And only three for sale under $1,100,000!
It’s not the end of the world, though.
It’s not even the end of homes for sale under a million – there will be others.
But it is the velocity of the frenzy that is astonishing.
Detached-Homes For Sale Under $1,000,000 Between La Jolla and Carlsbad, 2nd Week of August:
Leading up to 2020, the market was balanced, orderly, and behaving about like you’d expect. Buyers were critical, and there were plenty of homes not selling.
Then a virus hits, and blows the roof off!
The best part about returning to normal is dropping the requirement of having to sign the covid disclosure – known as a ‘pead’ – just to see a house. I don’t mind the paperwork, it’s the badgering by listing agents to submit the form immediately before anything else can happen – like scheduling a showing. I hope we get back to talking about sales!
The California economy will reopen on June 15th and, with limited exceptions, will return to normal operations.
Q1. Will there be any restrictions on open houses or showings?
A1. The only legal restriction will be for wearing masks, otherwise there will be no restrictions. No physical distancing will be required for attendees, guests and customers. No cleaning. No posted rules of entry. And no PEADs or any other type of sign in. No one will have to agree to an office prevention plan. No one will have to attest to their current health status.
Q2. What will the rule be for wearing masks?
A2. The rule is: People must wear a mask indoors unless they are fully vaccinated. This follows the CDPH Guidance for Face Coverings (last updated on June 9, 2021). For fully vaccinated persons, it will make no difference that other unvaccinated persons are present indoors. As long as a person is fully vaccinated, that person need not wear a mask.
Q3. Are there any exceptions from the mask wearing requirements?
A3: Yes. The following individuals are exempt from wearing masks:
- Two-year-old children or younger.
- Persons with a medical condition, mental health condition, or disability that prevents wearing a mask, or are otherwise unable to remove a mask without assistance. For example, a person for whom wearing a mask could obstruct breathing.
- Hearing impaired persons who need to see the whole face for communication or be understood.
- Persons whose work exempts them by law.
Q4. My seller wants to require that everyone entering the property wear a mask or be vaccinated. Can the seller require this?
A4. Yes. The seller can set their own rules as to who will be admitted to the property.
The seller can:
- Require all visitors to wear a mask.
- Require all visitors to be vaccinated or show a negative COVID test.
- Implement a vaccine verification to determine whether individuals are required to wear a mask.
- Provide information to all visitors regarding vaccination requirements and allow vaccinated individual to self-attest that they are in compliance prior to entry.
If your seller would like these rules implemented, you will need the seller’s consent. Your office may require that the listing be formally amended. You may add optional language such as, “with the exception of _____________________________________ .” or “The following showing requirements shall be followed: ______________________________________.”
On a separate note, if the Listing Agreement Coronavirus Addendum or Amendment (C.A.R. Form RLA-CAA) has already been signed, you may want to now add a Modification of Terms by writing the following into the Other paragraph: “The RLA-CAA, dated ________, is terminated.”
Q5. What is the practical advice for a seller and/or a broker regarding mask wearing requirements?
A5. The practical advice is to adopt a policy that requires everyone to wear a mask. It’s true that a fully vaccinated person after June 14 need not wear a mask, but then that puts the agent in the position of having to ask everyone about their vaccination status. Rather than do that, wouldn’t it be simpler and easier just to adopt a blanket rule that everyone visiting a property wear a mask? Discuss your approach with the seller to obtain the seller’s agreement.
Here’s a snapshot from C.A.R. of the current rules with tenants and landlords:
More can be found at the state’s website here:
Thanks to just some guy’ for sending in this article comparing prices, rates, and inflation:
It’s a feel-good idea that inflation and lower rates can ease the pain of higher prices. But recent pricing has been really painful for buyers! Let’s apply the data to our local action (using 80% of MSP):
NSDCC Detached-Home Sales, February
||# of Sales
It’s a nice idea, and higher rates did cool things down a bit in 2018. But today’s market is so explosive that we are blowing through all the usual stop signs – look at the number of sales!
My guess is that there will be additional sellers pulled forward from future years, just like with buyers – it’s too lucrative and tempting to find a way to sell now. Might it mirror the covid-recovery trend line?
This guy analyzed the changes in mailing addresses on credit reports to determine who moved where:
Did the COVID-19 pandemic start an urban exodus? The estimates presented here strongly suggest that migration flows were unfavorable for urban neighborhoods during 2020. However, the word “exodus” emphasizes that migrants are leaving a particular area in large numbers. If we look at the gross flows underlying the trends, we can see that the declines of in-migration are almost always greater than the increases in out-migration. Out-migration did increase in many urban neighborhoods, but the magnitudes probably would not fit most definitions of an exodus. What is certain is that hundreds of thousands of people who would have moved into an urban neighborhood in a typical year were unwilling or unable to do so in 2020. These people may be harder to identify, label, and interview, but they may be best positioned to tell the real story.
Link to Study
After an insanely unpredictable real estate market in 2020, will our strong sellers’ market continue in North San Diego County’s Coastal region? Probably, but it should be more balanced.
Mortgage rates around 3% (and under) will continue through at least the first half of next year, but how about the low inventory? The number of homes for sale today is 38% fewer than it was last year at this time, so it appears 2021 will start out with the lowest inventory ever for any new year.
But I don’t think it will last.
Do we have pent-up supply waiting to burst onto the market? Here are my categories where I think we will shave additional homes come up for sale, roughly in the order of the most-likely contributors:
1. Move-Uppers – Covid-19 changed what we want from homes. Low rates/high equity make it possible!
2. Baby Boomers – A survey said that half of seniors delayed listing their home in 2020 due to Covid-19.
3. Politics/Taxes – Many Californians have had enough. The migration trend to other states should ramp up.
4. Work From Home – This trend frees up many to move…..up and out!
5. Forbearances – Lenders will be lenient, but some in default will tap their equity, rather than risk losing it.
6. Prop 19 – Enables 55+ homeowners to take their low property-tax basis with them. Though this won’t be the sole reason to move, it makes for a nice sweetener – and may be the last straw to make it worth it.
7. Divorce Rate is Up 34% – Technically, this could add more sellers AND buyers, but realistically those coming out of a divorce will be more likely to split their equity and take a break.
8. Unemployment – Older homeowners will grapple with taking a pay cut or quitting the job-search altogether – and retiring earlier than expected won’t seem so bad when their home’s equity has never been so high. More boomer moves that would have happened in 2022-2025 will be pulled forward.
9. Eviction Ban – In the second and third quarter of 2020, there were 11% of renters who missed a payment. Mom and pop landlords will begrudgingly sell and pay the capital-gains tax, rather than risk another episode like this one.
10. Capital-gains tax. – From the WSJ: Biden will raise the tax on the capital gains of high earners to the same rate as wage income, increasing the rate to 43.4% (39.6% plus Medicare 3.8% investment tax) from 23.8%. Mr. Biden on Thursday estimated that these increases on high earners would raise $92 billion, but that’s before they put their tax lawyers to work. Biden has also said he will eliminate the 1031 exchanges, but all of the above will need Congressional approval. Just the thought could cause landlords to hurry up their plans of selling.
The potential home sellers that are in more than one category (and have more motivation) will be the first out – which means we should get off to a fast start in 2021. We probably won’t see a flood, but it will only take 10% to 20% more sellers to change the game dramatically.
Posted on Facebook by Miranda Klassen – I imagine all hospitals could use a hand:
Asking for help to support my husband Bryce and the ICU staff at Scripps Memorial Hospital Encinitas.
They have been exceedingly over capacity for weeks with no sign of slowing. They are exhausted and many are working double time. They are dealing with not only very intense patient care and loss, they are fielding calls from people out of state seeking a bed, calls from private citizens questioning whether they are at capacity, and now managing the logistics of vaccinating their staff knowing to expect an immunologic response.
Bryce is often asked, what is “really” going on?
At the peak in Spring/Summer the highest Covid positive patient load was in the 20’s. They have been consistently above 50 AND an entirely full ICU of non Covid positive patients. On average there are 20 staff members per shift.
Here is how you can help:
- Letters of encouragement and gratitude. (Their favorite)
- Pictures /Posters from kids (another favorite)
- Holiday cards from previous patients
Donations of items to give them a much needed boost.
- Keurig pods
- Breakfast bars
- Oatmeal packets
- Individual cereals
- Bars (granola, energy, nuts, etc)
- Packaged snacks, crackers, chips, nuts, jerky, etc.
- Candy bars
- Baked goods
- Healthy bottled juices/smoothies
- Bottled/Canned coffee and tea
- Bubble waters like La Croix, Bubbly, etc.
- Protein drinks
- Gift cards or Discount cards
- Catered meals preferably individually packaged.
Larger items such as baskets, individual gifts, and gift cards will be used for raffles or recognition.
I will pick up or you can mail directly to the hospital. (she also said dropoff is ok too)
Scripps Memorial Hospital Encinitas
Intensive Care Unit
Attn: Bryce Klassen, Supervisor
320 Santa Fe Drive
Encinitas, CA 92024
It looks like we are going to set new records in every category this year – and not by a little!
NSDCC Annual Sales & Pricing
||# of Sales
||Median Sales Price
||# of $2M+ Sales
The 2020 numbers are year-to-date.
Based on last December’s count, we should be around 3,180 sales by the end of the year! It will be the highest number of annual sales ever!
P.S. We did have the identical number of sales in 2015 and 2016.
Last year, the showings in early December ended up about where they were during the previous January. But this year we had a huge post-Thanksgiving bounce, and are now 175% above the same time last year!
Next year is going to go nuts!
The average length of homeownership has been 10-12 years…..until now?!?
Nearly half of Americans are considering a move to a new home
Of those considering a move, more than 1 in 4 (27%) want to stay within their current area. The main driver behind this sentiment is a desire to reduce living expenses, which is true for 44% of respondents.
Rounding out the top five reasons behind a potential move are:
- “My current home is too small” (27%)
- “I’m looking for different features” (27%)
- “I’d rather live in a different part of town” (12%)
- “I don’t like the management of the property I’m renting” (11%)
“The economic crisis has adversely affected the finances of many Americans,” said Tendayi Kapfidze, LendingTree’s chief economist. “Even those who have kept their jobs and added to savings, via stimulus and spending less due to staying home, are likely worried about the stability of their financial position.”