Chris asked how the current environment compares to the 2008 downturn.
In the summer of 2008, there were only 601 NSDCC sales between June 1st and August 31st, in spite of there being 1,348 listings that summer. For the next two years, the number of listings far exceeded the number of sales, and in the 2008-2010 period there were twice as many listings as sales. The 2010 ratio was the worst at 2.3 to 1.
This summer we only had 825 listings, and 504 sales, which is a 1.6 to 1 ratio!
The 2022 sales were 16% lower than the previous record in 2008, but there were 39% fewer listings!
We’ve never had so few listings to consider. Now that the Fed is making it so obvious that they intend to cause a recession, more potential sellers – who tend to casually read the headlines only – will delay their decision to move. Does anybody HAVE to move in 2023? Every potential seller will give it a second or third thought if they believe it will cost them several hundreds of thousands of dollars.
The NSDCC inventory next year will be the lowest ever – even Ray Charles can see that coming.
This Encinitas Ranch home was listed for $3,499,000 on March 29th – which was the week rates started going up – and had no price reductions. After 112 days on the open market, they found a buyer who closed in less than 30 days (Sept.12th) for $3,390,000 cash, which was 3% under the list price.
The buyer’s dilemma: If you are like most buyers, you are turned off by at least 90% of the inventory.
There are probably only one or two listings per month that are nice enough to capture your interest – can you stay passionate in your pursuit? Will you review every auto-notification of a new listing with the likelihood of 85% to 95% of them have no chance of being a possibility for you?
For some, and perhaps for many, it will be easier to just pay within 3% of the list price for a stale old listing. Buy the house and get settled. Pour another 5% to 10% into it during the first year to make it your own.
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!
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!
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.
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:
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.
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:
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.
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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.
