This is what a surge in listings looks like.
We won’t see a hundred new listings hit the market in one day….it will be two here, three there, four over here, etc. and pretty soon the buyers will think about stepping back to see where it might go.
If rates can slip into the high-5s by next month, the early-2024 market will be on fire….
Survey-based rate indices haven’t yet had time to account for the massive drop in mortgage rates this week, but rest assured, it was special. That’s no surprise if you saw our coverage yesterday, which pointed out that it was the biggest drop in a 45 day window that we’ve ever measured.
When rates drop that much, that quickly, there’s always some risk that we’ll see a corrective bounce. Sometimes such corrections only erase a small amount of the improvement over a day or two. Other times they can be the start of weeks of gradual increases. Either way, we usually have some indication of that resistance within a few days of the final crescendo.
This time, however, the mortgage rate drop is sticking the landing. Wednesday and Thursday were the big movement days and now today has seen almost no movement at all. The average lender is effectively right in line with yesterday afternoon’s latest levels.
While this turn of events can’t predict the future, it is a more reassuring set-up for the days and weeks ahead. Speaking of weeks, we probably won’t know what the next leg of this journey truly looks like until the 2nd week of January after the next Consumer Price Index (CPI) comes out.
https://www.mortgagenewsdaily.com/markets/mortgage-rates-12152023
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The big difference between last year and now is that the 2023 pricing has been on a slow steady climb, instead of the tumult caused last year by the sudden upward shift in mortgage rates.
San Diego is leading all the higher-end luxury markets for YTD pricing!
Another comparison where it counts – on the higher-end, where active (unsold) listings are sure to pile up quickly in a soft market. But not yet, and if we’ve made it through this stretch, then the future market with lower rates should survive ok too:
Our vacant-land listing went pending today too!
This may be the only time we ever tour a house at this price point!
The highest-priced La Jolla residential sale ever was $24,700,000 (8466 El Paseo Grande) in 2020.
Now there are three for sale in the $30,000,000s!
Yesterday, Jay Powell shocked the world by declaring three rate cuts in 2024! It was Fed speak of the most unusual order – open and transparent, instead of the opaque mumbling of previous chairmen.
The predictions are for rate cuts early in 2024 too. The CNBC survey showed a 90% probability of a rate cut at the Fed’s March meeting, and 100% chance at the May meeting. This Fedwatch Tool below thinks they will all be in the first half of 2024:
What does it mean for the 2024 Spring Selling Season?
Real estate prognostications are usually wild guesses without any supporting data. But next year looks more predictable than ever – and we’ll be able to track it closely.
Let’s consider how 2023 played out:
In June, I mentioned that 2023 got off to a very fast start, and that March would have the highest sales count of the year – which means buyers and sellers were active in January and February!
We had a mid-summer surge too, and the August sales beat out those in March by a nose.
Because the price points are so much higher these days, every property is a luxury home that appeals to the affluent. It means the homes for sale need to be spruced up more than ever, which takes planning and preparation for weeks and months.
We already know that our team will be listing homes for sale on January 18th and 25th, and there should be many more others doing the same. With the 2023 inventory being so bleak, the pent-up buyers will be noting the lower mortgage rates and be on the prowl early.
We will do our annual January inventory contest to give everyone a feel for how the number of homes for sale is breaking early in 2024. Between the number of January listings and the results of our listings, you’ll have quality data on how the 2024 market is unfolding!
My guess is that there will be 10% more listings in January, and combining that with lower mortgage rates could set off a mini-frenzy!
Pricing was steady this year, and it should bump around by the same +/-5% in 2024. It’s probably not worth it to try to predict your purchase or sale by the price history – it will bounce around just because the metric is flawed.
About 50 years ago, a quartet of L.A. session musicians became so synonymous with the era-defining soft-rock scene — headlined by James Taylor, Carole King, Jackson Browne, Linda Ronstadt, Crosby, Stills & Nash and Fleetwood Mac among others — that they were dubbed the Mellow Mafia.
Danny Kortchmar (guitar), Russ Kunkel (drums), Leland Sklar (bass) and Waddy Wachtel (guitar) made their way to Los Angeles through various sliding doors. By the early ’70s, they frequented the same studios, worked with the same engineers and played the same sessions. Championed by the English producer Peter Asher, the four became in-demand separately and in different configurations for their technical capabilities, inventiveness and gift for bringing live sound to the studio.
In 1971, Kortchmar and Kunkel appeared on King’s bestselling, Grammy-winning “Tapestry” and were joined by Sklar on Taylor’s “Mud Slide Slim and the Blue Horizon.” Two years later, Wachtel played on Stevie Nicks and Lindsey Buckingham’s debut, “Buckingham Nicks,” and Wachtel and Kunkel helped shape Nicks’ 1981 solo debut, “Bella Donna.” All four have joined Ronstadt, Browne and Taylor on tour. And that’s just the tip of the iceberg: Individually and together, they’ve appeared on about 5,000 albums.
A new documentary about the group, “The Immediate Family,” will premiere Tuesday at Laemmle NoHo and debut in theaters and on streaming platforms Friday. Directed by Denny Tedesco (who made “The Wrecking Crew!,” about an earlier generation of renowned session musicians), the film chronicles the foursome’s decades-long work with musical icons through original interviews and archival footage. It’s named after the group’s current band with fifth member Steve Postell, which is set to release a new album, “Skin in the Game,” in February.
“We’ve been around such amazing people for so long that we’re sort of used to the attention, observing it and being a part of it,” Sklar explains of the film. “But seeing the movie is sort of a strange reality. We realize, ‘Oh my God, this is actually just about us. Wild.’ ”
One of the 13 songs featured in the article – I was at this show:
Rob Dawg noted that the year-over-year comparisons are worth a look, now that the super-frenzy days are over. Sure enough, this month looks a lot like last December!
La Jolla is going strong, Rancho Santa Fe is back to the priced-to-sit program they made famous, and the 3 mid-range areas (in purple) have total actives/pendings of 80/45 compared to 99/44 last year.
All signs are pointing to next year being similar….unless there is a surge of inventory.
I wonder how many realtors can say they have been producing 1-2 real estate YouTube videos per week since 2006? Mine don’t go viral because I try to keep them educational in nature.
It reminds me of the time when two Hollywood big-shots called me to discuss a TV show. They wanted to send writers down to fabricate some entertaining story lines. But when I told them I was only interested in keeping it educational, they said they would get back to me.
I’m still waiting for their call!
Thanks for watching – I appreciate you being here!
Here is a link to my channel, and what I said in June about the rest of 2023:
Obviously, this year isn’t over but it’s close – and we’ll be lucky to hit 1,800 sales this year (there have been 22 sales closed in December so far).
The identical Sales/Listings percentage over the last two years includes a blazing hot first half of 2022 so the demand has been steady-hot, but there just isn’t the inventory like we used to have.
Pricing?
The median LIST price in 2022 and 2023 was the same $2,199,000 each year. In 2022, people preferred to pay over list, and this year…..not so much!
No evidence yet of a possible surge in inventory next year:
