Inventory Watch
Buyers are still scrambling to find a home – there have been more new pendings than new listings in each of the last three weeks!
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Vanessa’s House
Where to Move
Though this graph is from 2019, I think it shows that people don’t move far from home.
Hat tip to Rob Dawg for sending in this link with loads of data:
https://lusk.usc.edu/sites/default/files/attachments/USC_CasdenRealEstateEconomicsReport_Spring.pdf
Here is the map for most of Riverside County – Temecula is a good option for movers because it’s close to SD County and a place where you can buy a newer home for less and still keep your SD job and doctors:
Over List, October
The insanity is finding a comfortable range…..until next spring:
NSDCC Detached-Home Sales, % Closed Over List Price
January: 38%
February: 43%
March: 53%
April: 55%
May: 54%
June: 59%
July: 64%
August: 55%
September: 41%
October: 45%
A slight uptick in the overall percentage, but the high-end buyers aren’t going for this nonsense any more:
Percentage Of Sales Over List Price by Price Range
| Price Range | ||||||||
| $0 – $1.0M | ||||||||
| $1.0M – $1.5M | ||||||||
| $1.5M – $2.0M | ||||||||
| $2.0M – $3.0M | ||||||||
| $3M+ |
October saw new highs in average list and sales prices, which would indicate strong action in the higher-end homes. The medians have been fairly steady:
NSDCC Average and Median Prices
| Month | |||||
| Feb | |||||
| March | |||||
| April | |||||
| May | |||||
| June | |||||
| July | |||||
| Aug | |||||
| Sept | |||||
| Oct |
The average sales price increased 30% YoY, and the median sales price is up 13% YoY, but that is also compared to the 382 sales last October – which was, and will always be, the most sales in any October.
As sales taper off over the next 2-3 months, it might cause a little more volatility in these pricing metrics.
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Old G
For about the same money that bought this 5,000sf oceanfront house in Carlsbad in 1995 (above), you now get this in North Escondido – just closed for $1,050,000:
Cantarini Ranch/Sunny Creek
For those who want to purchase a brand-new home in Carlsbad, the Sunny Creek area is the last remaining spot where 100+ homes will be built eventually.
The ‘subject property’ above has listed for $7,500,000 for 19 approved lots:
https://www.loopnet.com/Listing/Sunny-Creek-Rd-Carlsbad-CA/24450629/
But the Big Kahuna is the 104-lot Cantarini Ranch property, which has been in process since 1996. The detailed history of its development can be found here:
https://cantarini-hollysprings.com/history
It is owned by the Wests, who are the billionaires who also own the West Bistro, and West Steakhouse on Cannon – both of which are rumored to remain closed after the pandemic. The Cantarini Ranch story is a fascinating tale on the trouble people have getting homes built.
Thank You Veterans!
Veterans – thank you for your service!
JT
This was a bucket-list show for wifey – the tall kid on the left is JT’s son Henry:
Flipping Tract Houses
The sellers paid $1,680,000 in July. They sold for $2,075,000 on Nov 3rd:
It sold for $574,000 when new in 1998.
NSDCC Market Conditions, 2022
https://www.calculatedriskblog.com/2021/11/2nd-look-at-local-housing-markets-in.html
Our drop in inventory is the most pronounced of any area in the country.
During the previous peaks in pricing, more homeowners would gladly sell for a record price…..and parlay their gains into a bigger home down the street or around the corner. But that was when you could buy an upgrade for an extra $100,000 or $200,000 – now it takes a million!
What about the long-timers? Those who moved up a couple of times were able to achieve their so-called dream home, and have now become very comfortable. Even though Prop 9 was intended to encourage the seniors to take their ultra-low property tax basis with them when they downsize, it’s not enough of a benefit to change the trend.
The end result? You need to leave town to make moving worth it. But nobody wants to go!
Of all the towns in America, we probably have it better than anyone….which means we should have the fewest number of people who are willing to leave town.
The logjam in the market is caused by the seniors who are aging in place, instead of downsizing or moving to the retirement home. Those who are over 75 years old are probably staying their current home for the duration. We need more people who are ages 55-75 to pack it up!
The only hope is that the baby boomers who haven’t saved enough money for retirement are counting on their home equity to get them through. It doesn’t mean they have to move though – they can get a reverse mortgage to tap a decent chunk of their equity – without monthly payments!
But for those NSDCC locals who are willing to leave town in order to liberate their home equity, they will enjoy a hyper-frenzy in 2022.
I don’t think there will be enough of them for us to get back to normal inventory levels. It could actually get worse in 2022, and inventory go down. Can you imagine a market with less inventory?
Don’t be surprised if we have fewer homes for sale in 2022 – causing the frenzy to blast off:
- Virtually every house sells.
- Pricing goes ballistic.
- Homes are sold differently.
If we do have additional homes come to market, the existing demand will soak them all up. It will take a flood of inventory to cool off the demand – meaning more than twice the inventory we had this year.
One source of additional inventory might be the retiring realtors who can’t hang with the big dogs, and they turnover their client database to an agent before they leave town. If you are in that category, let’s talk!
Get Good Help!
