Last month their annual appreciation guesses were in the 3% to 4% range, now they are up to 4.9% to 6.3% for the next 12 months!
We’ll probably exceed those in the first quarter of 2024!
If Zillow made their predictions based on traffic to their website, it would be impressive. I’m not sure how they figure these though.
Generally, they are expecting +3% to 4% in home values around here over the next 12 months:
Rob Dawg noted that the year-over-year comparisons are worth a look, now that the super-frenzy days are over. Sure enough, this month looks a lot like last December!
La Jolla is going strong, Rancho Santa Fe is back to the priced-to-sit program they made famous, and the 3 mid-range areas (in purple) have total actives/pendings of 80/45 compared to 99/44 last year.
All signs are pointing to next year being similar….unless there is a surge of inventory.
Compass agent Nikol has this new listing in Ranchview Estates, which has some of the best easterly views of Olivenhain and Rancho Santa Fe:
The local market will wind up the year with the lowest number of annual listings ever, the fewest number of annual sales ever, the highest prices ever (the latest Case-Shiller Index released tomorrow), and we’ll enter the new year with the fewest number of active listings ever.
What’s the worst thing that could happen?
We keep sliding into the Priced-To-Sit program, where sellers are happy for the market to come up to their aspirational price. It’s a strategy that was perfected in Rancho Santa Fe, where before the pandemic the actives-to-pendings ratio ran 10:1, and sellers just waited until their day came.
I’ll never forget the one RSF listing agent who took great pride in telling me that her one-year anniversary of her listing being on the market was coming up the following week. She was proud of her endurance and willingness to hold out until the ‘right buyer’ came along.
Interestingly, it was in 2012 that we had the lowest annual number of listings, and the following year got frenzied when the number of listings popped up by seven percent. There were other contributing factors to the resurgence, and our recent history is probably the exact opposite of then (years of real estate prosperity now vs. years of doom then).
Best-case scenario?
We get a 10% surge in new listings that aren’t priced ridiculously, and buyers keep buying – causing momentum to build through the selling season and give everyone assurance that it’s going to be alright.
These are getting into the lazy zone now because predicting 2% to 4% increases over the next 12 months doesn’t take any real forecasting – they are just safe guesses based on historical norms which flew out the window with rising rates about 18 months ago.
They might end of being right, but at what cost? Plunging sales. To conduct real price discovery we would need a surge of new listings to test the demand, if any. Having 100 or so sales every month in an area of 300,000 people will keep prices elevated because that’s not much of a test – the market is just barely alive.
At the beginning of 2023, the Zillow 1-year forecast for San Diego home values was -0.8%. In May, their expected 1-year appreciation rate in our local areas was around +3%.
Now they are guessing it will be around 5%….which might cause more sellers to wait longer!
When is the best time to sell?
San Diego Magazine did a nice story on Chino Farm in Rancho Santa Fe, and called it the most important farm in America! It prompted me to include some video I did there a couple of months ago:
It is inevitable that homes will be built here some day, isn’t it?
Here are each year’s sales counts for the January-through-August time frame.
It shows the extraordinary 2021 sales numbers in most areas!
But if you thought getting back to the numbers we had in 2019 would feel normal, we’re not there yet. In fact, most areas are well under their 2019 sales counts, except for Rancho Santa Fe!
The new normal is lower sales with sticky prices.
At the beginning of 2023, the Zillow 1-year forecast for San Diego home values was -0.8%. In May, their expected 1-year appreciation rate in our local areas was around +3%.
Now they are guessing it will be around 4%….which might cause more sellers to wait longer!
When is the best time to sell?
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
