On August 8th, the number of pending listings was down to 151 (which was the lowest since early January), and it appeared that the market might shut down early this year.
But today we’re back up to 175 pendings, and still have 449 active listings for buyers to consider.
The number of actives should shrink a bit in September, but pricing should stay range-bound because sellers aren’t going to give up – they will cancel instead.
Here are the remarkably-steady weekly averages of this year’s list-price-per-square-foot, by price range:
Buyers were happy to pay these prices earlier this year when rates were in the 3s!
Is a lower mortgage rate the only thing missing? The sellers can help with that.
It looks like we will muddle through the rest of 2022, and begin next year with prices that look pretty similar to what we have today.
Riggins, 67, retired early from his career in construction and maintenance for the city of Richmond after a knee injury put him on disability in 2008. But, the income from his tenants helped keep him afloat.
“The building was in good shape, and I had good tenants,” Riggins said. “Everything was just happy. Until. Yeah, until.”
Riggins went through a divorce and sought a modification on his mortgage in 2019. While that was being considered, his lender foreclosed. Everything his parents had worked for seemed to slip through his fingers.
“That sent me through a great depression for a year,” he said. “When you do everything you can do, and it seems like it’s not enough, it’s like everything is against you.”
It was this partnership with a nonprofit that allowed the organization to buy the house under a 2020 California law, SB 1079. It allows tenants of foreclosed homes, owner-occupants, governments and nonprofits an exclusive 45-day window to match the winning bid at a foreclosure auction. It was one of 15 housing bills signed into law that year aimed at creating more affordable opportunities for renters and homeowners.
Southside’s website states its mission is “advocating for the needs of communities and families” to “stabilize communities throughout the United States.” And while that should have been a relief to Riggins, it wasn’t. He couldn’t understand why a nonprofit, nearly 3,000 miles away, had purchased his property.
“Why would they want to buy something in California?” Riggins wondered. “And I think that’s the part that just really has me just furious. Why would you want to invest in something that you have never seen?”
The two-story triplex, with its salmon-colored stucco and white trim, was one of at least 74 properties Southside Neighborhood Stabilization scooped up since it formed in early 2021.
The organization is one of at least three such entities created in California after SB 1079’s passage to purchase homes in partnership with nonprofits that have the stated goals of providing affordable housing to communities in need. But in a review of nearly 200 property records, and interviews with over a dozen homeowners and investors who’ve purchased properties from them, there’s little evidence these homes are actually being used as affordable housing.
“They’re all just being flipped,” said Jeff Cagle, a Central California house flipper who’s lost dozens of foreclosure auction bids to purchasers who invoked SB 1079. “The whole idea was that if nonprofits bought this, this was supposed to benefit affordable housing, but none of them were being retained as affordable housing.”
Some local markets are seeing even steeper declines over the last few months. San Jose, California, saw the largest, with home prices now down 10% in recent months, followed by Seattle (-7.7%), San Francisco (-7.4%), San Diego (-5.6%), Los Angeles (-4.3%) and Denver (-4.2%).
Home prices were still 14.3% higher in July compared with July 2021, which is more than three times the historical annual price growth, but the majority of that growth took place over the first five months of 2022, before the big spike in mortgage interest rates.
The average rate on the popular 30-year fixed mortgage began this year right around 3%, according to Mortgage News Daily. It climbed slowly month to month, pulling back slightly in May but then shot more dramatically to just over 6% in June. It is now hovering around 5.75%.
“We’ve been advising for quite some time that the dynamic between interest rates, housing inventory and home prices was untenable from an affordability perspective, and at some point, something would have to give,” said Andy Walden, vice president of enterprise research and strategy at Black Knight.
“We’re now seeing exactly that, with July’s data providing clear evidence of a significant inflection point in the market,” he added. “Further price corrections are likely on the horizon as we move into what are typically more neutral seasonal months for the housing market.”
Did you see it? Probably not, because homes selling for 5.6% below comps would be about 10% under list.
Did you feel it? I’d say yes, it’s in the air. But sellers are very reluctant to go along, and the number of sales are the proof (half of last year). Having more actives listings sitting around not selling are suspicious, but if they don’t sell then we really don’t know for sure. Sellers will be much more likely to cancel their listing at this point, than reduce their price.
Are we going to hear more like this? You better believe it! Wait until Tuesday’s Case-Shiller!
What are you going to do about it? The only question that matters!
Obviously, the majority of buyers will be happy to wait longer, hoping this be the first of many drops. But for those who sense an opportunity, there will be an occasional deal – but you will have to earn it. Home sellers aren’t going to list their home for 5% to 10% below comps – they never have, and never will.
Those who stay in the game and make offers on several properties might be able to score a deal.
When I made the comment that people are soft, it was because I was thinking about the guy who came to the open house and said he would have bought it…..except for the power lines.
If he had issues with the house, yard, etc. and the power lines were just one of the objections, then fine.
But are you going to pass on an otherwise perfect house because of power lines that are a 1/2 mile away? They don’t have flashing lights on them, and they are far enough away that you won’t hear any buzzing. With the hill behind them, they blend into the landscape – and once you move in and life takes over, you probably won’t notice them much at all.
Why should you compromise?
Because other people are compromising in order to actually buy something – it’s what happens once you realize that you’re probably not going to find a perfect house.
What if prices came down 10% to 20%? Wouldn’t that mean the chances would improve?
I guess yes, technically, the odds would be better. But if you did find a perfect house, you’d have to beat out the other buyers to win it, which will probably take over-bidding by 10% or more.
Look at the featured La Costa house of the week. It didn’t have a full bathroom downstairs to go with the 4th bedroom, but that didn’t stop ten people from making an offer. Or think of the buyers of my $7.75M listing in La Jolla. They had to live with three staircases and a one-car garage and they still paid $800,000 over the list price.
Why compromise? Because it shortens your timeline, and makes the process more manageable.
If you are looking for any reason NOT to buy a house, then you are one of the non-compromisers – which is fine. But have you noticed that every house seems to have an issue, and there is no telling when you will find the perfect home….if ever? You may never buy a house!
Instead of looking for one reason NOT to buy, be intent on finding reasons TO buy the house.
Know that every house is probably going to need at least $25,000 to $50,000 in upgrades, so look for those first, and get them out of the way. Then if you can find a house that just has more positives than negatives, you’re doing good. If positives outweigh the negatives by 3-to-1 or more, you got a winner!
Buyers who worry that their money doesn’t get them much these days will be bummed to hear that it’s probably not going to change.
The changes in the market forces are conspiring together to create less inventory, and a couple of big blows this year could really drive down the number of houses for sale in 2023.
Look at the trend so far:
Number of NSDCC detached-homes listed between January 1st and July 31st
Year
NSDCC Total Number of Listings
2015
3,386
2016
3,491
2017
3,141
2018
3,145
2019
3,177
2020
2,796
2021
2,533
2022
1,970
Why don’t people want to sell? Or why do those who might sell, talk themselves out of it so quickly?
Having to pack everything up.
Difficulty of finding a suitable replacement home.
Paying six-figures in capital-gains tax.
Have to leave town to make it worth it
Added to the list this year:
Getting a higher mortgage rate.
“Bad time to sell”
We know that over 80% of the existing mortgages have a rate that’s lower than what you can get today. Even if you could sell your home for top dollar, the thought of paying a higher interest rate is enough to stop potential sellers in their tracks.
But the last one is the killer.
Once sellers get the feeling that the market has cooled off and they might not be able to sell their home for their fantasy price, then it is WAY TOO EASY for them to suspend all thoughts of selling, and decide to wait until “the market gets better”.
Jay Powell thinks that raising rates will cause home prices to come down, but he didn’t talk to any homeowners about it. It’s only going to continue the trend of fewer homes coming to market, and keep pricing high.
The 2023 Selling Season could be an all-time dud, just because there will be so few homes available.
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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.
