Sales has been robust over the last couple of months, and the national pending-home-sales index above shows how we’re just making up for lost time. We don’t have a local PHSI, so let’s look at how the NSDCC closed sales for 2020 have compared to last couple of years:
NSDCC Detached-Home Sales, Jan-Aug:
After six months of Covid-19, we’re only 87 sales behind last year!
I bring it up because the doomer-of-the-century chimed in, and I just wanted to present more-current evidence before reading his take on the 2020 market:
He did mention that we got off to a hot start this year, and it can be attributed to the lower mortgage rates. With the Fed saying they are going to ignore inflation, let’s include ultra-low mortgage rates high on our list of why the 2021 Spring Selling Season will likely be craziest market of all-time!
We know that covid, and it’s impact on schooling in particular, is causing some people to want more space around them. Bigger houses, with bigger yards, are becoming more desirable…..and buyers are scrambling to get situated and comfortable before school starts – or at least not get too far into the school year.
The Poway area offers such relief at a fairly affordable price.
My buyers and I finalized this list of homes on Monday, and picked yesterday as our tour date. By Wednesday night, this is how the list looked:
17307 St Andrews Dr., Poway. $1,399,000 Active listing
14260 Hacienda Ln., Poway. $1,150,000 Active listing
16105 Lakeview Rd. Poway. $1,350,000 Active listing
12612 Stoutwood St., Poway. $1,070,000 Pending
13615 Sunset View Rd., Poway. $1,100,000 Pending
11828 Clearwood Ct., San Diego. $1,290,000 Pending
12429 Damasco St., San Diego. $920,000 Pending
14473 Trailwind, Poway $1,465,000 Pending
14220 Primrose Ct., Poway $1,249,000 Pending
3428 Tony Dr., San Diego $1,329,000 Pending
12020 Blue Diamond Ct., San Diego $1,300,000 Pending
9972 Falcon Bluff, San Diego $1,389,000 Pending
14048 Old Station, Poway $999,000 Pending
12488 Caleta Way, San Diego $1,098,000 Pending
13427 Calle Colina, Poway $1,250,000 Active listing
Out of the 15 listings, eleven of them already went pending this week!
If the Big Three reasons why people move (death,divorce, & job transfers) start to increase, we’ll have more inventory next year – how much is too much?
If absence makes the heart grow fonder, what happens when you’re stuck at home all day with your spouse? Some California attorneys say they are seeing a rise in divorce cases during the COVID-19 pandemic.
Joe Wolch, a family-law attorney based in Walnut Creek, says not only are more people calling to ask about divorce, many are ready to file – immediately.
“I would say the phone is ringing much more,” said Wolch. “Where they used to be able to get away from each other, during the days or in the evenings with their extracurriculars, but now they haven’t had the opportunity. So now people are more acutely aware that they just can’t stay together.”
In some cases, however, those attempts to divorce are complicated in additional ways by the pandemic.
OneSouthern California attorneynoted that more courts are closed or operating under reduced hours and with fewer staff, making it more difficult to resolve legal issues such as child custody. And if one parent fears the other estranged spouse has been exposed to COVID-19, they may take action without waiting for the court’s approval for a change in custody arrangements.
Some sites report online searches for divorce-related information have increased more than 30% since March.
Some California attorneys have also seen an increase in cases involving domestic violence.
“It’s much more serious when you’re dealing with potential child custody or visitation issues or safety issues, whether it’s the spouse or the spouse and the children,” explained Elaine Le, a family attorney with San Jose’s Hoover Krepelka LLP.
Another factor during this deepening coronavirus pandemic: People are becoming even more aware that life is short.
“Life might be too short to be too unhappy for too long,” said Wolch. “So they’re looking for options to make their life better, maybe their children’s lives better and overall move forward.”
That said, some unhappy couples may decide to stick together amid all the economic uncertainty, because getting a divorce doesn’t come cheap.
Divorce attorney fees can run from $400 to $600 per hour.
Next year will be here before you know it – could it get any crazier? Oh yeah!
In the video below, you’ll hear my list of buyers and sellers who we can expect to be extremely active next year. Then add in the Big Three (death, divorce, and job transfer), and we could have the most insane real estate market in the history of the world!
The idea of people fleeing to the suburbs isn’t what we thought – an excerpt:
For the week ending on May 10 — which was around the height of the pandemic in New York City — the percentage of search traffic from the New York metro area to out of market areas rose 5.4 percentage points year-over-year, which appears to reflect a minor uptick in people wanting to get out of the city.
But if you take a closer look at the breakdown of searches by population density, the share of search traffic from the New York metro area to suburban and rural areas dropped, while the share of search traffic looking at other urban areas rose. Taken together, this shows that while there was a minor uptick in New Yorkers looking for homes outside of the New York area, it’s slightly tilted toward other urban areas than it has been in the past. The search data, which is already a weak indicator, does not actually reflect an increase in New Yorkers’ interest in moving to suburban or rural areas.
The same is generally true for a number of other cities as well, including Detroit, St. Louis, San Jose, Pittsburgh, Cleveland, Miami, Las Vegas, Boston, Baltimore, Los Angeles, and Philadelphia.
There were other cities that saw a drop in traffic to out-of-market homes, but the share of traffic to other urban areas still rose — Seattle, Minneapolis, Chicago, Phoenix, Washington, D.C., Dallas, Charlotte, Atlanta, Tampa, Sacramento, San Diego, San Antonio, Columbus.
Of the cities that did see a drop in traffic to homes in urban areas, the drop was negligible. The city that saw the biggest drop was Indianapolis, where traffic fell by a mighty 1 percent.
“We just don’t have any basis to claim a boom in the suburbs,” says Jeff Tucker, an economist with Zillow. “There are people who really believe the urban exodus hypothesis. If there’s an evidence for it in the data, it’s very weak.”
This doesn’t mean there won’t be a flight from cities at some point in the future. As the virus continues to rage on across the country, people who have lost their jobs may decide to leave their cities for more affordable areas. Widespread adoption of work-from-home polices may also give people who didn’t want to live in cities to begin with, the option to leave. People in cities like New York and Detroit, which were hit hard by the virus, may decide they’ve had enough.
Did sheltering in place have any effect on home improvement rates? Our data says yes.
Over half of American homeowners (55%) said the pandemic and associated disruptions gave them time to improve their homes, while 59% admitted that spending more time inside due to lockdown inspired them to renovate their place of residence.
What’s the stated reason? “Finally having the time” was the top motivator, with 25% of homeowners saying that’s what drove them to go ahead with their improvement and remodeling projects.
Impressively enough, it ranked above the more typical drivers of home improvement, such as adding value to a home (21%) or making a home feel more comfortable and cozy. (21%).
Let’s look at the bigger picture and compare the first half of 2020 to previous years:
NSDCC 1H Listings & Sales
Median List Price
Median Sales Price
There have been a fairly-consistent 2,700 NSDCC houses listed for sale in the first half of each of the last three years. In 2020, the count dropped to 2,290, which is 435 fewer listings than last year, or about a month’s worth. We didn’t miss them much either, with sales only being down 17%. Pricing of homes on the lower end has known no throttle.
If we have a typical second half, the 2020 annual sales could end up only being down 5% to 8% for the year – and median pricing up 5% to 10% YoY. I’m not sure anyone predicted that when the ‘rona broke out!