by Jim the Realtor | Apr 19, 2024 | 2024, Market Conditions, Market Surge, North County Coastal, Spring Kick |
Pardon the casual presentation. I’m used to working with this same basic graph format but it’s limited to 50 datapoints – we’d really like to take these back a few years to see the long-term trends.
But in early 2023, the active listings in the $3M – $4M category were range bound between 1,170/sf and 1,342/sf, so there is some normal optimism in springtime. But not like this pop in 2024 (above). These two subsets are the meat of the market, and aren’t swayed by radical outliers that would tweak the averages.
Starting right after the Super Bowl, there was a huge swing from $1,252/sf to $1,515/sf in the $3M – $4M category, and it has stayed elevated until the last couple of weeks. The reason for pricing to relax a little?
The number of unsold listings are starting to stack up now:
There isn’t any reason for home buyers to think mortgage rates are going to drop significantly this year. If there were one or two Fed cuts, it would only cause mortgage rates to get back into the 6s which isn’t enough to compensate for the sky-high prices that buyers are seeing today.
Then we have the changes from the commission lawsuit, which will have a clunky start over the next few months as buyers grapple with hiring a buyer-agent in writing just to tour a house. All we need is the Padres to go on a run this summer and we will have all the excuses we need for a very sluggish rest of the year.
by Jim the Realtor | Feb 20, 2024 | 2024, Jim's Take on the Market, Market Conditions, Spring Kick, Why You Should List With Jim
The blip in active listings over the last week isn’t too concerning and could just be from the weather.
The count of active listings is a good indicator of the demand though. During the mega-frenzy conditions from late-2020 through early-2022, you can see that the new listings were being gobbled up as quickly as they came on the market, and there was no build-up of the supply. Last year, the demand was hot enough in the early months that the active-listing counts were fairly flat too.
If this year’s count of active listings surges above 400, it will mean that we are exiting the frenzy days, and the market’s normalization is underway.
It is subject to the overall number of listings, and I’ll reuse yesterday’s chart to show the flow:
NSDCC Listings and Sales, Jan 1 – Feb 15
The total number of listings in 2024 is still in the frenzy range.
It’s the number of active listings that help demonstrate the velocity of the demand. Are they being gobbled up as fast as they hit the market like in recent years, leaving the number of actives fairly steady? Or are the actives starting to pile up, like they used to do? (see the 2019 green line in graph at top)
This is how we will know where the Spring Selling Season is going.
Buyers already have reason to be cautious and wait patiently because Powell opened his big yap and said he was going to lower his rate THREE times in 2024.
If the active listings break out of the frenzy range and start stacking up unsold, it will be irresistible for buyers to wait longer to see if sellers capitulate on price, while hoping rates might come down too.
Want to know where the market is going? Just watch the number/trend of the active listings!
by Jim the Realtor | Jan 26, 2024 | Bidding Wars, Contests, North County Coastal, Spring Kick |
After a disappointing number of sales last month (87, the lowest monthly count ever), January is poised to reach 100+ sales. There are 128 houses in escrow today, and 39 of those were marked ‘pending’ prior to January 1st so probably 20+ of those stand a good chance of closing by the end of the month:
NSDCC Monthly Sales
Although the severe drop in sales recently can be attributed to higher mortgage rates, higher prices, etc., you can’t sell what’s not for sale:
NSDCC January Listings
With the number of listings up to 183 this month, we should reach the 205 listings we had last January. Will the last few people on our list still have a fighting chance, or should we hand the Padres tickets to Joe?
Here are the contestants:
Contest to Guess the Total Number of NSDCC January Listings
142 Anne M
157 Skip
160 doughboy
170 Dale
174 SurfRider
176 LifeIsRadInCbad
180 Kingside
188 Stephanie R.
189 Chris
190 Tom
192 Sara G.
196 Derek
200 Curtis
208 Rob Dawg
210 Bode
213 Shadash
217 Nick
222 Majeed
223 Joe
With slightly more inventory, similar pricing and rates, and pent-up everything, the 2024 Selling Season should be as hot as it was last year. This week, I had buyers survive an 8-offer bidding war and win by submitting the now-customary $100,000+ over the list price, and there have been crazier sales already:
by Jim the Realtor | Dec 14, 2023 | Forecasts, Interest Rates/Loan Limits, Jim's Take on the Market, Spring Kick |
Yesterday, Jay Powell shocked the world by declaring three rate cuts in 2024! It was Fed speak of the most unusual order – open and transparent, instead of the opaque mumbling of previous chairmen.
The predictions are for rate cuts early in 2024 too. The CNBC survey showed a 90% probability of a rate cut at the Fed’s March meeting, and 100% chance at the May meeting. This Fedwatch Tool below thinks they will all be in the first half of 2024:
What does it mean for the 2024 Spring Selling Season?
Real estate prognostications are usually wild guesses without any supporting data. But next year looks more predictable than ever – and we’ll be able to track it closely.
Let’s consider how 2023 played out:
In June, I mentioned that 2023 got off to a very fast start, and that March would have the highest sales count of the year – which means buyers and sellers were active in January and February!
We had a mid-summer surge too, and the August sales beat out those in March by a nose.
Because the price points are so much higher these days, every property is a luxury home that appeals to the affluent. It means the homes for sale need to be spruced up more than ever, which takes planning and preparation for weeks and months.
We already know that our team will be listing homes for sale on January 18th and 25th, and there should be many more others doing the same. With the 2023 inventory being so bleak, the pent-up buyers will be noting the lower mortgage rates and be on the prowl early.
We will do our annual January inventory contest to give everyone a feel for how the number of homes for sale is breaking early in 2024. Between the number of January listings and the results of our listings, you’ll have quality data on how the 2024 market is unfolding!
My guess is that there will be 10% more listings in January, and combining that with lower mortgage rates could set off a mini-frenzy!
Pricing was steady this year, and it should bump around by the same +/-5% in 2024. It’s probably not worth it to try to predict your purchase or sale by the price history – it will bounce around just because the metric is flawed.
by Jim the Realtor | Dec 10, 2023 | 2024, Market Buzz, Market Conditions, Spring Kick |
Mortgage rates have come down 1% in the last few weeks, and the casual observers are hoping it means that the Big Turnaround will commence in the Spring of 2024.
But for a full-fledged frenzy to break out, home prices would have to drop too.
We’ll never learn much from the median sales prices by themselves. But the SP:LP ratios demonstrate the off-season trend of buyers driving harder bargains, which is the solution for lower prices too.
We’re probably not going to see the whole market drop in price (i.e., big dips in the median sales prices) because the superior properties should hold their value better with the impatient buyers.
But those who don’t need the perfect house will likely have better luck next year with getting a deal. We only flirted with an over-list frenzy briefly this year, and in 2024 we not see many, if any, 100% months.
by Jim the Realtor | Apr 21, 2023 | 2023, Frenzy, Spring Kick
To hear more stories like this and a wide array of opinions, click here:
https://twitter.com/SullyCNBC/status/1649240769658605570
Remember when I was on CNBC with Sully in 2011? He used to live in Carmel Valley!
by Jim the Realtor | Apr 20, 2023 | 2023, Frenzy, Spring Kick
In this graph from two weeks ago we saw that there were 28% of the NSDCC detached-home sales in March that closed over their list price. Because it’s one of my favorite ways to judge the market conditions, I did a check on the numbers for April so far:
NSDCC April Sales (preliminary)
Closed sales: 85
Closed over the list price: 36%
It’s not just on the lower end either:
Of the 85 closings, 41% were all-cash!
by Jim the Realtor | Apr 13, 2023 | 2023, Frenzy, Frenzy Monitor, Spring Kick
We are in the middle of the home-selling season, which means this will be as good as it gets for 2023.
The balance of buyers and sellers has been remarkably steady. Over the last 90 days, the number of active listings has been in a tight 10% range, and the pendings haven’t budged, really, since the Super Bowl.
Those who planned ahead about selling during the season should have listed their home by now. There could be some daredevils who are waiting another 2-3 weeks before going live, thinking that a few more comps might close and help them achieve an extra 5% or so – but it could go either way.
by Jim the Realtor | Apr 11, 2023 | 2023, Frenzy, Jim's Take on the Market, Spring Kick
The recent bounce-back has been impressive with 183 NSDCC closings in March, which is better than the sluggish start that I expected.
The 101% looks like a good sign too.
Was it an overall market improvement that will keep growing? Or just a lucky stretch of higher-quality homes coming to market early in the season?
Here is more texture. The market time is improving, though not to the uber-frenzy level of last year:
This note about the March sales was the most interesting:
- House sales closed for $100,000 or more OVER the list price: 20
- House sales closed for $100,000 or more UNDER the list price: 51
I think we’ve entered a new frenzy-lite phase where the buyers are more deliberate in their actions, and holding out even more for the higher-quality homes – but willing to pay the premium for them.
by Jim the Realtor | Mar 22, 2023 | 2023, Spring Kick, Why You Should List With Jim |
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.
