I’m back in Carmel Valley, 92130!
Historically, we have identified healthy markets by those that have a 2:1 ratio of actives to pending listings.
On October 20th, there were 57 actives, and 17 pendings in Carmel Valley.
Today, there are 42 actives, and 21 pendings in the 92130 – the 2:1 ratio!
In the graph above, the active inventory hasn’t been decreasing like I thought it would be, given that Thanksgiving is a week and a half away. You can’t say that nothing is selling, because there have been 50 closings between La Jolla and Carlsbad in November so far, which should keep the final monthly-sales count around the 100 as expected.
So I checked the Actives counts during pre-holiday season from the last few years, and in particular, the drop in active listings between the first week of October and mid-November:
The percentage of decline between the first week of October and mid-November:
2018: -3%
2019: -11%
2020: -12%
2021: -18%
2022: -0-
Comparing to last year, the hottest market in history with the lowest rates ever, will look wildly negative. In 2021, the market was still cooking in the fourth quarter, so the drop in actives had as much to do with everything selling, as it did with sellers packing it in for the holidays.
But compare today’s inventory to previous years. The pandemic count in 2020 was 547 actives in mid-November, and we’re 28% lower than that today!
The number of actives may not be dropping this year, and it means only one thing.
The sellers who are on the open market today have to be motivated to sell now, otherwise they would have given up and waited for the 2023 Spring Selling Season. Future sellers will probably be similarly motivated, because it should be obvious to everyone that selling for your aspirational price is much more difficult than it used to be – and the casual sellers will decide to wait for a ‘better market’.
This ibuyer was new in the game and was hoping to make a splash. Somebody there should have known in June of this year that the frenzy was wrapping up before investing $2.5 million cash into a 20-year old basic tract house on a busier street on the fringe of La Costa Valley.
My advice has been clear all along: Spruce ’em up nicely, stage it, price it attractively, and hire me to be your agent. If they would have just done some of those things, this would have turned out better.
Instead, they did no improvements, priced it for what they paid, put it on the MLS as a coming-soon listing before they actually owned it, and then did SEVEN price reductions and THREE listing refreshes before closing escrow today for $1,900,000.
About 1-2 months ago I asked the listing agent if they would take $2,000,000 cash, and he said that the offers were coming in higher than that so….no. And then they close for $1,900,000. This is where the jimjamalama really pays off for sellers!
Do I do rentals?
Sure, when they are higher-end luxury estates in Rancho Santa Fe owned by blog readers!
4124 Stonebridge Lane, Rancho Santa Fe
5 br/6.5 ba, 3,734sf
LP = $15,000 per month.
Stylish one-story contemporary home on 2.87 acres in gated Stonebridge that has recently-updated kitchen and baths, cantina doors, and hardwoods throughout! Pool/spa, solar, tankless water heater, large flat private backyard, and RV parking on site. The 4-car garage was converted to a br/office with full bath and are counted as the 5th bedroom and 6th full bathroom. Partially furnished – what you see in the photos is included. Water, pool maintenance and gardener provided by landlord.
https://www.compass.com/app/listing/4124-stonebridge-lane-encinitas-ca-92024/1176941239072495873
I appreciate those who have served – thank you!
Fun fact:
The Uniform Holiday Bill (Public Law 90-363 (82 Stat. 250)) was signed on June 28, 1968, and was intended to ensure three-day weekends for Federal employees by celebrating four national holidays on Mondays: Washington’s Birthday, Memorial Day, Veterans Day, and Columbus Day. It was thought that these extended weekends would encourage travel, recreational and cultural activities and stimulate greater industrial and commercial production. Many states did not agree with this decision and continued to celebrate the holidays on their original dates.
The first Veterans Day under the new law was observed with much confusion on October 25, 1971. It was quite apparent that the commemoration of this day was a matter of historic and patriotic significance to a great number of our citizens, and so on September 20th, 1975, President Gerald R. Ford signed Public Law 94-97 (89 Stat. 479), which returned the annual observance of Veterans Day to its original date of November 11, beginning in 1978. This action supported the desires of the overwhelming majority of state legislatures, all major veterans service organizations and the American people.
Veterans Day continues to be observed on November 11, regardless of what day of the week on which it falls. The restoration of the observance of Veterans Day to November 11 not only preserves the historical significance of the date, but helps focus attention on the important purpose of Veterans Day: A celebration to honor America’s veterans for their patriotism, love of country, and willingness to serve and sacrifice for the common good.
There probably aren’t many people today who expect to see any frenzy left in the marketplace. But here’s a view from the street, looking at actual sales closed over the last 30 days.
At 22 minutes, this turned into a full-length feature film (sorry), but consider it an audio track about the current market conditions, with video evidence to support it.
It sure seemed like there was plenty of extra buffer built into the recent mortgage rates. With the CPI report coming out more favorable than expected, the markets reacted – and boom, a half-point drop!
If buyers get the feeling that both rates and prices are coming their way, it should keep them looking. If there were just a few more quality homes to sell!
It looks like the hefty L.A. mansion tax is going to pass. Don’t be surprised if other cities and counties do the same and pit the rich people vs. everyone else under the guise of solving homelessness.
Measure ULA, the so-called “mansion tax,” is a ballot measure in California that would impose a one-time transfer tax on commercial and residential real estate sales valued at over $5 million.
The tax rate would be 4% for properties valued at $5 million to $10 million and would jump to 5.5% for properties valued at $10 million and above. Homeowners selling a $10 million property, for example, would face $550,000 in additional taxes on the sale.
Laura Raymond, organizer and spokesperson for the Yes on ULA campaign and director of the Alliance for Community Transit-Los Angeles (ACT-LA), a coalition of 42 organizations working toward transit and housing justice, said that the costs of the tax will be carried by the city’s wealthiest and the funds will benefit those most vulnerable.
“The cost-benefit tradeoff is a huge win, and one that will make our city not only more just but also a better place to live for everyone,” Ms. Raymond said.
If passed, the tax will go into effect in April 2023. Without a sunset clause, the tax would be permanent, though it would also be adjusted to keep pace with inflation. To avoid incurring these additional taxes, homeowners of multimillion-dollar estates looking to sell should act before next spring.
Samantha is feeling it here. Whoever she is singing this to should apologize!
Could we have a decent spring selling season next year?
Is there any precedent of our market settling down that quickly?
Home sales had been struggling for months, and then the Lehman Brothers collapse in September, 2008 helped to trigger the Great Recession, and millions of foreclosures and short sales.
Yet, just seven months later, home pricing hit the bottom in San Diego (see graph above).
We are enduring a once-in-a-lifetime spike in mortgage rates that are rightfully taking some time to digest. But people need to move, and by next spring, many will be buying and selling homes around here.
The Fed will have slowed down by then, the political landscape looks like it will drift more towards the center, and realtors are figuring it out that you have to have a spectacular-looking home with an attractive price to have a chance at selling. All will play a role in giving home buyers more confidence.
My listing from two weeks ago that generated 18 offers – 17 of them financed – and got bid up by 27% over the list price is proof that, in spite of the common perception that the market is dead, there is a strong demand right under the surface, just waiting for the right house, at the right price.
Those who were reading this blog in the 2008-2013 will remember how negative we were about the market, and how long it would take before it bottomed out – most figured it would be years and years. True, we aren’t going to get the government stimulus this time, but I don’t think we need it.
There will be a lot of skepticism in the market – and most people will wait until others go first before they think of entering the market themselves. We probably won’t ever see the sizzling frenzy conditions again, but a healthy semi-surge for a couple of months next spring seems like a good possibility. If it happens, it will be because sellers and agents got smart about selling in the post-frenzy era.
