My New Listing in Aviara Mar Fiore
An incredible response so far – after three days on the market, I have 16 showing appointments tomorrow!
Here’s a quick preview:
Zillow Way Off
Homebuyers got crushed last year as home prices soared at their highest clip on record. Housing economists saw that price growth—which peaked at a year-over-year rate of 20% last year—as simply unsustainable.
Their economic models agreed: Among the seven forecast models reviewed by Fortune heading into 2022, every single one predicted home price growth would slow significantly this year.
But over the past few weeks, that consensus is no longer so unified. Now, more industry insiders are throwing out their previous forecasts and replacing them with more bullish short-term outlooks. Indeed, some experts say the 2022 spring housing market might go down as one of the most competitive on record.
Look no further than Zillow. Back in December, the home listing site predicted that U.S. home values would climb 11% this year. Economists at Zillow now say that forecast is too conservative. Their latest forecast finds home prices are set to spike 16.4% between December 2021 and December 2022. If it comes to fruition, it would mark another brutal year for home shoppers.
Why is Zillow raising its 2022 home price growth forecast? A lot of it boils down to housing inventory. During the pandemic, inventory plunged to a four-decade low as more buyers rushed into the market. That trend was predicted to reverse late last year as forbearance protection programs lapsed and mortgage rates rose. But not only has that not happened, the inventory situation has gotten worse. In January, there were just over 923,000 U.S. homes listed for sale on Zillow. That’s down 40.5% from the pre-pandemic level in January 2020, and down 19.5% from January 2021.
Simply put: The housing market is tighter right now than it was last year when bidding wars climbed to an all-time high. That explains why Zillow foresees a rough few months ahead for home shoppers.
Homebuyers and sellers alike would be wise to take Zillow’s 16.4% price growth prediction—or any other real estate forecast model—with a grain of salt. After all, none of the major real estate forecast models predicted the historic home price boom we’ve seen over the past two years. Indeed, when the pandemic struck in spring 2020, Zillow and CoreLogic both predicted home prices would fall by spring 2021.
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Except that real estate is local.
Zillow had been predicting 20% price growth locally for the last three months, but now their latest forecasts have DROPPED significantly:
NW Carlsbad, 92008:
SE Carlsbad, 92009:
NE Carlsbad, 92010:
SW Carlsbad, 92011:
Carmel Valley, 92130:
Encinitas, 92024:
La Jolla, 92037:
Rancho Santa Fe, 92067
Mission Hills, 92103:
West Rancho Bernardo, 92127:
Their 15% to 18% is still pretty good though!
Inventory Watch
Today, we have a tied ballgame!
NSDCC Actives: 179
NSDCC Pendings: 179
I’m still working on getting the right graph for quartiles, but here they are today:
1st quartile: $2,760,000
Median list price: $4,995,000
3rd quartile: $9,750,000
One quarter of the NSDCC active inventory is priced over $9,750,000!
JtR New Listing in SW Carlsbad
With the inventory so low – especially for the one-story houses – here’s a seller who senses an opportunity. We just listed the premier single-level floor plan in Aviara for a reasonable $1,900,000!
How hot are the one-story homes?
Here’s the action after 15 minutes on Saturday:
Sunday morning’s count:
https://www.zillow.com/homedetails/1344-Corvidae-St-Carlsbad-CA-92011/48180010_zpid/
I don’t know how these guys get away with these revisions after the listing hits the market:
Before Listing Hit the Market:
After Listing Hit the Market:
Mortgage Rates Near 4%
Sellers should expedite their moving plans…..
The big monthly jobs report is something that typically matters a great deal to rates.
Oddly enough, today’s jobs report was NOT seen having much of an impact for a few reasons. First off, analysts expected a much weaker number due to Omicron’s likely impact. Moreover, the Fed is almost exclusively focused on inflation right now as opposed to the labor market (employment and prices are the 2 key parts of the Fed’s job description). In short, no matter what today’s jobs numbers turned out to be, they weren’t likely to impact the market’s view of the Fed’s reaction.
All of that is now out the window, sort of. Although there are several important caveats regarding major seasonal adjustments, the jobs numbers were so much higher than the average forecast that markets were forced to respond. Fed rate hike expectations increased briskly and bond yields surged to their highest levels in more than 2 years.
If we disregard the once-in-a-lifetime volatility seen in March 2020 (and we absolutely should), today’s mortgage rates are now in line with the highs seen in October 2019. The average lender is now quoting conventional 30yr fixed rates in the 3.75-3.875% neighborhood. That’s a full eighth of a point higher than yesterday, and more than a full percentage point higher than the lowest rates in August 2021. Many less than perfect loan scenarios will see rates over 4%.
https://www.mortgagenewsdaily.com/markets/mortgage-rates-02042022
Online Home Auctions
I had a good conversation this week with the people at Doorsey, and they are well on their way to providing a sharp and effective online home auction platform that could change how homes are sold. If/when Zillow buys them and provides online auctions nationwide, agents will be wondering what happened.
This article is from November:
https://www.spokesman.com/stories/2021/nov/05/spokane-based-online-real-estate-platform-doorsey-/
Excerpts:
Doorsey, an online real estate platform founded by a group of Spokane entrepreneurs, launched this week and secured $4.1 million in a seed funding round.
Founded by Jordan Allen, Nick McLain and Matt Melville, Doorsey is an online bidding platform they say takes the guesswork out of buying a home by providing real estate agents with real-time home prices and upfront sales terms and disclosures.
“Today’s home-buying offer process is rife with frustrations for all parties,” Allen said in a statement. “Buyers and their agents want to know whether their offer can win. Sellers and their agents want to know they’re getting the best offers. And agents want to close more deals in less time.
“Doorsey solves this by allowing sellers to define upfront what it takes to win, so that buyers can compete on a level playing field and sellers can find the right buyers.”
The co-founders sought input from the local real estate community and subsequently evolved the online platform into Doorsey, which provides buyers with such things as access to home-inspection reports, sale contingencies, photos, a 3D virtual tour via Matterport and a community forum for interacting with sellers and neighbors.
Buyers can also schedule showings and view desired closing dates on the platform.
Doorsey’s listings are posted on the Spokane Multiple Listing Service and distributed through national real estate websites, including Zillow, Trulia, Redfin and Realtor.com.
Doorsey has obtained $4.1 million in seed funding – an early stage of capital investment in startups – allowing it to build-out its product, hire more employees and expand to key markets nationwide within two years, according to the company.
The funding round was led by 166 2nd Financial Services with participation from Agya Ventures, Liquid 2 Ventures and SRM Development, among other investors.
Former NFL quarterback Joe Montana is a managing partner of San Francisco-based Liquid 2 Ventures, while 166 2nd Financial Services is led by former WeWork CEO and co-founder Adam Neumann.
Moving The Dip
The South Carlsbad Coastline Project is stirring a lot of interest from people at the prospect of transforming 60 acres of city-owned land along the 101 Coast Highway. City planners held a virtual public meeting Monday to discuss the vision and hear ideas from people who live in Carlsbad.
“We really want to start with, ‘What’s the overall vision?’ We want to let people imagine what they want this space to be,” said Kristina Ray, spokesperson for the City of Carlsbad.
In May of 2020, the City of Carlsbad acquired grant funding for over $500,000 from the California State Coastal Conservancy to design a plan that would increase resilience to rising sea levels. Part of this effort would involve relocating South Carlsbad Boulevard further away from the coastline.
“We want to create more space for people, move the road over to the east a little bit, and you would free up like 60 acres worth of land,” said Ray.
ER Follow-Up
There were five new Encinitas Ranch listings that launched last week. All had open houses last weekend, and it was busy (I saw three).
It’s probably not surprising to hear that the two that went pending were the lowest-priced listings. The 3,501sf house was a one-story and on the golf course too, so their reasonable $2,500,000 list price was very attractive. The seller had talked to five Compass agents, and he told me that he wanted $4,000,000. Hopefully he got over $3,000,000?
I heard one buyer say that he was tired of the big rush in the beginning, where buyers throw crazy money at the seller. He said that he was going to hold back, and see if it happens here.
It was feeling more…..normal. Dare I say?
Darin and I are buddies so I don’t think he’d mind if we tour his listing of 649 Cypress Hills:
Inventory Count
There will be another 20 or so new listings trickling in the coming weeks that will grow our January count. But as of today, there were only 196 houses listed for sale between La Jolla and Carlsbad last month – and 103 of them have already gone pending!
In January, 2021 we had 288 new listings.
While the 30% decline is startling, I’ll blame it on the pandemic and be optimistic about additional listings in spring making up for some of that deficit.
Last year it picked up quite a bit after January. The total count of new NSDCC listings in the first five months of 2021 was 1,780, so hopefully this year we’ll see at least 1,500 – hang in there buyers!
Bill Withers
We lost Bill in 2020 – he was 81.
