Showings are really down over the last 30+ days – the current weekly average is -66%, compared to the first week of January.
But there’s just nothing left to look at today, unlike last year when inventory was much higher. The second half of this year had 35% fewer NSDCC listings than in the second half of 2020.
The 2022 demand should be very pent-up!
It looks like the California showings are reflecting the lack of new listings coming to market.
For the last few months, it has felt like January (which is what this graph is indicating). Not many decent listings to consider, at any price – and hopes for something to change soon!
Home buyers don’t have much – if any – control over the process, which leads to frustration and disappointment. They don’t have any way to cause more homes to list for sale, and the only way to eliminate the competition is to out-bid them, which can be even more harrowing.
One solution is for buyers to expand their parameters, but that’s not easy and can lead to another ailment that a client described yesterday as “frozen in indecision”.
Just when you want to give up……it looks like others might have beaten you to it!
Showings throughout the state are lower than they were during the first week of January!
It’s been mentioned that not every agent uses this service, but it is such a large sample size that the trend should be a decent indicator of buyer sentiment – they’re exhausted.
Sure, active listings are half of what they were at this time last year, but the showings are 260% different!
Just like with selling, when is the best time to be a buyer? When no one else is!
We already know what’s going to happen with sales in 2022 – they will be the same as this year, with a possible adjustment of +/- 10%.
But the rest of 2021 could get wacky!
It looks like the competition is dwindling, and any seller who comes to market around the holidays has to be motivated! Buyers – stay in the hunt!
It’s one thing to note that showings are well under the peak frenzy era of August-November. But today’s showings are also well below what they were in July 2019, which was a fairly flat market then.
Is the demand falling apart?
Or is it due to lower inventory?
Let’s compare the inventory counts for middle of August.
NSDCC Number of Homes For Sale
| Price Range | |||
| $0-$1.0M | |||
| $1.0M-$1.5M | |||
| $1.5M-$2.0M | |||
| $2.0M-$3.0M | |||
| $3.0M+ | |||
| Totals |
*In 2019 the highest category was Over-$2,000,000 – the categories were split the next year.
The total counts are distinctly different.
In 2019, the market was sluggish, and the local Case-Shiller went flat for the last six months. There were too many homes for sale.
Last year, the increased demand was met with a much tighter supply than in 2019, but looking back we can say it was the optimal amount of homes for sale in order to create the red-hot frenzy!
Now, there aren’t enough homes for sale to keep the momentum going, and the frenzy is being starved out.
Speaking of other states, how is the cooldown playing out elsewhere? Nevada and Texas are holding up, but towards the end of May, Arizona and Florida started to taper like we did here – and Arizona has been sliding all selling season (maybe due to lack of inventory?):
California is at the 0% line today, which is the same amount of showings as in the first week of January. Arizona and Florida are well under that!
Fewer showings than in the first week of January?
Well, the market was cooking right up to Christmas and then fired up quickly again this year, which created a solid 12-month frenzy.
But now there are fewer showings than in 2019 too? How did that turn out?
You can say it was a little flat, price-wise:
Whether it’s due to ‘seasonality’, higher rates, lower inventory, blah, blah, it doesn’t matter.
The remaining buyers left have to be exhausted – losing bidding war after bidding war takes a toll, and by now people want to give up.
Welcome to Plateau City.
There will still be eye-popping sales, just not as many.
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Another data point showing the frenzy lift-off in May, 2020
There is a collective mindset.
For the last year, real estate has been hot around the world. When California gets cooking, so do all the neighboring states. And when America gets cooking, other markets around the world benefit too.
There are varying degrees of hot, but we can say that real estate markets everywhere have been operating at their peak capacity.
We’ve had a year of full-tilt frenzy and sales were SPECTACULAR!
But yesterday we got the first headline from Doomer Diana that should be a marker:
Thankfully, not many people will read her article where she states that higher prices and rates are the cause of the ‘fizzle’, which is a knee-jerk reaction. She and others will blame the buyers for any slowdown.
Good thing she didn’t see the the graph at the top that has showings lower than in June, 2019, and you remember how that ended (the San Diego Case-Shiller flat-lined for the second half of 2019).
It will be common to blame the buyers. But for the first time ever, our real estate market is having a critical shortage of homes for sale when the demand is exceedingly high. There were 500 people who visited a $1,700,000 Carmel Valley house over the weekend. Demand is not our problem, it is the lack of supply.
I’ll back it up with some stats shortly.
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June will be a critical month for sustaining the momentum.
Will we run out of buyers? Or will they give up and go on vacation?
Or will there be so few listings that we can’t tell?
We have another disrupter who is providing a service you didn’t know you needed until now.
Traditionally, a buyer’s agent accompanies their clients to show them the homes for sale, and to give expert advice about each house while on site. But other real estate companies – who don’t appreciate that valuable service – have dumbed it down by just paying door-openers that allow buyers into the house, but leave them on their own to figure out the rest.
A new company has taken it one step further, and is providing an Uber-like service where random agents can get paid for opening doors for other agents.
The company charges $39, and pays $24 of it to the door-opening agent – who agrees to not offer advice to the buyers, and to direct them back to the agent who paid the $39 showing fee.
Will it happen some day that the buyers will be charged a fee to see a house?
This year’s orange line has plateaued. It’s been in the 70% range all month, meaning there has been 70% more showings each week than there were during the first week of the year.
Even though it’s twice as much, it mirrors the 2019 trend that the spring selling season is underway, and I think we can assume that every buyer who is thinking about moving in 2021 is out looking at homes.
The buyer pool is full, and engaged. Sellers, no need to wait!
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
