could be sloppy too and yet virtually every house was selling. There were times when 70% to 80% of the homes sold were closing over their list price!

We’ve had an astounding change of market conditions in a relatively short period of time to think that we went from that 70% to 80% to now 20% or less closing over list. It means those 20% are the really spectacular buys, and those seemingly premium listings now need to have aggressive pricing and/or be substantially improved recently to have a shot at getting their price.

Sellers need to be doing everything better. Do more improvements (especially on curb appeal), better staging, premium photography/video, more-attractive pricing, and hire the best agent you can find!

How do you know about the agent? They are talking about the shift, and what to do about it!

Get Good Help!

Over List, August

The trend of over-list sales is already heading for the off-season. There were just 36 sales (20%) that closed ABOVE the list price last month. Of those 36, there were 16 that paid $100,000+ over the list price.

In contrast, there were 66 sales (37%) that sold for at least $100,000 UNDER the list price.

Man, those are treacherous market conditions! Do you offer $100,000 over or under?

Get Good Help!

Over List, July

The trend of paying over the list price appears to have stabilized.

The 212 July sales makes it look like there was quite a surge after a couple of slower months, so buyers must have gotten excited! But the median price has settled in at $2,300,000:

The median sales price probably won’t change much the rest of the way in 2024, but sales could bounce around. There have been 110 NSDCC closings so far in August, so it won’t get close to 200 sales this month. But there is a bit of a surge going on right now so September closings could be decent.

Over List, June

The over-list sales help to identify the enthusiasm in the marketplace.

Looking back to 2021 and early 2022 on the graph above, you can sense how wild it was with most buyers paying more than the asking price. But since then mortgage rates have doubled, and the insanity has settled down.

The usual seasonal downturn in over-list sales got an earlier start this year. In 2023, they were steady through the summer, with the first sizable drop down to 24% not happening until September.

Last month the over-list sales dropped to 27%, which was the lowest June percentage by far.

The June median pricing looks shocking but it is easy to explain – it was an one-month outlier when the sales of lower-end homes didn’t happen as usual:

NSDCC Sales Under $2,500,000

May: 103

June: 71

July: 117

I included the preliminary July stats below to help demonstrate how the median sales price can bounce around. Your home’s value didn’t go up 14% one month, and then drop 14% the next month – it’s the quirky semi-accurate measuring stick:

Let’s talk about July sales though! After the drastic decline in monthly sales since April, it sure seemed like the market was going to be doomed for the rest of the year. What a rebound!

It could be the last hurrah though as buyers scramble to grab a house in which they can hunker down. There are only 153 pendings today, so the number of monthly sales should resume their descent in August.

Over List, May

Sales that close over their list price are tapering off now.

It’s not as bad as it was in 2022 when rates began their rise, but you can see that last year the percentage was steady through summer. Maybe our faster start this year exhausted the enthusiasm earlier?

Of the 38% of sales that closed over list, just over half of them were under $2,000,000.

The pricing enthusiasm is cooling off too. Note the relationships between the DOM (days on market) and the discounts below. Exactly NONE of the these homes sold over their list price after they were on the market more than seven days:

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