The first quarter report! Better than expected, and with rates dropping to 4% and under, the second quarter is shaping up nicely:
Mortgage rates have continued their slide, and lenders should be offering fixed-rate loans with rates starting in the threes again, with little or no points! The new pendings are flowing, but we still haven’t seen a flood of new listings:
NSDCC Detached-Home Listings and Sales in March
The latest numbers are month-to-date, and will increase considerably with four business days to go. But the March sales will end up well under last year’s count, though the lower rates should help boost sales in April and May.
There are threes on the street:
For those who want to prepare for making an offer and would like to review our contracts, the California Association of Realtors have made available a sample copy with explanations:
Don’t be surprised if it’s a little clunky.
Rich is seeing it like we are – pricing has been fairly flat lately.
Click here for his full report:
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:
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:
Pricing is soft, but close enough for now.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 4.6 percent to 103.2 in January, up from 98.7 in December.
Year-over-year contract signings, however, declined 2.3 percent, making this the thirteenth straight month of annual decreases.
Lawrence Yun, NAR chief economist, had expected an increase in January home sales. “A change in Federal Reserve policy and the reopening of the government were very beneficial to the market,” he said.
Of the four major regions, three areas experienced a decline compared to one year ago, while the Northeast enjoyed a slight growth spurt.
Yun also said higher rates discouraged many would-be buyers in 2018. “Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”
Additionally, Yun noted year-over-year increases in active listings from data at realtor.com® to illustrate the potential rise in inventory. Denver-Aurora-Lakewood, Colo., Seattle-Tacoma-Bellevue, Wash., San Diego-Carlsbad, Calif., Los Angeles-Long Beach-Anaheim, and Nashville-Davidson-Murfreesboro-Franklin, Tenn., saw the largest increase in active listings in January compared to a year ago.
Yun says positive pending home sales figures in January will likely continue. “Income is rising faster than home prices in many areas and mortgage rates look to remain steady. Furthermore, job creation will help lift home buying.”
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.”
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
|$1M to $1.5M|
|$1.5 to $2.0M|
The only two signs of trouble:
- The Under-$1M market is disappearing.
- 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!
The number of houses for sale between La Jolla and Carlsbad is already 20% higher than last year – but we can live with more unsold inventory lying around.
If sales can hang close (80% or more) to last year’s count, we’ll be fine.
So far, so good!
NSDCC Detached-Home Sales, January:
The Big Game is over, so many will turn their full attention towards moving!
We’re off to a good start:
- Mortgage rates are about the same as they were last year,
- The NSDCC inventory isn’t exploding, and
- The NSDCC Pendings have jumped up 19% in the last two weeks!
You can see in the graph above that sales start right away, and March closings are substantially higher than in February. Also note that by mid-summer, sales were dropping off quickly too.
We should have three hot months this year – at least!
Just yesterday we see news that the housing inventory is already way higher than it was last year, and certain doom must be ahead.
But we can live with more houses laying around unsold, as long as at least some are selling to help give direction to all.
We can probably break it down to two categories:
- Is nothing selling, and doom is on the way?
- Or are just the creampuffs selling?
Here’s our first sales count of 2019.
NSDCC Detached-home Sales, January:
(as of 11am on 2/3)
Whoa now – I’ve been talking a 20% decline, and December sales were pointing that way. But by the time all of the sales get recorded onto the MLS, we should match last year’s January count, and probably do better!
It ain’t over ’til it’s over!
No surprise the trend shows the higher the price, the softer the price increases.
The lower-end market keeps humming along, while the higher-end market isn’t – and the connection between the two is getting fuzzier by the day.
With the struggle of moving up or down being very real, we could see more disconnect between markets.
Let’s keep this in mind when analyzing trends – it’s more complex than ever.