The seven showings of our new listing yesterday went well. People generally show up on time and understand the predicament that the demand is overwhelming the supply. We’ve received two offers, and we are way over list price already.
There tends to be some standing around, so I like to engage with agents about how my slow-motion auction process works. They appreciate the transparency, and tells stories about how other agents are handling their showings. I heard a story about one listing agent who demands that agents submit the buyer’s preapproval letter and proof of funds JUST TO BE PUT ON A WAITING LIST TO SHOW, and another where no human interaction was allowed (which is common).
In my case, you deal with me, and I make myself available by phone, text, or email. I want to give every buyer ample opportunity to buy the home – isn’t that what you want in your listing agent?
The house across the street and a couple of doors down from my pending listing in La Costa Oaks went on the market today. I emailed the listing agent to tell her that we had 25 showings during the first weekend, and our sales price – which is higher than her list price. She appreciated the tip.
She got back to me later – she has TEN showings today!
Christmas is next week. I hope we get the day off!
Remember when it seemed to make sense that because home prices were escalating, people would be buying smaller homes? Boy, did Covid-19 change that – now the larger homes are driving the market, which suggests that the move-up market has come alive:
(To keep a healthy sample size, let’s combine October and November)
NSDCC Sales and Pricing Over/Under 3,000sf
Oct + Nov
# of Sales Under 3,000sf
# of Sales Over 3,000sf
Rapidly-increasing prices aren’t slowing down sales….and may be speeding them up!
Could the increase in larger-home sales be due to more inventory?
No – actually we have had fewer Over-3,000sf homes listed this year than in 2019:
NSDCC Total Listings between Jan-Nov
# of Listings Under 3,000sf
# of Listings Over 3,000sf
The larger-home sales were already benefiting from multi-gen buyers needing a place for Mom. Add to that demand the move-uppers who may not need a place for Mom yet, but if they sense it might be coming in the near future, then might as well buy bigger now – and maybe get granny to throw in some of her dough!
San Diego didn’t make the NAR list of vacation-home areas (counties where 20% of the housing stock is for seasonal use), but our market should be enjoying some additional second-home purchases:
Vacation home sales are outperforming total existing-home sales. Sales of homes intended for vacation use rose to 109,100 in the past three months of July-September, a 44% gain from the level of 75,600 sales during the same period last year, according to NAR estimates based on information gathered from the monthly REATORS® Confidence Index Survey and NAR’s existing-home sales estimates. In comparison, total existing-home sales during July-September rose 13% year-over-year (1.72 million in July-Sept 2020 vs. 1.52 million in July-Sept 2019).
The pandemic and low mortgage rates have increased the desirability and affordability of owning a vacation home. Buyers may be desiring a vacation home as a weekend getaway as urban-based leisure activities are still constrained by social distancing. The ability to work from home also means buyers who can work from home can spend more time at and enjoy their vacation home. Historically low mortgage rates have also made a home purchase more affordable, while rising prices in past years have yielded larger home equity gains that can be tapped (through say a home equity loan) to use for a down payment.
We noted how there aren’t many of the newer one-story houses for sale.
When they do hit the open market, they tend to blow out – three of the last four sales of this 2,100sf plan in Santa Fe Trails in Carlsbad have sold over list price. The previous high sale of this model was $1,100,000 in 2018, so they listed this one on the range $1,125,000 – $1,150,000, figuring they could get a little more:
I have to hand it to Brett and team in their preparation of this 1975-built home in Solana Beach. The flooring was removed downstairs, and they added a heavy epoxy paint to the exposed-concrete, which gave it a trendy-hip look to go with the colorful formica in the kitchen:
The list price is $1,850,000, and they already have four offers!
Richard was the listing agent in 2014 when Tamara’s clients paid $620,000 for this 1,296sf Encinitas house built in 1974. At the time, it was tenant-occupied and in its previous condition – I dubbed it a ‘light fixer’:
We talk a lot about homeowners being rate-locked into their homes as rates have increased. It's true that 93% of outstanding mortgages were locked in below 6% as of Q2 2022. But 42% of owned homes have no mortgage associated with them, making them immune from the lock-in effect.