[quote=DaCounselor][quote=sdrealtor]DaCounselor asked if that house was the Canary in the Coal mine. I dont think it was but rather this weeks update could be.
New listings 32 (21) – a nice leap up to where we should be. Surprised it took so long to hit 30 in a week. Much more than we have been getting but in line with what we should be getting.
New Pendings of 13 (32) – this is a very low number and potentially the proverbial canary in the coal mine. Outside of early pandemic lockdown, holiday shutdown the lowest number Ive seen in over 2 years and this should be peak selling. More commentary below to follow
Thats +19!
Closed sales at 25 –
Total houses for sale 83 (73) with median of $2.1M ($1.85M)
Inventory is up 50% from last week. Like i have been reading in places like Calculated Risk its increasing everywhere not so much because of more supply but dimished demand.
Looking at the inventory there are great houses in every price range in lots of great neighborhoods. Maybe there are still multple offers to settle on some but still this number seems way low. We are finally positive year over year on inventory. Lets see what next week and the week after bring. With the inventory we have there should be pendings in the high 20’s if not 30’s this time of year. If not inventory will continue to grow even with limited new offerings.
Then the question is what next? Do sellers dig in their heels or reduce expectations? DaCounselor we may have our canary but then what next?[/quote]
Plus 19, wow. I looked at your numbers from this time last year and we were minus 11 for the 3rd week of May. Lots of minuses over the past few years overall, seems like more evidence of the winds of change you felt last month.
Yeah the Jacaranda listing is one data point in a sea of data, just find it interesting that it’s on its second price reduction (today) and down to the price of the sale of that floorplan in August ’21. So no bidding war, or even an offer? Agree that the time to sell that house at peak has probably passed.
What next? I’ve been bullish long-term big picture on SD for 30 years, with some specific bearish periods mixed in. Let’s just say my mood right now has more in common with a Grizzly than an Angus.[/quote]
Yes that was a big change and the last time we saw a number like +19 was in May 2020 as we emerged from the lockdown with pent up supply. The difference it was mid 40’s new listings (supply driven) and mid twenties pendings. Now we are getting more typical supply but lowered demand (lower demand driven)
The Jacaranda listing i put no weight on. I rarely would point to a single sale as there are so many things that could impair a sale. That one has a tough location, is offering below market compensation to agents, shows poorly, has poor photos, is a wonky floorplan (4BR in 1600 sq ft and only 2 bath just aint right) and small lot. Its a complete gut and remodel with no payoff for doing one without a good floorplan, lot or location.
As for whats next? I still beleive supply will stay modest with folks locked in because of low real estate taxes they cant move (under 55 years old), potential massive capital gain tax bills and fixed rate mortgages under 3%. I fit into 2 of those in a big way.
We have seen an entirely new class of resident here with homes regularly selling in the 3 to 8M range. Prior to 2 years it was nearly unheard of to see something sell above $2M. Maybe some of the low $3M sales would be $2M then but the ones above that didnt happen and there have been a bunch. In the last 24 months there have been 168 sales close above 3M. Thats more than the entire history of the MLS prior to that going back another 25 years or so.
The genie is out of the bottle here and not going back in. I remain very bullish long term here. I will acknowledge we are due for flatsville or some giveback on the more outrageous sales above list prices.
To put some numbers on it I’ll use mine which was about 1.15M pre-pandemic and now above $2M. I could see things staying relatively flat (say within 10%) here if there is a seller strike. I fully expect that there could be sales that would be place it more in 1.7 to 1.8 range (my most likely scenario sometime in the next 2 to 4 years). I could see a doomsday scenario taking it back to 1.5Mish . But no way its going back to 1.15M. That horse left the building and aint coming back.
Personally a bit of a downturn would be better for my business and allow me to complete the building project I want to easier and less expensively.
Its funny because last weekend I had a bunch of friends over for a wine dinner/birthday party. One of my friends is old friends with Pigg Poster Barnaby who joined us for the gala. Not much real estate talk but one thing we did get into was his insistence that all real estate here was purchased speculatively. I do not beleive that and know it to be untrue based upon dealing with countless folks like myself. My house is my home. I did not buy it to make money but rather to have safe and stable place for my family to live. While I enjoy its current FMV it means little to me and nothing in my life would change if it went up to $3m or down to $500K. Its my home and thats all
