Payment Adjusted for Rate & Inflation


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
Median SP
Mortgage Rate
Monthly Pmt

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?

Fewer Moving To Urban Areas

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

My Top Ten Reasons For Frenzy 2021

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.

Donations Needed

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:

  • Prayers
  • 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

NSDCC New Sales Records

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
Median DOM
# 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.

Why Are You Moving?


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.”


Red Hot December

I inputted my new listing around 10:00am this morning…..and I was showing it by 1:15.

We had FIVE showings today, and have SEVEN scheduled for tomorrow. And it’s December!


Plus I showed properties to three other buyers today!

P. S. My hand-written calendar is easier when driving.


California Home Showings

This looks like a dramatic drop-off in showings but we are still 160% above where they were last year, and way above where they were in February.  If there were just more homes for sale!

We got off to a hot start in 2020, and you can see how showings in January of this year picked up immediately compared to November, 2019. Let’s compare the December showings over the next few weeks to give us a feel for how fast the market will get started next year!



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