Happy Birthday Doug; it’s hard to believe you’ve been gone for four years already – we miss you, and I wish you would have been here for this insanity! Here we are discussing the 2013 frenzy slowdown, and he was right with his prediction:
Another thought by Doug that didn’t make the video:
The number of oceanfront properties doesn’t change, yet how many millionaires are created daily?
(it’s at least 1,700 in the USA)
This just sold for $4,758,000 cash, which was $37,000 under list. The MT was 33 days:
When comparing to the last reading there hasn’t been much change, but the May 12th numbers were quite different – the number of actives today is now 15% higher, and pendings are 16% lower.
But it had to go in that direction. The March-May period has to be the hottest stretch ever recorded:
| Town or Area | |||||||
| Cardiff | |||||||
| Carlsbad NW | |||||||
| Carlsbad SE | |||||||
| Carlsbad NE | |||||||
| Carlsbad SW | |||||||
| Carmel Valley | |||||||
| Del Mar | |||||||
| Encinitas | |||||||
| La Jolla | |||||||
| RSF | |||||||
| RSF | |||||||
| Solana Beach | |||||||
| NSDCC |
We can also track the average market times too. Any upward trends here would indicate market slowing:
We could get a nice flare-up of activity as the summer closes out, and it probably won’t be that obvious in these stats as the frenzy simmers down slowly over the next few weeks.
This just sold for $8,000,000 cash, which was $105,000 over list price. The MT was 90 days:
Our listing of a 12-unit apartment complex – closed for $3,500,000:
There will be sellers wondering if they should pack it in and wait for next year.
Why? Because the frenzy might be slightly past its peak?
One of the primary guides on when to list your home for sale is to hit the open market when there aren’t any other homes for sale around you.
Is this one of those times? Homes for sale that are 3,000sf to 6,000sf:
The recent sales around your house have never been so high-priced. Mortgage rates are still 3%. Buyers hoping to move before school starts will be anxiously awaiting the new listings over the next few weeks.
It’s an alluring combo of benefits for sellers. Once the word gets out that the frenzy has cooled, it will be difficult to recreate these market forces next year! Let’s go!
Fewer showings than in the first week of January?
Well, the market was cooking right up to Christmas and then fired up quickly again this year, which created a solid 12-month frenzy.
But now there are fewer showings than in 2019 too? How did that turn out?
You can say it was a little flat, price-wise:
Whether it’s due to ‘seasonality’, higher rates, lower inventory, blah, blah, it doesn’t matter.
The remaining buyers left have to be exhausted – losing bidding war after bidding war takes a toll, and by now people want to give up.
Welcome to Plateau City.
There will still be eye-popping sales, just not as many.
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Another data point showing the frenzy lift-off in May, 2020
Random thoughts:
Having 130 NSDCC homes in June sell for $100,000+ over list price should be an all-time record. If we had half that many, it would be astonishing!
But those were decisions made in April and May.
It feels like the market is in the deceleration stage, where fewer homes are worthy of a bidding war. Sellers and agents who insist on adding an extra 5% to 10% to their list price will need to be selling an exceptional property AND present it perfectly to generate offers.
The inferior homes/locations (the ones who really benefited during the peak frenzy) will be the ones that feel it the most. The gap between the dogs and the creampuffs will widen.
Listing agents who “have comps”, and around $5, can get a cup of coffee.
Open houses will help with the transparency. Buyers and lookers will be able to experience the upgrades in person, and get a better read on the traffic. The art of determining the difference between lookers and buyers will be renewed.
There will be eye-popping sales.
We will find peace with these higher prices. We would have gotten here eventually – it just happened faster than we ever thought possible.
Higher interest rates won’t have a big impact – there’s too much cash in play to soften the blow. One thing you can count on – sellers won’t care about higher rates. They aren’t in a hurry, they don’t have to sell, and they aren’t going to give it away!
If prices were to come down, it would be slowly and over time. There will be occasional deals that give hope to lower pricing, but then a couple of high sales will happen right behind them.
The ibuyers might be the only candidates who could influence the market in a panic, but they could rent their homes for a while if they had to. They are big corporate entities who are used to losing money, so no real pressure. The old accounting rules REQUIRED banks to sell their properties quickly, but those days are long gone.
More potential sellers will give up the thought of moving, and the number of homes for sale could stay restricted – or even go lower. The hope of there being a post-covid surge of sellers will wane.
If there were an occasional surge of new listings, they would all be priced based on recent sales…..or priced higher. If buyers don’t like today’s prices, having more inventory priced the same won’t help.
The statistics will bounce around more as we pull into Plateau City.
All of the above (except #1) should remind you of how it used to be!
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As long as there are more pendings than actives, the market is doing just fine.
Oh well – that was last week’s thought.
As you can imagine, it’s the high-end market that is loaded with actives. This week an agent commented on what a delightful experience he had showing higher-end homes in Rancho Santa Fe, where listing agents were happy to book appointments at the buyers’ convenience, didn’t go crazy about having to submit financials just to see a home, and were paying regular commissions. A few of the homes had been sitting around for months!
My guess is that most of the disappointed sellers will pack it up and wait until next year, rather than consider selling for today’s top dollar – which might be slightly less than they thought (but 10% to 30% more than it was 2-3 years ago).
How’s the action in the more reasonably-priced categories?
There are 100 active listings, and 191 pendings priced under $2,000,000 today.
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I tagged along with Kayla to her final walk-through of a 1-br condo she is selling for $592,500 – when most Manhattan condos are selling for $1M+.
