by Jim the Realtor | Sep 13, 2022 | North County Coastal, Sales and Price Check |
The latest CPI number is out today, and the over-reaction will put more pressure on mortgage rates. They are probably going to be around the 6% range for the foreseeable future.
Let’s predict the NSDCC monthly sales count for the rest of the year.
Today, we have 411 active listings, and we are back to the environment where we can expect that only 60% of those have a chance of selling. It’s probably too late for any active listing to close in September, so let’s sprinkle those 247 probable sales over the next three months, or 82 per month.
There are 152 pendings today, and 111 of those went pending before September 1st. They have released all contingencies on most of those, but let’s say only 100 actually close, and 90 are September closings.
Of the other 41 listings that just went pending, only half of them will close, or 20.
There have been 45 sales already close in September, so adding the two is 90 + 45 = 135 sales this month. Last September we had 269 closings.
NSDCC Monthly Sales, estimated:
September: 135
October: 110
November: 90
December: 90
4Q22 = 290
There will be other new listings over the next three months that will close, and it would be great if every month has 100+ closings – so the above is hopefully the worst-case scenario. But even if we have 300 or more closings in the fourth quarter, look at how that compares to recent NSDCC history:
4Q21 = 636
4Q20 = 977
4Q19 = 681
Even though the month-over-month change in the CPI looks very healthy, the panic will ensue and the real estate markets shut down until February….and probably get off to a slow start then.
People still want to buy, and people still want to sell. Everyone will just be waiting around until February, hoping something will be different!
by Jim the Realtor | Sep 12, 2022 | 1-story, Boomers, Carlsbad, Listing Agent Practices, Thinking of Buying?
We opened escrow today on my first contingent sale in 2+ years – where my buyer has to sell their home to purchase the subject property.
There were two offers submitted – and BOTH were contingent upon selling another property!
Thankfully, the house we’re going to sell is a single-level home in Aviara, which was well-known to the listing agent – plus I submitted my price, a thorough set of comps, and photos to help him with the decision.
It means we’ll have an open-house extravaganza coming this weekend, and get to test the demand for a prime one-story home with all the extras….including an attractive price! Stay tuned for more on Thursday!
by Jim the Realtor | Sep 12, 2022 | 2023, Inventory
There were 31 and 38 new listings between La Jolla and Carlsbad in each of the last two weeks, which is incredible – the last time we had those numbers was in the beginning of January! As recently as 2019, the number of new listings in the middle of September were 100+ per week.
The NSDCC monthly sales counts will be crushed for the rest of 2022 – there will probably be at least two months when there will be fewer than 100 sales. There have been 40 NSDCC sales so far in September, and only five of them closed over the list price (with two of those at +$1,000 over or less).
Will they be the superior homes where the sellers held out, and buyers paid retail? Or will they be the homes where sellers didn’t Get Good Help, and they give away their home in a panic?
The biggest problem is that the comps used to price homes in 2023 will be fewer and farther between, which will mean that we’ll get off to a slow start in the first quarter as everyone does the wait-and-see.
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by Jim the Realtor | Sep 10, 2022 | Forecasts, Interest Rates/Loan Limits, Jim's Take on the Market |
If rates would stay around 5% over the next four quarters, the market should digest it and get comfortable with the new era. But how reliable are these experts? After all, they are the mortgage business – shouldn’t their forecasts be pretty close? Well, hmm, no:
by Jim the Realtor | Sep 10, 2022 | 2022, Bidding Wars, Frenzy
I had mentioned in the comments section that I showed a house on Labor Day that was priced at $2,195,000. The temperature was so hot that I literally said to my buyers that no agents would be working on the holiday, let alone writing offers, so we should have an easy path to escrow. We wrote a full-price offer and expected the seller to sign it on Tuesday.
Donna suggested that I call the listing agent to see if there were any other offers. I shrugged it off, thinking there weren’t going to be any other offers – heck, the market is dying a slow death, right?
So Donna called, and found out that there was an offer, and it was over list price.
By late Tuesday, there were SEVEN offers.
It felt like 2021 all over again as the listing agent gathered the highest-and-best offers from the contestants. Yesterday, she revealed that the decision was going to be between my buyers and one other, and that we were in second place.
We had bumped our offer to $2,450,000, and that wasn’t enough to win? Wow!
I asked her to tell me the number to beat…..and she did, and sent me the document to prove it (snip above).
Ultimately my buyers decided not to go higher. But I complimented the agent for her transparency, and told her that I wish every listing agent would do that. I guess it’s possible with blind bidding that a buyer might go wild, but we were already 12% over the list price in a non-frenzy environment. It’s much more likely that my buyers would go higher if they had a number to hit, and be able to say yes or no, rather than having to grope around in the dark trying to guess what it would take to win.
Congratulations to the seller and listing agent, and bravo – job well done.
by Jim the Realtor | Sep 9, 2022 | 2023, Frenzy, Inventory
Above, Bill shows how the number of new listings is dropping off in San Diego.
Yes, in the top chart, there were 20.7% more active listings YoY because you can wrongly price a listing today. Last year, just about everything was selling, which is very unusual!
In August, 2019, there were 3,007 detached homes listed for sale in San Diego County, and 67% of them sold. Last August, there were 2,608 detached homes listed for sale, and 83% of them sold!
We don’t want to get alarmed by any comparisons to the Uber-Frenzy of 2021.
The counts are a little different in this graph, but you can see the huge differences between the pandemic inventory, and normal times.
Today, there are 2,859 active listings of detached-homes in San Diego County. I won’t be looking for the panic button until that number gets over 6,000 – which may never happen again:
As recently as 2018, there were 10,000+ houses for sale, and today there are fewer than 3,000?
If there was any panic, it would be because the market isn’t correcting – it’s shutting down:
https://calculatedrisk.substack.com/p/1st-look-at-local-housing-markets-86d
by Jim the Realtor | Sep 8, 2022 | 2023, Forecasts, Sales and Price Check |
I said: 0% appreciation for NSDCC (La Jolla to Carlsbad) in 2023.
Zillow says: +1.5% to +1.9% for NSDCC.
Goldman Sachs says: -1% for San Diego.
Moody’s has San Diego County home prices changing –3.65% between now and the end of 2023, and then -2.9% by the end of 2024.
What do you say?
Hat tip to shadash for sending this in:
https://finance.yahoo.com/news/home-prices-fall-goldman-sachs-expects-104729829.html
by Jim the Realtor | Sep 8, 2022 | 2023, ADU, Boomer Liquidations, Boomers, Jim's Take on the Market
Around the coast, the housing stock is finite – there isn’t any more room to build new houses. Whether they knew it or not at the time, everyone has bought their ‘forever’ home and aging-in-place has become the natural trend. The higher prices and rates have locked out the majority of possible home buyers, but there still aren’t enough homes to sell – evidenced by the relatively low inventory.
A month ago, there were 466 houses for sale between Carlsbad and La Jolla, and today we’re down to 422 active listings – in an era where other areas are reporting a surge in inventory. There is a real push to build granny flats to create more housing, but that isn’t going to help the resale market. In fact, the building of ADUs will actually make the real estate market WORSE by keeping more seniors aging-in-place, and limiting the resale inventory.
Higher rates and prices will only continue the shift of homeownership being for the elite – only.
From the AARP:
The COVID-19 pandemic has altered how people think about their lives and homes – which has collided with exponential growth in the number of older heads of households and renters. These trends highlight the urgent need to rapidly increase and improve age-friendly and affordable community and housing options.
AARP’s 2021 Home and Community Preferences survey found that over three-quarters (77%) of adults age 50 and older want to remain in their homes as they age. This desire is consistent across the lifespan with 63% of adults overall saying the same. The numbers of older adults wanting to remain in their homes as they age has remained relatively consistent for more than a decade and was not impacted by the pandemic.
Increasing the number of multigenerational households, providing more options like accessory dwelling units (ADUs) or “in-law units”, and encouraging renovations that support aging-in-place are all critical to support this desire.
https://livablecommunities.aarpinternational.org/
by Jim the Realtor | Sep 7, 2022 | 1-story, Boomers, Thinking of Buying?
For those who prefer a single-level home and would like to peruse a curated group, check out this on-going collection of my favorite one-story homes for sale between La Jolla and Carlsbad here:
https://www.compass.com/c/jim-klinge/nsdcc-one-story-houses?agent_id=5b51d51d9474a8364b9a8353
by Jim the Realtor | Sep 7, 2022 | Realtor, Realtor Training, Realtors Talking Shop |
Over the last few years there are two groups of buyers who have been left behind; the self-employed who have a tough time qualifying for a mortgage, and the contingent buyers because there have been enough non-contingent buyers that sellers would prefer.
There hasn’t been any relief for either group, and probably none forthcoming.
Those who want to use the equity in their home to purchase their next house can usually find a solution if they want to move bad enough. You can always do the double move, where you sell first, then rent and wait patiently to buy the next one. You can get a bridge loan, though expensive and qualifying isn’t easy. You can leverage yourself to the hilt and buy the next home before selling.
But for some, those options don’t fit. Just the ease of having the next purchase be simply tied to the sale of the last home might be a relief for some sellers to get comfortable with moving. But will listing agents consider an offer that is contingent upon the sale of another?
They just might – especially over the next four months. Those who should consider it are the listing agents of the 171 homes for sale between La Jolla and Carlsbad that have been on the market for more than 60 days (41% of the total number of active listings).
The CAR just revised the COP form in June:
I’m sure all of these paragraphs are necessary, but they leave out the most important ingredient and the fact that would make a difference – the listed price of the contingent property!
If I had a listing that had been on the market for 60+ days and was heading into the 2022 off-season (otherwise known as the Post-Frenzy Apocalypse), I’d consider an offer contingent upon the buyer’s home selling – and I’d give them the 17 days in paragraph 7C2 checked in red above. But I’d want to know what your list price is!
If I thought the buyer’s home was priced aggressively, then what do I have to lose? Seventeen days of market time, during which I can still be looking for back-up buyers……in an era when I might not get another showing, let alone an offer?
Heck yeah, I’d consider a contingent offer – if I just knew what the list price was!
If I was representing the buyer, I’d include my signed listing of the buyer’s home to show – and sell – the listing agent on how our contingent offer would be a viable solution. Let’s do it!
