Optimistically, what are positive things that could happen this year?
The Fed pauses in March. They meet twice in the first quarter of 2023 – February 1 and March 16th. I’ll live through another 1/2% hike a month from now, but then a surprising Fed pause in March would give the spring market a welcome boost – and hopefully keep mortgage rates in the 5s.
There were close to 2,000 NSDCC homes sold in 2022. We’ll probably have between 1,200 and 1,600 sales this year? A Fed boost would give the spring market a few months to transact in a more-predictable environment, and probably be the difference between 1,200 and 1,600 NSDCC sales.
Have you heard anything new about the site of the old Power Plant in Carlsbad? Or the Ponto site? I didn’t see anything in the city-council agendas from the last couple of months, but they should be in the works. The power plant site is not big enough to be a major residential site, but it would get interesting if try to turn it into a higher-end hotel (like they did at the Alila Marea and at the pier in Oceanside). Nothing on the 14-acre Ponto site either – with a current plan for a luxury resort hotel with 274 rooms and 48 timeshares that’s been for sale at $38,000,000 but they put their listing on hold last week.
If they want to do something to increase the demand for homes, they could make it easier to get a mortgage. Self-employed people still don’t have reasonable access to mortgages at market rates. If a big lender was willing to calculate the borrower’s income from bank statements instead of tax returns, more buyers would qualify. But the loans need to be at a decent rate – and a seven or 10-yr ARM would be fine (it doesn’t have to be a 30-year fixed rate).
Speaking of ways to improve the supply and demand for homes, converting the MCAS Miramar to civilian use should be considered. When the cost of housing is so ridiculous, it makes sense to develop 23,116 acres in the middle of town into a booming, multi-use development that features housing for all. We could be the national example on how to handle the future needs of the people.
The lawsuits against realtors will get addressed towards the end of 2023 and potentially dismantle buyer-agents. It would be awesome if a new auction-based brokerage would hit the scene about the same time!
Other positives about 2023 include it not being an election year, and we’ll be further beyond the pandemic. There should be more commercial and industrial-zoned properties converting to residential uses. The ADUs and aging-in-place will be priorities for many. Every month/year that goes by will push people closer to making their next move – if you know it’s coming, then let’s give it a go in 2023!
I think everyone who buys or sells a home in 2023 will consider it a major accomplishment!
This is my 748th blog post of the year! (641 published and 107 drafts)
Let’s note how drastic things have changed since rates went up:
NSDCC Detached-Home Sales, December
2012: 297
2013: 223
2014: 255
2015: 259
2016: 241
2017: 225
2018: 196
2019: 229
2020: 290
2021: 183
2022: 95
The best forecasting tool is the number of sales.
Look at how crazy-high the number of sales were in 2012 and 2020. In both cases, the demand had been building up and it really cut loose late in the fourth quarter – in spite of the holidays – to close a third more sales than normal (the average count of the other nine years is 212 sales). Then the two biggest frenzies in history broke out in the following spring.
The number of December sales can help us predict what is coming – and it doesn’t look good for 2023!
We will get our 100 sales once everyone reports their closings, but it’s HALF of the average count.
This year was terrible for many, if not most, agents, and about the best we can say is that we survived. It’s going to get worse in 2023 because there aren’t enough sales to go around. The conditions next year will force many agents into early retirement – why keep paying your dues if there’s not much hope?
You can’t ignore the current predicament and keep doing the same things you’ve done the last 5-10 years. You gotta do better. The industry has to do better.
Here are my 2023 requests of agents:
Publish relevant data that’s easy for consumers to digest. Come up with something juicy that makes a difference, instead of the usual agent blather we see on social media. Printing the number of sales is good, but also add your opinion on what it means – the audience wants hear your interpretation of the data and they will spend a minute or two to get it.
Make it easy to show your listings. If you employ the same hurdles from the frenzy days – like insisting that I send my buyers’ financials just to schedule a showing – then you should pay us more commission to compensate for the hassle.
Will you provide buyers and agents with a walk-through video of your listings please? Let’s preview the homes in advance by video, which will save your time if it isn’t a fit. Adding helpful tips or witty remarks are great, but they are not required. Put the video link in the listing remarks – which is still allowed by the MLS. I don’t see many Matterport 3D tours or any video tours, do you? Let’s upgrade!
We will be having HALF the normal number of sales in the early months of 2023. If we’re not doing it better, then these conditions will persist, and could go on for years.
Every day, we are getting closer to the end. Let’s give it everything we got!
This was my favorite song in the Wednesday Rock Blogging category this year, so when I had a chance to go she her at the legendary Whisky-A-Go-Go on the Sunset Strip, I jumped at it – and took Natalie with me! She said she’s not used to seeing her bands up close at venues like this while being packed in like sardines on the dance floor with a bunch of old guys:
This year was one of the best ever for us. We had our highest sale ever ($7,750,000), our highest average sales price ever ($1,870,835) and more people on my next-year’s client list than ever before – thank you!
The local market between La Jolla-to-Carlsbad fared pretty well too, all considered.
I suggested that there wouldn’t be any sales under $2,000,000 in the Davidson Starboard tract, and there wasn’t (the only one to close escrow since our $2,250,000 sale was across the street at $2,150,000).
I hoped we would have at least 100 NSDCC sales per month, and it looks like that will happen (we have 93 closed this month, as of today). Relatively-speaking, prices have held up too – but sales have plunged, which means sellers aren’t budging much, at least not yet.
Annual Detached-Home Sales Between La Jolla and Carlsbad
Year
# of Sales
Median LP
Median SP
Median $/sf
Median DOM
2017
3,084
$1,250,000
$1,225,000
$441/sf
35
2018
2,799
$1,350,000
$1,325,000
$475/sf
24
2019
2,834
$1,360,000
$1,327,750
$482/sf
27
2020
3,190
$1,499,000
$1,483,750
$517/sf
21
2021
3,184
$1,872,412
$1,900,000
$665/sf
14
2022
1,929
$2,289,000
$2,300,000
$828/sf
15
I will finalize the 2022 numbers next year, but you get the idea – we’re not going to hit 2,000 sales this year, after having almost 3,200 sales in each of the last two years.
Long-time reader GeneK left this comment last night:
The youngest boomers won’t hit retirement until 2030, and most of them will probably live another 20 years or so after that. How long will it be before that estate-sale marketplace takes hold, and will there be a retirement-sale marketplace for a while before that happens?
The housing stock between La Jolla and Carlsbad are generally older homes, with the exception being Carmel Valley. As a result, most of them are owned by the baby boomers, and they don’t want to move! Because they are comfortable with aging-in-place, the inventory of homes for sale will likely be very limited for the next 5-10 years – no matter what the prices are.
The median $/sf went up 25% this year, after going +29% last year!
If there is one word to sum up what to expect in 2023, it’s sluggish.
Here’s why:
Dull (not sharp) pricing.
Patient buyers.
Higher rates.
Slow reactions.
Those sellers (and their agents) who are bold enough to list their home for sale early in the year will be relying on recent comparable sales to guide them on price. But where are the 2022 comps? They are all going to be higher than what the buyers are thinking. Sellers like to use the highest sales to determine their list price, so they will consider the frenzied-up sales from early 2022 as part of the dream too.
Their only hope is that no other new listings pop up nearby to spoil it for them.
Buyers will be determined to wait this out.
Mortgage rates will be climbing higher, and buyers will want to be compensated with lower prices – and it won’t matter much what the price is, they will just want it lower. But sellers aren’t going to believe it until they test out their aspirational price first.
As a result, we’re going to see more like this:
Listing agents won’t be rigorous about their initial list price, or about reducing their price after a few weeks of failure on the open market. They will just wait it out, and then 70 days later they will get lowballed….and just take it.
We know that the estate sales will be a predominant part of the inventory from now on, and they will be particularly prone to being hit like this. But because the kids will be tired of waiting for their windfall, they will succumb and blame Jay Powell.
But hopefully it will mean that the needed price discovery will be completed in 2023!
This seller did everything imaginable to upgrade this house in NE Carlsbad, and then got into trouble – BofA filed a Notice of Default in April on his $1.9 million mortgage. But don’t feel bad for him having to drop from his lofty $4.5 million initial list price to eventually sell for $3,175,000 – it is still the highest sales price ever in this zip code.
The local index peaked in May, so today’s local Case-Shiller reading for October is the fourth in a row that reflects the much-higher mortgage rates:
San Diego Non-Seasonally-Adjusted CSI changes
Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
Jan ’21
301.72
+1.4%
+14.3%
Feb
310.62
+2.9%
+17.1%
Mar
320.81
+3.3%
+19.1%
Apr
331.47
+3.3%
+21.6%
May
341.05
+2.9%
+24.7%
Jun
349.78
+2.6%
+27.2%
Jul
355.33
+1.6%
+27.8%
Aug
357.11
+0.5%
+26.2%
Sep
359.88
+0.8%
+24.9%
Oct
363.80
+1.1%
+24.2%
Nov
367.62
+1.1%
+24.3%
Dec
374.48
+1.8%
+25.9%
Jan ’22
383.92
+2.5%
+27.2%
Feb
401.45
+4.6%
+29.2%
Mar
416.64
+3.8%
+29.9%
Apr
426.08
+2.3%
+28.5%
May
428.32
+0.5%
+25.6%
Jun
425.26
-0.7%
+21.6%
Jul
414.03
-2.6%
+16.5%
Aug
402.62
-2.8%
+12.7%
Sep
394.18
-2.1%
+9.5%
Oct
391.34
-0.7%
+7.6%
It looks like we may have seen the worst of it?
If so, and the monthly declines are tempered over the next couple of readings, it should mean that the index will be in the 380-390 range as we roll into the spring selling season – or about where it was a year ago.
It sure seems to be going better than most people thought it would!
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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
Trustindex verifies that the original source of the review is Google.
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!
---
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.
Bjorn Isachsen
July 10, 2024
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The Good
The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market.
The Great
Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them.
The Outstanding
We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time.
The Truly Exceptional
Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs.
The Recommendation
For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's bubbleinfo.com blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...
Chris Shea
June 21, 2024
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We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready.
Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free.
Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.
