Will there be a point when the unsolds start affecting the buyer enthusiasm? Will the unsolds impact the ability of the hot new listings to fetch top dollar? Or will all listings be affected, like in the photo above?
NSDCC Active Listings
Buyers are finding it easier to forget all about the unsolds, and they won’t be coming back to lowball them later….at least not until the end of the year.
Will sellers lower their price? Today, sellers are thinking, “Hey, it’s only March, it will get better, later!”
At this rate, the percentage of stale listings will be into the 80s by the end of the month.
Everyone is waiting for “the market to pick up”, but it might be a long wait – longer than usual, and it might not happen at all.
Go all in – try to sell in the first two weeks when urgency is there!
Which sellers might have more luck getting lucky later?
Newer one-story homes
One-story homes
Newer homes
If you have an older 1970s or 1980s two-story tract house to sell, then your chances of selling are lower, and you might have to ‘give it away’ – unless you go heavy on the recent improvements!
I think most agents would agree that once their new listing has been on the open market – and unsold – for two weeks, the action dies down considerably.
Then the showings, if any, become vague and laborious because all of the motivated buyers have already seen it and passed. All that’s left is the occasional newcomer to the game who just begun their journey of learning the market. Or it’s a buyer-agent who is using this listing to set up the showing, and selling, of the better-priced home down the street or around the corner.
It’s made worse by the lack of quality buyer-agents. The older agents can’t keep up any more, and they have been retired – whether they know it yet or not. The kids don’t have enough experience or training.
The marketplace has been reduced to a single sentence. “Do you have any questions?”
The buyer’s answer is almost always the same…..”No”, and off they go.
The only thing left to wonder is whether there will be any negative impact from unsold listings stacking up everywhere. Will it bother the buyers who are still engaged?
Will they forget all about them, or come back later and lowball them?
Because lowballing is such a forgotten sport, I’ll guess that we will just get used to unsold listings laying around. Rancho Santa Fe is slowly getting back to its pre-covid norms of having a 10:1 ratio of actives-to-pendings (78:12 today), and it doesn’t appear to bother anyone. It’s accepted.
Because I feel the need to analyze everything, I’m going to institute a new gauge today and follow it over time to see the impact.
It looked like we were going to have 400 active listings between La Jolla and Carlsbad by the end of February. We haven’t quite hit it yet (though if you count the off-market listings, we’re well over 400 today).
Let’s call the new gauge the Stale Factor:
NSDCC Active Listings: 391
NSDCC Active Listings with 15+ days-on-market: 281
We have 281/391 = 72% of the active listings have been on the open market for more than two weeks.
It seems like a lot, doesn’t it?
Let’s see if the spring selling season starts picking up and the percentage goes down…or not.
Last week there were 386 NSDCC active listings, and today there are 343 – a difference of 57.
Impressively, there were 25 listings that were marked as ‘pending’ in the last week! But it also means that a load of the unsuccessful sellers of 2024 will be back early next year, with most relisting in January.
This year we began with 255 NSDCC active listings.
In 2025, there will be 300+ and dozens of others flooding back into the market.
Who are they?
We are a community dominated by empty-nesters. From last January:
Around 80% of the local homeowners have been here for more than eight years!
Those are the folks who have received $1,000,000+ in home equity since the pandemic.
It’s not hard to imagine that 10% to 20% of them will want to cash out in 2025!
An additional 15% to 20% of inventory next year (on top of the 14% surge in 2024) is in the bag.
Kayla is in town so we were trying to do the more-professional looking videos, which for me means doing a more-formal introduction of myself for those new to our Instagram channel.
On the same day, Robert Reffkin appeared on CNBC and said that research shows that inventory will climb another 15% in 2025 – which is what I said! Many observers will shrug it off and declare that we’re just normalizing back to pre-pandemic levels, but pricing has increased over 60% since then:
Will prices drop to adjust for more inventory?
There probably won’t be much movement on price early in the year, because sellers will be thinking about the spring selling season blah blah and they will be much more comfortable waiting until summer before looking for the panic button. They’re not in a hurry, and they’re not going to give it away!
The one thing we know for sure: Home sellers will want to get what the last guy got. Nobody is going to be listing with a low price in the first 3-6 months of 2025.
The results will all be up to the buyers – are you willing to pay the same prices for homes when active listings are piling up unsold? Everyone will expect you to!
He makes an interesting comparison between June and December.
It looks like this will be the first year in the last eight that could have a higher months-of-supply reading in December than in June. If so, it means there will be more than the usual active (unsold) inventory carrying over into 2025.
It’s been steady between La Jolla and Carlsbad lately, using the average number of actives for the month:
NSDCC Months-Of-Supply
June, 2024: 470/153 = 3.07
October, 2024: 470/165 = 2.85
Last month, there was a flurry of sales that keeps the ratio down for now, but the number of December sales should be quite lower. It looks like we could enter the new year with 400+ unsold listings, and I sugggested here that the healthy months-of-supply (active listings divided by monthly sales) is around 3.0. It looks like it the actual ratio will be closer to 4.0 by the end of the year.
Bill suggests that it will cause soft prices. I agree.
~~~~~~~~~~~~~~~~~~~~~
Lance says the SD inventory is +63% YoY – the highest of any metro on his list. Yikes!
With all the talk about the presidential election being so close, some thought it could take weeks to determine the eventual winner – and only a powerful Trump victory could avert it.
Standoff averted!
No matter how you feel about it, another Trump presidency should be good for home sales.
Why? Because we saw when Covid broke out that uncertainty encourages people to hunker down.
Buyers will be motivated to end their search before rates go much higher – which will be in the mid-7s shortly. If my predicted surge in inventory happens early in 2025, there will be plenty of homes to go around. Some will wait-and-see, but the highly-motivated buyers and sellers (the only ones that matter) will be pushing to make deals as soon as possible.
Who should put their home on the market right now?
The homes with big ocean views. December and January have clear weather and the best time to appreciate the view, unlike April-June when it is gray and gloomy.
Fixers – the homes that need work are easy to skip when the choices are plentiful.
The unicorns – the unusual homes that are hard to value.
Just when it looked like home sales were going to take a break….here we go!
There were 141 NSDCC listings that went pending in October, and 44 of them have already closed escrow! It leaves 133 listings in the pending category so the closed sales in November and December probably won’t set any records, but if there were 100 closings each month then I’d be impressed.
How about the closed sales? Smoking hot, compared to last year:
NSDCC September and October Sales and Pricing, 2023 vs. 2024
It all points to the 2025 Selling Season being robust, to say the least. It is going to start in January, and there might even be sellers who want to get a jump on it and list their home in December!
Here’s one more category (rich people fleeing) to add to my reasons why 2025 is going to bust loose:
A growing number of wealthy Americans are making plans to leave the country in the run-up to Tuesday’s election, with many fearing political and social unrest regardless of who wins, according to immigration attorneys.
Attorneys and advisors to family offices and high-net-worth families said they’re seeing record demand from clients looking for second passports or long-term residencies abroad. While talk of moving overseas after an election is common, wealth advisors said this time many of the wealthy are already taking action.
“We’ve never seen demand like we see now,” said Dominic Volek, group head of private clients at Henley & Partners, which advises the wealthy on international migration.
Volek said that for the first time, wealthy Americans are far and away the company’s largest client base, accounting for 20% of its business, or more than any other nationality. He said the number of Americans making plans to move abroad is up at least 30% over last year.
David Lesperance, managing partner of Lesperance and Associates, the international tax and immigration firm, said the number of Americans hiring him for possible moves overseas has roughly tripled over last year.
A survey by Arton Capital, which advises the wealthy on immigration programs, found that 53% of American millionaires say they’re more likely to leave the U.S. after the election, no matter who wins. Younger millionaires were the most likely to leave, with 64% of millionaires between 18 and 29 saying they were “very interested” in seeking so-called golden visas through a residency-by-investment program overseas.
There has only been a 15% year-over-year increase in the number of homes for sale in 2024, which isn’t that noticeable, especially to the casual observer. Plus, the top-quality homes still get swept off the market quickly, so there aren’t many great listings lying around unsold.
For an frenzy of inventory to be dangerous, it would take so many new listings to hit the market that there aren’t enough buyers to grab all the top-quality homes for sale.
There will always be the half-baked offerings looking to get lucky.
There is only a problem when the great homes aren’t selling (aka switching to a buyer’s market).
Though there has only been 15% more listings this year, the current active inventory is about 30% higher than last year. There is the sign that buyers are being more picky, and that the pressure on pricing is rising. Sellers either need to do more sprucing up, or sharpen their price. Some need to do both.
I have said before that I thought the market had been so dry that the pent-up demand would absorb a 15% to 20% increase in the number of homes for sale. Well, here we are! There have been 6% more sales this year, which didn’t pick up ALL the extra supply – just the best ones for sale.
I think we will call 2024 the year of equilibrium where the supply and demand has been more balanced than in recent years. I’ll resist calling it a ‘normalization’ because nothing feels normal these days! But statistically it looks like a decent balance.
What would happen if/when the flood comes?
If 15% to 20% was reasonably absorbed this year and it balanced the supply and demand, then any increase in 2025 above that would be nervous time.
How much growth above the 2024 homes for sale can the market endure?
I’m going to say not much more, and it’s why sellers should get out while they can in early 2025.
Adding ANY more inventory in 2025 above this year’s number of homes for sale would only get absorbed if rates drop to 6% or lower – which could happen – and the political circus dies down.
If the 2025 NSDCC inventory matches, or slightly exceeds, the 2024 red line below, then we should be fine. If it pops higher – and especially if it pops higher in January – then stagnation could set in as buyers wait-and-see where it goes.
You’ll be able to watch it all transpire right here at bubbleinfo.com!
Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.
jesus a sahagun
2024-11-10
Verified
This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.
SabihaPasha
2024-07-22
Verified
Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless.
So grateful that I had them on my side!
dodyfrancis
2024-07-10
Verified
I appreciate Jim & Donna's great teamwork, sound advice, and guidance that eased the stress of selling our Carlsbad home. Their professional input and assistance throughout the process was very helpful. Highly recommended!
sbisachsen
2024-07-10
Verified
The Good
The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market.
The Great
Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them.
The Outstanding
We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time.
The Truly Exceptional
Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs.
The Recommendation
For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...
user19164788
2024-06-21
Verified
We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready.
Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free.
Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.
cali4neal
2024-05-07
Verified
We had a wonderful experience buying our home with Donna and Jim! In particular I was very impressed with their efficiency and support through the purchase process. As we were doing the walk through, Donna started contacting roofers, plumbers, aircon, electricians, etc for all the areas we needed potential repairs - by the time we were done with the walk through appointments were already set up to get estimates for all the major services. When we had to change an appointment, or couldn't make one, Donna was there to arrange things to fit our schedule. Even after we closed on our home, Donna helped set up the repairs we needed before move in day. They truly went above and beyond to deliver exceptional service. I'll be calling them for our next home!
zuser20160809095816651
2024-03-16
Verified
The sale of our home exceeded our expectations - Jim and Donna Klinge are the best!
We’ve followed Jim’s Bubbleinfo blog since the 2006 housing bubble. After he helped us buy in 2017 we stayed in touch and Team Klinge were the obvious choice when it came time to move. They guided us through the preparation of the house, including a kitchen refresh - Donna and Lisa skillfully managed the various contractors for us after we had moved out of state. Donna’s excellent attention to detail and regular communication made the whole process run smoothly from a distance.
Jim’s market knowledge, expert negotiating skills and candid opinions, together with Donna’s responsive communications and problem solving, set them in a league of their own.
Highly recommended!
bourmakin
2024-02-09
Verified
Jim and Donna have exceeded my expectations with sale of my house. It was best experience with house sale. Professional, responsive, superior negotiating skills. I would recommend them with 5 star (I would give them even more than max) rating. Sale of my house was closed for really good price in 10 days. Jim and Donna perfectly handled house preparation for sale. Thanks a lot!!!
user1916779
2023-11-17
Verified
Jim and Donna have exceeded my expectations and made my most recent move back to California go so much more smoothly than I expected. Jim’s Bubbleinfo blog was full of useful information about the current market conditions. His experience helped us make a successful offer for the home we wanted in a desirable neighborhood. After the purchase Donna organized the work we needed done in the house without us having to make an additional trip. We were pretty worried when we started searching for real estate that not being in the area was going to makes things really difficult but Jim and Donna made the process so much easier. I enthusiastically recommend them.
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