I know that season of spring just started this week, but our home-selling season has been underway since the Super Bowl. It usually lasts until the graduation season starts in mid-May, then Memorial Day is the first long weekend in a couple of months. After that, people wil get busy with vacations and the market gets soggy as the unsold inventory starts piling up.
It means we have about eight weeks left of solid home-selling time.
While it was predictable that potential sellers would adopt a wait-and-see approach in early-2023, we can only hope they’ve liked what they’ve seen so far and will be coming to market in the next couple of months. This year’s NSDCC inventory has been 20% lower than last year (which was the previous record low).
Let’s go around the block and identify some of the action:
Davidson’s Starboard tract in LC Oaks – the neighborhood where I said we won’t see another house sell for less than $2,000,000 (last two sales in 2022 were $2,250,000 and $2,150,000). The only listing this year priced at $2,899,000 went pending in 4 days.
La Costa Valley – The first La Costa Villages tract built in the late-1990s with 1,073 single-family homes – shouldn’t there be some empty-nesters leaving? Four listings this year and only one under $2,000,000.
La Costa Ridge – One of the most expensive LCR houses ever was listed last year for $3,599,000 with no takers. They relisted last week for $3,748,800 and went pending in five days.
Encinitas Ranch – Between Jan 1-Mar 21, there were 10 listings last year, and five this year.
Carmel Valley – Between Jan 1-Mar 21, there were 90 listings last year, and 52 this year. The median list price is 3% lower this year.
You get the picture – fewer and fewer sellers. The total sales between La Jolla and Carlsbad are down about 25% YTD compared to the same time last year. But with inventory also down 20%, it means the demand is only slightly less than it was at peak frenzy when rates were half what they are today.
Hopefully there will be a surge of new listings over the next eight weeks, because the second half of the year could slow to a crawl without more homes to sell.
This is the type of premium offering that has enough going for it that they should get their money. The non-pool buyers probably won’t like it at any price, but those who want turnkey with big view on a culdesac will find it hard to pass up – here’s a minute of it:
The critical point in this video is when the second seller dropped 7% to make the sale after just three weeks on the market……even though that was 10% under the last sale that backed to power lines.
This is what can happen. Did they have bills to pay? Did the agent press them to take it? We don’t know, yet we consider every comparable sale equally and base our opinions on price alone.
The seller of the $2,225,000 sale had purchased it in 2013 for $1,109,000 and his mortgage amount was under $300,000. What’s a hundred thousand in either direction to him?
The previous high sale of this model was $2,100,000 in December, 2021.
The high sale before that was $1,750,000 in 2020.
The high sale before that was $1,320,000 in 2019.
Are we binary simpletons? Will the next seller and listing agent consider all of these variables? Or just go with $2,200,000 as the latest sale/current value and hope for the best? Or check the zestimate?? 😆
The next sale could go 10% to 20% in either direction, depending on the agent.
First of all, the calendar was perfectly set up for an extended holiday vacation and for everyone to not come back to work until this week. Mortgage rates are double what they were a year ago so nobody can afford a house, plus it’s been raining cats and dogs.
It would be natural to assume that the real estate market is ‘frozen’, and at best we will have a sluggish start.
Yet the early action between La Jolla and Carlsbad has been sizzling:
NSDCC Listings Marked Pending Since Jan. 1st:
What is impressive is how long these listings have been on the market – the median DOM is 55 days! Wouldn’t buyers lay off those for a few weeks to see where this is going?
Did the sellers dump on price?
Why would they dump on price with the selling season is right around the corner? Surely they would let it run at least 2-3 weeks into January before giving it away, wouldn’t they?
This is the easier part – charting the next six months.
Either the Fed will pause and delight us all, or their threat of higher rates will make buyers antsy and ready to pounce. The best-looking inventory usually happens in springtime, so all the necessary the ingredients for a selling-season surge should come together nicely.
Unless the home is a real trophy property, this isn’t the market that tolerates aspirational sellers. For those who will only sell if they get their price – you should wait this out….and it could take a while.
The high-priced listings might get showings, but mostly to buyers who are considering the better-priced home down the street. It will take another six months and some boost from a strong spring selling season before the listings priced at retail-plus will start selling again. And that’s probably optimistic.
I still think the 2023 Spring Selling Season will be boisterous, and the sales volume will pick up – but generally-speaking, I agree with Zillow that pricing won’t be rising. Here are Z’s latest predictions:
SE Carlsbad 92009
Del Mar – 92014
La Jolla – 92037
Rancho Santa Fe – 92067
Carmel Valley 92130
Less than 1% annual increases in prime neighborhoods? Yikes!
There is nothing wrong with being in Plateau City. Sellers just need to recalibrate and be smart about what it takes to sell a home in this environment:
Hire a great agent.
Spruce up the home.
Utilize effective staging.
Price attractively (be the best-priced active listing).
Make it easy to show.
That’s all – and if you don’t do all five, it’s ok because there’s nothing that price won’t fix!
An example of #1 is the now-famous property for sale in Del Mar on Border. A buyer thought they could get approvals to build a high-end resort there, but it was put to a vote, and the citizens turned it down. A new buyer is now hoping to turn it into apartments.