These look like the towns to which people from New York and California are moving. Excerpts:
The boomer tide in the for-sale housing market is expected to continue to rise for at least the next 8 years; younger millennials will be hitting first-time home buying age at about the same time, meaning the 2020’s will be a period of sustained underlying demand in the housing market.
Year by year, these effects will be felt differently across markets.
In 2022, the market with the most demographic lift in the for-sale market is Austin, with a trend suggesting the formation of 3.4% more owning households (assuming there are homes available for them to buy). Orlando follows at 2.8%, and then Tampa at 2.7%. Of the largest 50 markets, 29 have natural owner household growth exceeding 1% in one year, the rule-of-thumb rate at which the housing stock increases nationally. The markets with the least demographic pressure for growth are Pittsburgh, Hartford and Buffalo.
Risks
There are two large known risk factors for housing markets in 2022. First, mortgage interest rates are expected to rise in 2022, making home loans more expensive for aspiring buyers. At the margin, this would restrict the inventory accessible in the most expensive markets, potentially driving up competition for the lowest-priced homes in those markets or removing them from consideration altogether.
Historically, home value appreciation in the following markets has strong negative correlation with interest rates — so if interest rates go up, these markets are likely to slow the most: San Diego, New Orleans, Washington DC, Los Angeles, San Jose and San Francisco.
Second, forecasts on the performance of stocks are incredibly wide, with analysts’ 2022 year-end targets ranging from -7% to +13%, slower growth in any case than what we’ve seen in the last 2 years if not declines. A slower stock market would mean buyers are bringing relatively less to the table for a down payment in 2022.
This would most affect markets where there are a lot of first time buyers or where more buyers are entering from lower cost areas, bringing less equity from their previous home. (Or if housing is treated as an asset it could mean a substitution to housing in the next few months. What follows addresses only the downside risk.)
In the following markets, growth has strong positive correlation with stock market returns — so if the stock market falters next year, we’d expect home value growth in these places to slow disproportionately: Phoenix, Las Vegas, Cincinnati, Hartford, St. Louis, Miami, Cleveland, Los Angeles and San Jose.
Buyers who stalled their home search when school began are going to be shocked at recent prices.
In September, there were two sales of the larger 3,362sf floor plan; one was $1,869,000 and the other was $1,875,000 (both under list). So when this house came on at $1,895,000, it seemed about right.
Housing bulls on Wall Street argue that this is an upturn that could last for a decade. Millions of millennials are now at a point in their lives when they are seeking single-family homes in the suburbs and exurbs. They are in good shape too. Almost 70 percent of homebuyers who took out new mortgages in the third quarter had credit scores above 760, according to the Federal Reserve Bank of New York.
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Mortgage rates started off the year at the “highest rates in 9 months”, but aren’t insanely higher than anything we saw last week. From the lowest rates over the past 2 months, today’s are roughly a quarter of a point higher.
As of December 31st, inventory was at 294 thousand (7-day average), compared to 420 thousand for the same week a year ago. That is a decline of 30.0%. Inventory is down 5.4% from last week.
Compared to the same week in 2019, inventory is down 61.5% from 764 thousand. A week ago, inventory was at 310 thousand, and was down 29.0% YoY.
Seasonally, inventory bottomed in April (usually inventory bottoms in January or February). Inventory last week was about 4.2% below the previous record low set-in early April 2021.
Inventory peaked for the year in early September, when inventory was at 437 thousand (the peak for the year), so inventory is currently off about 32.8% from the peak for 2021.
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Architectural Digest says the biggest design trends for 2022 will include the desire for more earthy-related color tones, contemporary conservatories, a greater attention to sensory qualities, not purely esthetics, and more curves…..
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The world’s population is currently estimated to be at 7.8 billion people. According to some estimates, the global population should peak at around 9.7 billion in 2064. Imagine how many homes need to be built to house almost 2 BILLION extra people over 40 years! If 4 people share a home, that equates to about 12 million new homes per year! Then, population could fall to 8.79 billion in 2100…..maybe a good year to wait to buy a new home?
I saw this on Greg’s twitter, and thanks to Charlie too. On the ground it seems like the market is wildly out of control, but looking at this chart it looks like we’re just one of the pack.
Does it give buyers any comfort to know that the price explosion is happening everywhere?
The NSDCC median sales price in 2021 was $1,900,000.
The NSDCC median sales price in the fourth quarter of 2021 was $1,996,875.
Today’s NSDCC median list price is a mind-boggling $5,972,500!
To better reflect the rapidly-escalating home prices between La Jolla and Carlsbad, I’ve combined the two lower price ranges and added the $4,000,000+ category.
Here are the inventory counts by price range to begin the year:
The $0 – $1,500,000 Market:
Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
9
$832/sf
35
36
The $1,500,000 – $2,000,000 Market:
Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
8
$842/sf
52
36
The $2,000,000 – $3,000,000 Market:
Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
18
$1,080/sf
127
43
The $3,000,000 – $4,000,000 Market:
Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
19
$1,230/sf
90
26
The $4,000,000+ Market:
Date
NSDCC Active Listings
Avg. LP/sf
Avg. DOM
# of Pendings
Jan 3, 2022
100
$1,884/sf
128
30
NSDCC Weekly New Listings and New Pendings
Week
New Listings
New Pendings
Total Actives
Total Pendings
Jan 3, 2022
17
14
152
164
For those who are interested in the history of the Inventory Watch, there are 2 ways to access the data at the top of the blog page:
Taking a cash offer is a sexy option but no guarantee to get past the home inspection. The best buyers work with the best agents, and another variable worth considering when selecting the winner.
Almost 27 percent of San Diego County home sales were in cash in the third quarter — the highest in seven years. Attom Data Solutions said cash purchases, instead of loans, were up from 15.4 percent at the same time last year.
Sellers typically prefer cash buyers because it guarantees money for the home quickly, whereas mortgages can be delayed — or fall through — for a variety of reasons. San Diego has seen an increase in cash offers before, said Attom records going back to 2000. The real estate data provider said 36.2 percent of homes were purchased with cash in the first quarter of 2013 as the region came out of the Great Recession. At the time, many loan programs were still suspended from the housing crash and that made cash sales more of a necessity. The last highest level for cash sales was in the third quarter of 2014, with 27.2 percent.
The difference now is potential buyers face increased competition for a limited number of homes for sale and are trying to make the best offer possible, said Raylene Brundage, a Windermere agent who sells in several North County communities. “If it’s not contingent on a loan, there is less that can go wrong,” she said.
Brundage said sellers often go for cash sales over other loan types designed for first-time buyers and the military. Those types of loans require appraisals and inspections, making it possible a transaction could be halted. Cash sales not only mean money flows quickly into bank accounts but inspections, which are needed on loans, are often waived. A deal with a mortgage could take a month or longer to complete.
Brundage said she worked with two millennial couples this year who borrowed money from parents so they could make cash offers. Both were successful in getting homes. The majority of cash sales are coming from typical homebuyers, not investors.
Attom said 7.9 percent of the San Diego County sales in the third quarter came from institutional investors, which was lower than much of the nation.
In Atlanta and Phoenix, investors are making up 19.5 percent of sales; in Charlotte, 19.3 percent; in Jacksonville, Fla., 19.1 percent; and Tucson, Ariz., 18.4 percent. Parts of the South and Midwest have some of the smallest interest from institutional investors. In Madison, Wis., investors made up 2.3 percent of sales.
The best thing about 2021 for Kayla? Her new boyfriend Frank, who is a great guy and quite a golfer too!
Natalie signed with a new talent agent and has high hopes for next-level work in the new year. Dancing on a concert tour would be ideal, all while being our marketing director!
I said that pricing will likely seem a lot higher this year.
With few recent sales to guide them, sellers and listing agents will wonder how much can they get away with on price. There are tales of a old blogger guy being wildly successful with his transparent open bidding, but other agents aren’t experienced in conducting a slow-motion auction and don’t have the guts.
Instead, the list prices will be getting packed.
When sellers wonder how high, it will be easier to lump 10%, or more, on top of the initial guess (which was probably +5% optimistic already). The zestimate, or other automated valuation, that is higher and supports the dream will be collected as proof!
But it’s the METHOD of selling that makes the +10% possible.
Bidders are turned against one another and compete for the prize. Their ego takes over and directs the bidding……and the contest is on, with no ceiling.
Will a list price that starts at 10% to 15% higher than comps produce the same results as my slow-motion auctions? Maybe, but only with the homes that are highly upgraded with all the bells & whistles and have a superior location. The real creampuffs.
The early buyers will have to tolerate such sloppy pricing, but for those who are already frustrated from not buying a house in 2020/2021, it won’t matter and they will grab whatever they can. It virtually guarantees that the first 1-3 months of the season will be scorching hot.
But there will come a day when we run out of those buyers, and the frenzy conditions will be over.
I’m sticking with my +15% appreciation, and it all happens in the first half of 2022.
Two new laws that address the housing crisis begin today (above).
Baby boomers are another year older, and more will need help with living. The multi-gen home buyers will grow in numbers, and granny flats will be an ideal solution. Many will buy a suitable property with grandma’s money, and take care of her until the end.
Some multi-gen home buyers will cope with finding an existing single-family home and adding their own granny flat. But the real opportunity will be for those sellers of properties that already have an ADU. Because the supply is low and the need is very high (and because grandma’s money came a little too easily), the prices paid for homes with existing granny flats will be excessive. There will be a separate category of comps too – those with ADUs, and those without, with a pricing differential of 10% minimum.
This could be the year that buyers have to pay for their own agent.
I don’t think many agents can make a case of why they are worth it – or at least demonstrate why they are worth as much as 2% to 3%. It would be cool to develop buyer-agent squads who are experts in their field and are worthy of compensation – and can prove it. But most will just fade away, or open up a shop of discount door-openers who don’t offer much, but get paid up front.
Another political season starts in 2022, which means an increase in the vitriol and hate. The perceived volatility will cause a few people to move to areas which are better suited for their political leanings, especially if there are riots – which is what it would take to get laid-back San Diegans to reconsider a move. It may not cause a surge of additional sellers here, but it could create more demand for homes in those politically-friendly destinations.
The difficulty of buying homes out-of-state is already tough enough, and now they are more expensive – with some now 30% to 40% higher. It could be the game-changer for potential sellers and even be the reason why the inventory has been so tight recently.
We don’t know what it will take to get more homeowners to sell.
In the past, record-high prices did the trick, but today’s prices are setting new records every month – and inventory is in decline. How many current homeowners in San Diego wouldn’t sell at any price? 80%? 90%? That’s a problem, and I’ll say that it’s something we’ve never faced before until the last few months.
At the same time, the number of San Diego County detached-home sales in 2021 will probably rank as the #2 of all-time, behind only those in 2003. There were 28,319 detached-home listings last year, and 25,029 sales, which is incredibly efficient. Virtually everything is selling!
But only 12,936 of those listings came in the second half of 2021, and if we continue at that pace or lower, it will be excruciating for buyers – and send prices to the moon.
The optimum number of listings will probably be in the 30,000 to 35,000 range. Having a small surge in listings will drive the market crazy with activity…..and force sellers and buyers to Get Good Help!
People say to me, “I bet you’re loving this market”, expecting that realtors are raking it up these days.
Not really.
I lost 50+ bidding wars with buyers this year who lost out to others who insanely overpaid with no regard for the comps, or because listing agents were too lazy to give everyone a fair chance. Neither of those are healthy for the market in general, yet no change is on the horizon for 2022.
I found myself in two more bidding wars this week!
The two properties weren’t the superior buys in top condition – instead, both were very average and priced with no regard for the comps. Yet they both had multiple offers over list price during the week between Christmas and New Years?
This is my 698th blog post of 2021, and the best way to review the year is to scroll through the highlights and lowlights here:
This home had a decent floor plan, and just needed a thorough refresh. But it shows how many buyers pass on fixers – heck, a single-level with view and pool in a gated community sold for under list ($2,900,000)!
Tom asked on our Facebook page about getting the actives and pendings data for San Diego County. Here is the InfoSparks data from the SDAR Resources page on the MLS – they are interactive so scroll over the graph lines for the exact counts:
The first graph charts the number of active listings on the last day of the month, the second graph shows the number of new listings in each month, the third graph shows the number of properties that were marked ‘pending’ in each month, and the fourth is the actual sales counts each month.
My initial reactions to each graph:
Active Listings: The frenzy let up in June/July, but it’s back now – and the last few months have been brutal for buyers. On the last day of November, 2019 we had 4,068 actives, and last month we had 1,420.
New Listings: Hard to grasp the cumulative effect so I calculated annual number of listings. In 2021 we have had 16% fewer listings than in 2018.
Pending Sales: This November’s count was almost identical to last year – which was the all-time high!
Sold Listings: The total number of sales for the year is 9% ahead of last year, and we’re not done yet!
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Jim & Donna Klinge helped us sell our home of 30 years in Ocean Hills. We were very happy with their service and would HIGHLY recommend them to anyone looking for an Honest, Knowledgeable, Skilled, Informed Efficient realty team. Both Jim & Donna were so helpful in different ways and complemented each others skills. Please refer to a more detailed review that we wrote on YELP. Thank You Both for all your help!!!
Jesse O'Hara
June 12, 2025
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A+ thank you
Lisa Tuomi
June 11, 2025
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Many years ago, we purchased a home in Carlsbad, using a realtor that was recommended to us - Jim Klinge. Fast forward to 2025, we recently had the privilege of selling 2 homes in Carlsbad, CA and didn't hesitate to reach out to Jim and Donna Klinge of Klinge Realty Group to guide us through the sales. The transactions were very different, each with its own unique situation, opportunities and challenges. From start to finish, Donna and Jim helped navigate the pre-sale preparation, the listing, showing of the house, buyer negotiations, the final close and all of the paperwork and decisions in between. What stands out with both transactions is the professionalism of Jim and Donna (and their team), wonderful communication (timely, relevant, concise), their deep understanding of market dynamics (setting realistic expectations), their access to top-notch contractors, and last, their ability to guide us across the finish line successfully. We wouldn't hesitate to use Jim and Donna in the future and highly recommend them for anyone looking to buy or sell a property in North San Diego County.
Jerry Meyer
March 28, 2025
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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!
