Paying over the list price must have some addictive qualities!
Either that, or the superior homes are still attracting a lot of attention. Well into the higher-rate environment, more than half of the June buyers paid over the list price!
Here is the breakdown by price range:
The average and median sales prices have been drifting downward, but both are still above the list prices:
The year-over-year sales are going to look terrible because 2021 was an incredible frenzy. The NSDCC June sales in the three previous years were 274, 282, and 299, so the 188 is only 34% below that average.
My La Jolla sale was the fifth-highest sales price in June, and sold for $1,150,000 more than the oceanfront house on Calumet. My $800,000 over list was #1 – it was the most over list of all the June sales!
There are many who insist that real estate will follow its historical trend, and I like to say ‘it’s different now’ just to irritate them.
What are the things that are different?
Every buyer has had to qualify for their mortgage and use a sizable down payment, the vast majority have been buying their forever home (even if they didn’t know it at the time), and homeowners at the coast will likely be paying six figures in capital-gains taxes if they sell – which means that they need to leave San Diego to really make it worth moving. As a result, the number of people who are willing to sell has plummeted, which has kept the pressure on pricing.
The demand is different too. Back in the old days, it used to be loosely tied to incomes, but that flew out the window decades ago around here. The influx of affluent people has helped, but there is also a big difference that these researchers have explored – working from home:
It’s no secret that Americans’ newfound remote work lifestyles drove demand for larger homes with more comfortable workspaces.
What’s new: That demand may be responsible for more than half of the surge in real estate prices during the pandemic, according to a working paper published by the National Bureau of Economic Research.
It’s one of the first papers that aims to quantify how remote work reshaped the housing market.
Why it matters: If the research holds up, it signals a fundamental shift in the housing market — that it wasn’t just low-interest rates and fiscal stimulus that drove up housing prices.
By the numbers: It found that remote work led to about 15 percentage points of the 24% average increase in house prices between December 2019 and November 2021.
Details: The paper’s authors are John A. Mondragon, an economist at the Federal Reserve Bank of San Francisco, and Johannes Wieland, of the University of California, San Diego’s economics department.
The researchers found that after controlling for COVID migration, regions with the highest rates of remote work experienced much higher home price growth during the period.
They also observed a similar effect on residential rents — along with declines in commercial rents — in these areas.
What they’re saying: This implies a shift in demand, as many pandemic homebuyers and renters sought to upgrade to larger, and more expensive homes to support their telework lifestyles, said Mondragon.
The bottom line: Policymakers like those at the Fed would be wise to pay close attention to the evolution of remote work because it will help determine the future of home prices — and of overall inflation, the economists wrote.
If there hasn’t been a surge of inventory by now, it’s not coming – at least not this year.
There might be some nice action over the next couple of weeks as buyers try to land a deal before school starts, but there won’t be big discounts – they will have to pay the price.
It will probably be the same in 2023 too.
How do I know?
Ask any potential, or actual, home sellers around the coast:
“You already have to pay six figures in capital-gains taxes when selling your home (and if they are selling a home they have owned since the 1970s or 1980s, it could be $500,000 to $1,000,000 in taxes).
“How do you feel about lowering your price by $100,000 or $200,000 too?”
“How do you feel about losing that much money?”
Their answer will tell you everything about the future of our market – they’re not going to give it away!
It’s been the craziest six months of real estate ever! Expect it to get downright boring from here.
Hat tip to Rob Dawg for sending in the news that one of the most engaging architects of our time has passed away at age 97. Harry lacked formal architecture training, but that didn’t stop him from designing 100+ houses. My favorite is the Sandcastle (above), the house he built himself from reclaimed woods and other parts found at the junkyard. He lived there for the second half of his life, and he used to sit up in the tower to do his designing!
Here are quick interview questions plus a Vimeo film linked at the bottom with clips of the Sandcastle interior (at the 9:15-min mark) and his 1958 Mercedes Benz 190SL that he converted to electric power:
These are excerpts from Scott G’s newsletter yesterday:
The most recent migration headlines concern Silicon Valley. The narrative: It sucks and everyone is leaving. Venture capitalists who built their fortunes in the Valley say they’re “over” it. The Bay Area is “crashing” and has become “unhinged” with wokeness. “San Francisco is Detroit and Miami is the future,” claimed a recent VC transplant. Elon Musk relocated Tesla from California to Texas, saying California state laws were “fascist.” Newspapers across the country report on a “tech exodus,” with quotes and anecdotes from aggrieved tech workers. California’s dead. (So is New York.) Tech’s moving to Texas and Florida, and the money will follow.
We’ve been to this movie before — it’s called bullshit. In 2005, Silicon Valley was losing its edge and hemorrhaging jobs. In 2009 it was shrinking, on the brink of death. In 2010 it was on the brink of death again. In 2012 the Golden Age of the Valley was over. In 2014, San Francisco was declared the next Detroit. However, the next Detroit has HQs within a 15 mile radius whose combined market caps rival the GDP of Germany and Japan combined. I know, apples/oranges … both are fruit. You get the idea.
Ninety-seven percent of startups stayed in the Bay Area in 2020. Of the 1.2% that moved, a fifth went somewhere else in California, and another fifth went to New York. The Valley still dominates the startup scene. Last year firms domiciled in the Bay Area received over a third of total U.S. venture capital funding. Austin and Miami received 1.5% and 1.4%, respectively — less than Seattle, Philadelphia, or D.C. I don’t believe a city can sustain a robust technology sector unless it has a world-class engineering school (e.g., Berkeley, Stanford, etc.). Also, declining quality of life and overwhelmed infrastructure is an apt descriptor of … Miami. And Miami’s population actually declined in 2021.
The tech exodus narrative is a distraction. The real domestic migration trend is…..less migration. Specifically, people aren’t moving. In 1948 roughly a fifth of Americans changed residences. That number has been steadily declining since. During the pandemic, we read opinion pieces about everyone quitting their job and moving to Maine. There was a feeling that migration habits were changing; in reality the song remains (increasingly) the same. In 2021, only 8.4% of Americans moved — an all-time low.
It’s been happening for several decades, though nobody can figure out why. An aging population and a younger cohort described as the “complacent generation” are factors, but there must be more. Lack of portable health care and a decline in the lifestyle once sought in the West could also be explainers. My theory is that, like everything else, mobility has become a luxury item costs can only be borne by college grads (who are themselves increasingly anchored by student loan debt).
The problem isn’t that a tech Karen is leaving the Bay Area, it’s that not enough people are leaving any area. “Remote Work” should be called “Work from Home” as it’s decreasingly remote, just at home. Six in 10 people who move stay within their county; eight in 10 stay in-state.
The squeeze is coming from several directions, and all are rooted in the fact that there isn’t enough business to go around. Thankfully, half of the realtors are of retirement age, and will drift away naturally.
The pending class-action lawsuits will likely de-couple the commissions, and sellers won’t be paying a bounty to buyer-agents like they have since the beginning of time. Agents who can justify their value and services can always contract with buyers, and we’ll see where that goes. But it won’t go very far.
There are also forces within the industry that are deliberately putting the squeeze on. Opendoor has developed a nice little package of exclusive listings presented to buyers at a 2% savings if they don’t mind just placing their order online:
Because the people who put this together have never been realtors, it never occurs to them that paying a buyer’s agent has value. Homebuyers who get good help are going to feel more comfortable paying more the home, and conversely, with no help, they will want to pay less to compensate.
Is the tease of a 2% discount enough? We will see. But it’s another example of the pressure to squeeze out the buyer-agents, and Opendoor thinks they are passing the savings along to the buyers. But does any seller want to have buyers floating around, hoping to figure out the buying details on their own and cope with buyer’s remorse? No! It’s why the I-Pay-One companies never last because they don’t get it – buyers need and want help.
Instead, what has developed during a raging seller’s market is the thought that eliminating buyer-agents is a good thing. The message is clear – we don’t respect what you do, we don’t think we need you, and we don’t care what you think about it.
Redfin has no respect either.
On homes that they own – and can pay any rate – they are down to 1.75%:
They are giving buyer-agents the double middle-finger salute, and they don’t care what you think about it. Another option would be for them to pay a healthy commission and earn some respect for themselves, but that doesn’t occur to them either.
It would be worth it to champion the value that buyer-agents bring to the table, but nobody appears interested in that angle. Instead, they think the cost-cutting somehow justifies it, without considering – if it results in buyers paying less, then did you get anywhere?
I mentioned the strategy we employed on Avenida Sierra.
After a low-priced new listing came on the market at $1,350,000 the day before we were going to launch, we lowered our list price from $1,595,000 to $1,395,000 to ensure that we were as attractive as any of the six competing listings (four of which had hit the market in the previous week).
Because the $1,350,000 was only seven doors up the street, we had to go head-to-head. You can’t just shrug it off – if we would have launched at $1,595,000, all we would have done is help them sell!
How did it turn out?
We received multiple offers, and I ran our sales price up to $1,550,000!
It is easier to go up on price, than down!
We are the only listing that has been marked pending too:
I raised the list price to reflect the sales price, and send a message to others that more is possible!
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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.
