We have an unusual obsession with home pricing – I say unusual because nobody cares that our measuring devices are deeply flawed and regularly give the wrong impression. With the stakes being so high, you’d think homebuyers would investigate thoroughly – but everyone just wants to grab and go!
You can see in the graph above how the smaller sample sizes cause more volatility – Encinitas only had 19 houses sold in December, and ten closings in January – so the 10% to 15% bounces up and down aren’t good representations of the pricing trend.
This is a better look at the trend – the average and median $$/sf for houses sold between La Jolla and Carlsbad, and this includes the 70 sales so far this month:
The upward trend should continue as more of the premium products come to market this spring.
I predicted that there wouldn’t be a sale under $2,000,000 in the Davidson Starboard tract in La Costa Oaks after we closed the Plan 2 in October. The first new listing there since is coming soon, priced at $2,899,000 and they should get all the money:
I know they paid $1,999,919 in 2019, but there have been others that have closed for a million dollars over their 2019 purchase price. The Plan 3 layout probably isn’t as popular as the Plan 2, and the backyard is filled with a pool. But this street is a culdesac and it has the best south and west views which only come up occasionally for sale. It’s been so long since we’ve had an offering like this that I wouldn’t be surprised if she has 100+ people look at it next week – in spite of all the doom!
After a tremendous performance that could be ranked as good as any show ever, she ended the gig with this ballad to her daughter just nine days after September, 11, 2001. We were there:
This has to be the best ending to a concert video ever. I love how they show the escorting of the talent after the show, an art form that is all about shielding the fans away from any direct contact and getting out alive.
The market could deteriorate into a cash-only environment, where the buyers and sellers who can avoid mortgages altogether are the only players left. If mortgage rates get into the 7s and 8s, the temptation for financed buyers and sellers to wait it out will be overwhelming.
Sellers who are downsizing/leaving town are home buyers who won’t care much about mortgage rates because the only way it makes sense for them to move is to pay cash for their next home. Especially those who are older.
There are plenty in this category, thankfully!
From FATCO:
Of those who owned their home free and clear, nearly 78 percent were owned by homeowners aged 55 or older. Not surprisingly, older homeowners are more likely to own their homes free and clear. As the Baby Boomer generation, which is larger than any generation before it, has aged, the share of homes owned free and clear has increased. This gives some hope that while many existing homeowners remain rate locked-in, there is a large cohort of older homeowners who are not. However, older households are typically less likely to move than younger ones, which is especially true as seniors today increasingly age in place. So, while some portion of the free-and-clear inventory will come to market in the next decade, it will likely trickle in slowly.
Free-and-Clear Homeowners May Hold the Key
As demand for homes starts to inch up as we approach spring home-buying season, a key question is, will there be more inventory for those potential home buyers to buy? Existing-home inventory makes up the bulk of available home inventory, and many existing homeowners refinanced into sub-3 percent mortgage rates over the course of the pandemic. But there’s a large group of homeowners who are not deterred by higher mortgage rates—those without a mortgage on their existing home or those with a small remaining balance. These homeowners may hold the key to unlocking more supply and, in turn, more home sales.
Local sales recently have been purchased all-cash about a third of the time. As sales drop further, the percentage of all-cash sales should end up at half or more of the total sales – and help to provide a floor.
Remember when the inventory tanked in 2020 when everyone was afraid of catching the bug?
Once the pandemic was over, we’d get back to the regular flow of homes for sale, wouldn’t we?
But the intensity seemed to increase as time went on, finally spinning out of control when mortgage rates went up. The resulting debris field is causing fewer people to want, or need, to sell.
For most, staying put seems like the best option, at least for now.
Buyers can probably endure another year on the lease. But potential sellers are getting closer and closer to being too old to move. If there isn’t a clear path to living for another 5-10 years (and hopefully longer) in your new town, you’re probably going to decide to live it out where you are.
The NSDCC YoY change in January was only -17%, so only half as bad as San Diego in general. But the first 15 days of February are -20% YoY, so the local inventory isn’t exactly getting better.
Last year the NSDCC sales were the lowest on record. We were already thinking that if the 2023 sales could get to 80% of that number, it would be great. But if mortgage rates spend the next ten months over 7%, what will be the annual sales count for this year? Maybe 50% – 60% of last year?
On November 9th, 2022, the average lender was quoting 30yr fixed rates well over 7%. On day later, that figure dropped to 6.625%. It was one of the best individual days for rates on record and it was driven by an economic report that showed an unexpectedly large drop in inflation.
Inflation and several other key sectors of the economy had pushed the Federal Reserve to hike rates at the fastest pace in decades. When it looked like the data might provide some relief, rates quickly moderated.
Strangely (or so it seemed at the time), the Fed was highly reluctant to read too much into several months of generally more palatable data. They said it was too soon to draw any conclusions other than “it’s a start.” With that, markets hesitated to push longer term rates any lower until the data made an even stronger case of that.
Unfortunately, the data since then has made a case for rates to turn around and head right back up toward previous highs. February has been particularly brutal in that regard and today was just the latest example. In fact, today’s reports aren’t typically regarded as top tier motivations for rate movement, but the market is so defensive to begin with that it doesn’t take much of a bump to create a snowball of momentum.
The average 30yr fixed quote for a top tier scenario was around 6.75% on Friday and was up to 6.87% by Tuesday afternoon. More than a few lenders are already back to 7%.
Are you thinking about selling your home and are trying to identify the strategies used by listing agents to get you top dollar with minimal inconvenience?
Are you finding that agents aren’t real specific about how they do their business, and just want you to trust that because they sold houses in the past that they can do it again?
Here is my specific strategy to achieve top-dollar sales with minimal inconvenience: 1) Do a minor tune-up of the home prior to hitting the open market, 2) Price attractively, 3) Make the home easy to see via the open-house extravaganza, 4) Allow all buyers to bid it up, 5) Treat buyers and agents with respect and deliver full transparency that encourages participation.
Here are the results of our last 25 listings:
None of these were priced artificially low to generate a bidding war. When a property is ‘attractively priced’, it means the presentation is worthy and it causes buyers to want to see it in person.
I have not come across any agent who sells homes like I do, and rarely do I ever meet an agent who has any strategy about handling multiple offers.
It happened again yesterday – the listing agent said on the phone that he had 3-5 offers, so I asked how he planned to handle it. Literally, he said, “I don’t know”, to which I replied, “How about doing a highest-and-best round?” He said, “Well we will probably counter the best 2-3 offers”.
Why he would eliminate any buyer is beyond me – I always counter every buyer because who knows how much higher they might go when asked.
In further discussion, he made it sound like none of the offers received were full price, and later I sent him a text that we were sending in a full price offer. Two hours later, he sends a text back that said, “It sounds like the seller wants to move forward with the first offer he got”.
This is the standard procedure in the realtor business – just grab one.
If your listing languishes on the market, it gets worse. Even the chief economist says so:
You want to sell early – during the first week on the market – when urgency is highest, and not languish for weeks or months just to take less later. In case everything goes right and multiple offers are received, you want an expert who creates a proper bidding war. In 2023, when buyers are more tempted to cancel and move on, you want your escrow handled in a way that it closes successfully, and on time.
Your eventual sales price can vary 5% to 20%, depending on your listing agent.
Let’s revisit yesterday’s graph and add the sales to compare the relative health of the market.
If higher mortgage rates were stopping home buyers, then sales would plummet, especially in relation to the number of listings. But if the number of listings plummets too, and we’re down to just the most serious buyers and sellers, we can still have an orderly market:
NSDCC Listings and Sales Between Jan 1 and Feb 15
Year
Number of Listings
Number of Sales
Listings/Sales
2019
625
239
2.6
2020
563
253
2.2
2021
449
290
1.5
2022
341
226
1.5
2023
280
148
1.9
The local market isn’t in shambles or falling apart.
The number of buyers AND sellers are much lower than they were previously, but they are acting in concert and fairly similar to the frenzy years. By the time the late-reporters log in, this year’s L/S will get down to 1.8 or 1.7 which is remarkably similar to the hottest frenzy years of all-time!
Our buyers had to beat out four other offers to get a great deal on this La Costa gem on a huge 13,696sf pie-shaped lot at the end of the cul-de-sac.
2112 Sereno Ct., Carlsbad
3 br/2.5 ba, 1,801sf
YB: 1978
No HOA
0.31-acre lot
LP = $1,299,000
SP = $1,290,000
This charming 3 bedroom, 2 1/2 bath home is in the La Costa neighborhood of Carlsbad. The gated property is located at the end of a beautiful cul-de-sac. The home features a lovely living room with vauted ceilings, a dining room overlooking the lush yard, an eat-in kitchen with granite countertops and hardwood floors throughout most of the home. The family room, located off the kitchen, is perfect for gatherings and has access to the patio and hot tub. The primary suite has 2 large closets and vaulted ceilings. The home sits on a large 13,696 square foot lot with plenty of room for a pool and RV/boat. Located close to shopping, restaurants, La Costa Resort, beaches and the I5. This private oasis is the perfect place to call home!
As you can tell in the graph above, there hasn’t been a flood of inventory (yet), and the number of pendings is rising steadily. All of the frenzy conditions are in place this year, just like they were since the pandemic broke out and inventory plunged.
The casual observers will struggle to notice, however.
With so few homes for sale, it won’t be as obvious how hot the market is…or could be!
NSDCC Number of Listings Between Jan 1 and Feb 15
Year
Number of Listings
Median List Price
2019
625
$1,650,000
2020
563
$1,790,000
2021
449
$1,898,000
2022
341
$2,575,000
2023
278
$2,699,000
When is the best time to sell? When no one else is!
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A+ thank you
Lisa Tuomi
June 11, 2025
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Many years ago, we purchased a home in Carlsbad, using a realtor that was recommended to us - Jim Klinge. Fast forward to 2025, we recently had the privilege of selling 2 homes in Carlsbad, CA and didn't hesitate to reach out to Jim and Donna Klinge of Klinge Realty Group to guide us through the sales. The transactions were very different, each with its own unique situation, opportunities and challenges. From start to finish, Donna and Jim helped navigate the pre-sale preparation, the listing, showing of the house, buyer negotiations, the final close and all of the paperwork and decisions in between. What stands out with both transactions is the professionalism of Jim and Donna (and their team), wonderful communication (timely, relevant, concise), their deep understanding of market dynamics (setting realistic expectations), their access to top-notch contractors, and last, their ability to guide us across the finish line successfully. We wouldn't hesitate to use Jim and Donna in the future and highly recommend them for anyone looking to buy or sell a property in North San Diego County.
Jerry Meyer
March 28, 2025
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We sold a home with Jim and Donna and from beginning to end they were consummate professionals. Their initial walk through the property resulted in a list of items to be repaired or updated. They supplied a list of vendors and job quotes to do the repairs and updates. We originally wanted to sell ‘as is’ and just get it over with. They gave us a selling price for ‘as is’ and options for doing a few updates/repairs to doing it all with the selling price for each option. We agreed to do all they suggested and we sold for the exact price they predicted. For every dollar spent we got back more than $2 back in the selling price. And they got that price in a rising interest rate environment! Donna and Jim are extremely detailed and guide you through ever aspect of the sale. There were no surprises thanks to their guidance. We couldn’t be more pleased with their representation.
Thank you Donna and Jim,
Jerry and Mary
Heather Quejada
March 27, 2025
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We have known Jim & Donna Klinge for over a dozen years, having met them in Carlsbad where our children went to the same school. As long time North County residents, it was a no- brainer for us to have the Klinges be our eyes and ears for San Diego real estate in general and North County in particular. As my military career caused our family to move all over the country and overseas to Asia, Europe and the Pacific, we trusted Jim and Donna to help keep our house in Carlsbad rented with reliable and respectful tenants for over 10 years.
Naturally, when the time came to sell our beloved Carlsbad home to pursue a rural lifestyle in retirement out of California, we could think of no better team to represent us than Jim and Donna. They immediately went to work to update our house built in 2004 to current-day standards and trends — in 2 short months they transformed it into a literal modern-day masterpiece. We trusted their judgement implicitly and followed 100% of their recommended changes. When our house finally came on the market, there was a blizzard of serious interest, we had multiple offers by the third day and it sold in just 5 days after a frenzied bidding war for 20% above our asking price! The investment we made in upgrades recommended by Jim and Donna yielded a 4-fold return, in the process setting a new high water mark for a house sold in our community.
In our view, there are no better real estate professionals in all of San Diego than Jim and Donna Klinge. Buying or selling, you must run and beg Jim and Donna Klinge to represent you! Our family will never forget Jim, Donna, and their whole team at Compass — we are forever grateful to them.
Lou F
March 27, 2025
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WeI had the pleasure of working with Klinge Realty Group to sell our home in Carmel Valley, and I cannot recommend them highly enough!
Jim and Donna demonstrated exceptional professionalism, offering expert guidance on market conditions and pricing strategy, which resulted in a quick and successful sale.
Communication was prompt and we were well-informed throughout the entire process.
For anyone looking for a dedicated and knowledgeable real estate team, look no further!
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William Sams
March 25, 2025
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Donna and Jim Klinge of Klinge Realty Group have our highest possible recommendation. From Donna and Jim’s first visit to our house through closing their advice and counsel was candid and honest in all dealings. They kept us fully informed throughout the process. The house sold less than three days after listing with a two-week closing. My wife and I have sold several houses during our lives. This was by far the best experience. Klinge Reality is a premium service realtor. You can’t make a better choice for someone to sell your home fast and for top dollar.
Emily Hernandez
December 29, 2024
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Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.
Jesus Adrian Sahagun
November 11, 2024
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This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.
SABIHA PASHA
July 23, 2024
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Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless.
So grateful that I had them on my side!
Anu Koberg
July 13, 2024
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We first found Jim through his blog at bubbleinfo.com, which really showcased his knowledge of SoCal real estate. Since then we've done three transactions with Jim and Donna, and they are an incredible full service agency, with Jim's deep market insight and Donna's deft contract and project management. We trust them implicitly in their analysis and strategy, which is based on years of experience. They're always available and on top of things, and we strongly recommend them to anyone.
