This is the probably the best example this month of the type of homes that are getting top dollar – large newer coastal suburban homes that are upgraded throughout. The list price was $2,549,000, and this closed for $2,850,000 cash plus the buyer paid an additional $150,000 for the furnishings:
The prices of everything are soaring in the middle of a pandemic that’s so bad they are cancelling football games – the world is spinning out of control!
I can’t think of a better song to wrap up the Wednesday Rock Blogging for 2021:
We know that media types are looking to sell newspapers, and if it bleeds, it leads. The article in the UT this morning about the San Diego Case-Shiller Index starts with this:
San Diego continued to slide down in rankings of the nation’s hottest real estate markets in October.
The article doesn’t mention the lower inventory in 2021, or offer any other explanation. But it does use the D-word, deceleration, in their headline that everyone is using to describe the last few months.
But are home prices really decelerating?
All of the comparisons are judging the year-over-year changes, without any mention of how the 2020 numbers were rising quickly too. If we add the 2020 monthly YoY increases to those from this year, here’s what the combined 2-year increases would look like:
The indices in the last half of 2019 had flatlined, so the graph above is a pretty good visual on how our local index has been marching skyward since the pandemic started.
We can also note that the month-over-month increases are probably a better gauge of current activity – and they have picked up since we had actual deceleration:
Here’s a graph from a different article that also mentioned how price gains are slowing:
If that’s what slowing looks like, I’ll take it!
But let’s not misinterpret the recent index readings and then give potential home buyers the impression that our local market conditions are changing, because they’re not (or at least not yet).
All that matters in 2022 is inventory. Here’s how prices will be affected:
PRICES KEEP MARCHING SKYWARD:
PRICE-INCREASES SLOW:
PRICES FLATLINE OR GO DOWN:
We should know by March/April which way it’s going to break!
Showings are really down over the last 30+ days – the current weekly average is -66%, compared to the first week of January.
But there’s just nothing left to look at today, unlike last year when inventory was much higher. The second half of this year had 35% fewer NSDCC listings than in the second half of 2020.
The 2022 demand should be very pent-up!
San Diego fell out of the top three cities for annual change – we’re down to #6 for October. But we have the highest home prices of those six cities! Though every region had double-digit YoY gains, a few cities (Boston, Denver, Minneapolis, Portland, San Francisco, and Washington) look like they’ve pulled into Plateau City.
Remember a year ago when we hit +11.5% YoY and thought we’ve never had it so good?
San Diego Non-Seasonally-Adjusted CSI changes
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“In October 2021, U.S. home prices moved substantially higher, but at a decelerating rate,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite Index rose 19.1% from year-ago levels, and the 10- and 20-City Composites gained 17.1% and 18.4%, respectively. In all three cases, October’s gains were below September’s, and September’s gains were below August’s. That said, October’s 19.1% gain in the National Composite is the fourth-highest reading in the 34 years covered by our data. (The top three were the three months immediately preceding October.)
“We continue to see very strong growth at the city level. All 20 cities saw price increases in the year ended October 2021. October’s increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 17 of them. As was the case last month, however, in 14 of 20 cities, prices decelerated – i.e., increased by less in October than they had done in September.
“Phoenix’s 32.3% increase led all cities for the 29th consecutive month. Tampa (+28.1%) and Miami (+25.7%) continued in second and third place in October, narrowly edging out Las Vegas, Dallas, and San Diego. Prices were strongest in the South and Southeast (both +24.4%), but every region continued to log double-digit gains.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred over the next several years, or reflects a more permanent secular change.”
In hopes of encouraging more readers to move somewhere (anywhere!), I took a spin around the north-coastal region of California via Zillow. I don’t know anything else about the area other than it is remote – readers who know more can feel free to comment!
1,732sf for $395,000:
https://www.zillow.com/homedetails/560-Reddy-Ave-Crescent-City-CA-95531/82854913_zpid/
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$399,900 for 1.47-acre oceanfront lot:
https://www.zillow.com/homedetails/18-Elias-Way-Smith-River-CA-95567/2067565430_zpid/
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1,832sf for $429,000:
https://www.zillow.com/homedetails/270-Clearlake-Ave-Lakeport-CA-95453/19085522_zpid/
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1,500sf for $469,900:
https://www.zillow.com/homedetails/3121-Bonanza-St-McKinleyville-CA-95519/18844002_zpid/
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1,830sf on an acre that backs to golf for $574,000:
https://www.zillow.com/homedetails/1755-Murray-Rd-McKinleyville-CA-95519/18843849_zpid/
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3,162sf for $749,000:
https://www.zillow.com/homedetails/948-Main-St-Ferndale-CA-95536/18822513_zpid/
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2,568sf for $963,000:
https://www.zillow.com/homedetails/15300-Us-Highway-101-N-Smith-River-CA-95567/2073113069_zpid/
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It is appropriate that the last reading of 2021 shows more pendings than actives (170 vs 164)!
How does the last week of the year compare to previous years? I didn’t split off the $3,000,000+ category until 2019, but you get the idea here:
NSDCC (La Jolla to Carlsbad) Number of Active Listings:
| Price Range | ||||
| $0 – $1.0M | ||||
| $1.0M – $1.5M | ||||
| $1.5M – $2.0M | ||||
| $2.0M – $3.0M | ||||
| $3.0M+ |
A monumental shift in just three years!
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Some of the better historical photos I saw this year!
Top Gun house, 1880
Bauer Lumber on State Street in Carlsbad, 1930s
Carlsbad in the late-1950s
Date unknown – maybe late-1970s or early-1980s?
Encinitas in 1932
Enlarge this Del Mar/Solana Beach photo and it’s still hard to find a house….in 1941!
The Del Mar/La Jolla border in 1960!
La Jolla Windansea, 1930
Stadium construction began in 1966
The year 2021 will be remembered as the year they tore down the Murph.
It opened in 1967 as San Diego Stadium, and then re-named Jack Murphy Stadium after the local sportswriter who helped build support for its construction. The surrounding area was fairly innocent at the time – for a short time in the 1980’s, I lived where homes were built in the bottom right, and used to walk to Padres games:
It was the only stadium ever to host both the Super Bowl and the World Series in the same year (1998), and it was one of three stadiums to host the World Series, the MLB All-Star Game, and the Super Bowl (along with the Metrodome in Minneapolis and Los Angeles Memorial Coliseum in Los Angeles).
This shot of the 1992 All-Star Game became one of the most iconic photos in local history, and ended up in the Baseball Hall of Fame:
The 2021 view from the same spot:
My favorite demo photograph – the scoreboard standing alone in an appropriately-unnamed stadium:
Here is epic drone footage of the final days:
The big-time concerts held at the Murph were legendary – we were there for the Eagles, and the last two:
The stadium hosted the Chargers and Padres, Holiday and Poinsettia Bowl games, SDSU football, rugby, high-school football championships, soccer, motocross, car races, the Super Trucks, used-car sales, American Idol, Billy Graham, and the Boy Scouts for their annual Scout Fair!
Me showing the kid a dance step or two…..
Natalie had a covid scare but tested negative four days in a row so she was able to join Kayla, Frank and us for Christmas weekend!
We appreciate those who include us in their search for the perfect home for the holidays – thank you!
Christmas dinner! L-R: Donna’s cousin Krista, sister Suzanne, Natalie, Frank & Kayla, and sister Elizabeth (and Donna in the background)
