There will always be an occasional low sale here and there.
What would cause home prices to really slide?
There would need to be a series of low sales in the same area to create downward momentum. The next seller would have to be convinced that lower prices are a fact, and without an obvious trend, they will be reluctant to believe it.
Here’s an example. Even though this lowball listing (in red) undermined the two comps over $2 million, the next seller wasn’t convinced, and they listed their home for $1,975,000. They have lowered it since, but you can bet they are digging in now – and the market is in their hands:
If they hold out and get close to their price, then the lowball sale will be dismissed as one-off, and other sellers in the future will ignore it….and hope the buyers do too.
These are the standoffs happening everywhere now. ALL sellers have plenty of equity and could go down in price if they really wanted – or needed – to make the sale.
But will they?
Generally speaking, the agents might go along for 30 days or so, but they aren’t used to sitting on unsold listings for months. They are going to nudge the sellers to lower their price, but those drops need to be in 5% increments to cause a meaningful reaction from the buyers.
Will some sellers surrender? Yes, but only when confronted with a lower offer. Currently we are in the Buyer-Vacation stage where few are in the game and making offers, and without solid proof, the sellers are more likely to wait, than dump.
The 2023 Selling Season will be the most anticipated market in the history of the world!
New update – another price reduction. Buyers are on vacation now, we’ll see about 2023:
For those who are willing to investigate the sales data in our local areas, here are the detached-home sales from the last 90 days. Poke around a little, and I doubt you’ll believe that we’re getting ‘creamed’.
The highlights: three RSF sales over $10 million in the last 90 days; nine sales above $5,000,000 in La Jolla (and 60 sales overall!), 81 sales in Encinitas – more than one every business day; and of the 182 sales in Carlsbad, 46 of them were $2,000,000 and higher.
Dr. Doom said in his podcast here that the California markets have had the most significant price declines, and the Bay Area, LA, and San Diego have ‘gotten creamed’.
He didn’t provide any data to back it up, so let’s look at what we have from the MLS which includes September data so we’re including the most relevant information.
San Diego County, All Property Types:
The San Diego County median sales price was $855,000 in June and July, and last month it was $792,500 – which was a 7% decline from the peak this summer. It was also 2% higher than in August. Is that creamed?
We’re coming off the greatest real estate frenzy of all-time, and now the Fed has caused mortgage rates to double in less than six months. All considered, I think we’re doing great, and better than expected.
These guys who just fling it around on their national platforms are doing undue harm to our market. Don’t listen to them until they get out of their mom’s basement and actually investigate what’s really happening!
Last month, the 92009 median sales price declined 14.8% YoY, and was -22% MONTH-OVER-MONTH.
Keyboard warriors everywhere will be jumping all over news like this.
What really happened?
The facts:
Last month, there were 52% fewer sales than in September, 2021.
The homes that sold last month were 13% smaller than in August.
The average and median $$-per-sf were higher month-over-month.
There were only 23 sales last month. Fewer sales means more volatility in the data, and the numbers will be bouncing all over the place. The average SP:LP was 97%, so nobody was giving it away, and when you look at sales like the last one on the list on Corte Luisa, know that it was an agent selling his own house for a $980,000 profit above what he paid in 2020.
You have to look deeper into the data to get the full picture of what’s really happening!
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Here are the August and September stats:
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Let’s revisit a previous blog post for an update, and more detail.
I featured a group of listings near La Costa Canyon HS a couple of weeks ago. The day the blog post ran, the most-expensive listing was pending, but it fell out of escrow that day. It’s back in escrow this week, and judging by how the listing agent ran my rather-sizable nose in it, they must have gotten pretty close to their list price. Tracey sold hers too, and together the two highest-priced listings are the ones that are pending, which demonstrate that buyers want quality and are willing to pay for it.
Pendings = purple:
Realtors who have no game will be reading juicy headlines on social media and be telling their sellers to dump on price, rather than dig for the truth and get to work.
GET GOOD HELP!
And just wait until I tell you the story about this one!
It was back when some homeowners had little equity that my favorite seller quote became a t-shirt legend.
But we still hear it today – when it comes to price, home sellers regularly say, “I’m Not Giving It Away!”.
Their equity positions used to be pennies, compared to today. Back in 2009, there were plenty who were just hoping to break even, and maybe come out with enough cash at closing to buy a steak dinner!
Now that every NSDCC homeseller has hundreds of thousands of dollars’ worth of equity, will they loosen up a bit? After all, the last 20% to 30% came pretty easy (in just a year or two) and if they had to give up some or all to make the deal, they certainly could
But will they?
Many potential sellers get so mad about paying the capital-gains tax that it prevents them from moving. Those who are on the open market in October of 2022 have already dealt with that fact mentally, so they must have a fairly good reason to sell.
Those who will dump on price must be really motivated. It probably also means their house isn’t that great because nobody wanted to buy it at retail, or for a little under. Can you live with one of those?
The stock market has been cooking this week, and bond yields coming down in hopes the Fed might slow down the pace of their rate increases. Or maybe even pause, and take a look around at what they created?
If that were to happen, then the 2023 Selling Season should be somewhat healthier as rates dip into the 5s just as more quality homes are coming to market. If current sellers start to get a sniff of that, then they will cancel their listing and wait until next year.
Which means those who are still actively trying to sell the rest of this year must be unusually motived – and your best candidates to test whether they will give it away! Stay in the hunt!
Bill’s take – there may be more deals available sooner than you think:
Hat tip to Mark for pointing out how much different our local inventory has performed, compared to other markets around the country. When you hear the doom and gloom from the national talking heads, this is what they are talking about:
Our inventory topped out in July, and has been declining since – where many other markets are exploding. In September, Las Vegas and Phoenix will probably set all-time highs for their number of homes for sale, where we are around half of our peak inventory numbers.
Super-custom estate with commanding ocean views from the best lot in the neighborhood! The previous owner had invested over $1,000,000 in upgrades, and these sellers added their own touches to create a magnificent property. Once through the private gates, it is immediately apparent that the attention to detail is paramount. Expert stone and woodwork set the stage for an elegant example of interior design, sure to impress the most discerning of palates. An open foyer shines in marble. Columned archways, hint at spacious parlors. Custom ironwork adorns the graceful, winding staircase – which frames a grand wine room. The entryway flows past the formal dining room and into an expansive family room – ideal for entertaining and complete with a functional bar and ocean view. A richly appointed, chef’s kitchen is at the ready, for functions large or small, and effortlessly incorporates the finest appliances, rich woods and exotic slab granite. Upstairs, a luxe master suite offers spa-like comfort- whether it’s relaxing in front of the fireplace or taking in your own private sunset, via the secluded balcony. Secondary rooms are beyond comfortable, and there is even a guest room, with en-suite bathroom, down stairs. Choose to step off the beaten path, once again, and take your place at the top of Aviara Point.
All of the home buyers who were willing to purchase a house ‘as-is’ with no repairs are sitting comfortably in their 3% golden handcuffs contemplating what else to fix.
None of today’s buyers – which is a whole new set of people – are going to tolerate that program.
It would be smart for home sellers to get in front of it. Completing a home inspection before going on the open market is an idea that’s been around for years, but the industry has been slow to adopt – we were always happy to take a chance!
But paying a few hundred dollars for an inspection report and then fixing the defects prior to going on the market provides significant benefits to the sellers:
It gives the buyers confidence that they aren’t buying a money pit when making their offer.
It demonstrates that the sellers have respect for the current marketplace.
It helps to avoid having to sell the home 2-3 times, each at a lower price.
Sellers and agents can do everything right and get into escrow with a buyer, only to have buyer’s remorse kill a deal over one stupid little thing. You know that the buyer’s family and friends have been telling them that they are making a big mistake, and that prices are going to drop – and at this point the buyers are looking for any reason to cancel.
Don’t give them one – even if you have to fix everything on the list!
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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.
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.
