After staying around 400 since the middle of September, the number of active listings finally plunged by 6% as the holiday season finally set in. Yet, the number of pendings rose by 9%!
There were also more new pendings than new listings this past week.
The list prices are probably as low as they will be for the next six months. It would take a very sluggish spring selling season for pricing to collapse in the second half of 2023. Until then, sellers will be confident that they will beat the odds and sell for at least as much as they can get today.
I said on the Frenzy Cruise that I’d also recognize the NSDCC sales that closed well under their list price. It’s good for potential sellers to see how buyers will lowball homes that have been on the market for a while – and encouraging for buyers to know that they might be able to get a deal if they play the game wisely.
These are sales from November, with percentages off their original list price:
-17%
-14%
-23%
-19%
-15%
-10%
-23%
-10%
-16%
-32%
-16%
-20%
-11%
-15%
-15%
-13%
-26%
-17%
-23%
-12%
-20%
-14%
-13%
-29%
-19%
-16%
-22%
-12%
-14%
-14%
-18%
-28%
There have been 94 NSDCC closings in November (so far), and 34% have been discounted by a double-digit percentage off the original list price – which isn’t too bad, given the negativity everywhere. It happens at all price points too.
Two conclusions from the clusters in graph below:
Once a home has been on the market for 30-40 days, sellers are ready to deal.
Sellers who go beyond 100 days on the market are really taking a chance.
There were 13 of the 32 sales who ‘refreshed’ their listing, or had it on the market this year with a different agent – those DOM are not reflected here. There were quite a few at the -8% and -9% too.
Five of the 32 were round-tripped.
Because it is unethical to deliberately list a home for sale at an unrealistic price, it means that in a third of the cases, the listing agents just flat-out got the price wrong by a double-digit percentage. Can you imagine if doctors, lawyers, stockbrokers, plumbers, or burger-flippers were wrong a third of the time?
Our friends at JB have been on the forefront of market tracking for years now. They have staff that travels around the country to gather data from builders in particular, and have built a tremendous network.
I don’t mind being labeled as ‘slowing’ because…..well, I guess it beats falling!
Their definition of Slowing:
Markets in the Slowing phase face alarming affordability levels, decelerating (or even declining) home price appreciation, and rapidly slowing sales—making capital investments less attractive. Several of these slowing markets were among the first to recover from the initial COVID panic in April 2020.
In-migration and job growth, fueled by the proliferation of work-from-home policies, set these markets apart as higher wage workers relocated due to the relative affordability—most notably Dallas, Jacksonville, and Raleigh-Durham.
Current employment is well above prior peak levels in all of these markets. While strong job growth from high-wage sectors has buoyed these markets, it has also been the primary driver of their now strained affordability, with a significant number of locals now completely priced out of ownership.
YOY home price growth is decelerating rapidly, and construction volumes are pulling back from very high levels.
Their business focus is tilted towards builders and new homes, but their analyses about the general market conditions are applicable to the resale market too.
Each area will have several variables that makes it unique, but we are a society that wants to label everything with one word. I have one word for you – auction. If an auction company took over real estate, we wouldn’t need opinions, analyses, or realtors!
Thank you for the tremendous support! You generously bought 65 pies and donated another $3,300 to the cause. It will allow Mama’s Kitchen to provide 2,017 medically-tailored meals to San Diegans who are vulnerable to malnutrition due to critical illness.
Yesterday I was delivering pies throughout North County, and visiting with our great supporters – who were mostly past clients. Predictably, the conversation turns to real estate, and observations about what’s going on in the market, now and in the future.
In case the subject comes up at your Thanksgiving, here are things we discussed:
Sales are down, but they aren’t zero. There are roughly 400 houses for sale between La Jolla and Carlsbad, and the vast majority have been languishing on the market. But at least 100 of them find a way to close escrow every month – and they tend to be the spectacular homes that are priced attractively.
Sales are being hampered by the light inventory. The number of listings are 40% lower than in 2019, and next year I expect there will bethe same or fewer homes for sale as sellers decide to wait until the “market gets better”.
Mortgage rates in the 5s are tolerable, and above that is problematic. Higher rates don’t only make homes less affordable – they also cause buyers to have a psychological expectation that sellers should come off their price. The higher rates go, the more standoff there will be between buyers and sellers.
To get deals, the buyers have to cause them – and they are happening. We saw how two sales near my latest listing knocked off more than 10%, and here’s another one from yesterday:
I am re-examining one of my favorite seller slogans from many years ago; I’m Not Giving It Away. Back when potential sellers had little, if any, equity, they would fight like crazy just to make sure they came out of escrow with at least enough for a steak dinner. But everyone has gobs of equity now….and those who need to move bad enough are giving up decent chunks of it. It means we could have a much faster decline in pricing than ever before.
I am still convinced that by March/April, the spring selling season will kick in and homes will be selling briskly for all the money. It’s likely that we’ll get off to a slow start as both sellers and buyers wait for someone else to go first, but by the end of March or April we will see bidding wars again.
Realtors are woefully ill-equipped to handle these conditions. They have no strategies for a soft market and are very reluctant to price aggressively or reduce a list price properly. Here is a discussion of typical agent comments.
The blog is picking up momentum, which hopefully means more people are looking to get better-educated about the market conditions, which is encouraging:
Thank you for being here! I appreciate all of you and Happy Thanksgiving!
Try out Grandma Klinge’s pumpkin bread (mastered by Natalie) from the Compass cookbook:
The Spring Selling Season could get a real boost if mortgage rates stay in the 5s.
The Fed has been telegraphing their intentions for months now, and at this point, there can’t be anyone who thinks the Fed won’t keep raising their Fed Funds rate – at least for their next two meetings. Mortgage lenders have to be pricing in the anticipated future increases, yes?
After some tepid inflation news last week, mortgage rates came down a 1/2%, and they have stayed there, which makes me think that there was already too much buffer priced in – and there has to be some extra left knowing that the Fed has more work to do.
But just in case, go out and buy a house today so you can get a 5-something rate!
I’ve been on a fortunate lucky streak this year, and it’s not going to last forever so if you don’t mind, I’m going to enjoy it while lasts. More than anything, I want to give hope to sellers and buyers that you can make smart and friendly transactions these days.
The reason for breaking down the active and pending listings by zip code is to give the readers a closer look at their neighborhood stats. A healthy market is when there are two actives to every pending.
There are a couple areas (in red) where the number of pendings have dropped significantly. But in six of the more-expensive areas, there are the same number of pendings now as there were last month:
All we have to do is muddle through the next three months!
In 2020, we had 400+ pendings from June 22nd to November 30th – with a peak of 491 pendings on September 7th.
There have been 80 NSDCC closings in November, which should mean we should get to at least 100 sales for the month. But with only 108 pendings today, the monthly sales in December and January sales will probably be under 100. Even though there are 393 active listings, sellers haven’t been too interested in adjusting their pricing strategies, and most will just wait it out until some unknown date in the future.
Another lady was walking by on Wednesday when we were doing the photos of the new listing. She confirmed that we were selling the house, and replied, “It’s a TERRIBLE time to sell”.
She came back yesterday, and when she heard that I already had three offers, she said, “Well I guess it’s good to get out, because I heard that PRICES ARE GOING TO GO DOWN FOR FIVE YEARS!”
The future is somewhat unpredictable, so let’s just look at how sellers have been operating in 2022.
How do the sellers feel about getting more aggressive about their list prices? If prices were going to decline for the next five years, there should be some evidence already.
Here are the weekly averages of LP/sf by price range in 2022:
Generally speaking, at least 3/4s of the sellers would rather stick to their price and not sell.
I don’t expect that trend to change.
If it were to change, it would be in the off-season when the stragglers who didn’t sell in the spring/summer are motivated enough to accept a lowball deal. But you won’t see it much in the list prices, it will only happen for those who are willing to make low offers.
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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!
---
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.
-17%
-14%
-23%
-19%
-15%
-10%
-23%
-10%
-16%
-32%
-16%
-20%
-11%
-15%
-15%
-13%
-26%
-17%
-23%
-12%
-20%
-14%
-13%
-29%
-19%
-16%
-22%
-12%
-14%
-14%
-18%
-28%
