Update time and saw someUpdate time and saw some changes.
New listings basically flat. Still not seeing any mass fleeing for the exits. Pendings bumped up a good 25% higher then they had been the last 4 weeks. BUyers are coming back at all price ranges. Price reductions still at typical levels. Closed sales slipped a little which was not unexpected. Looking at those closings very few were at asking prices.
So what does it all mean?
The market is getting its mojo back. I thought closed sales numbers might be a bit higher but not a real surprise where they came in. May is gonna have lowest closed sales counts this year.
It looks like buyers used the pandemic to negotiate and nearly all did in last weeks closings. That should decrease a bit as the market normalizes but those willing to go step forward during the darkest days look to have been rewarded
We are heading into the seasonal slowdown with a head of steam and my hypothesis last week that the market will get extended is looking more likely but only time will tell.
Still seeing overly optimistic pricing higher for sellers out of the gate.
Thats all for now. See you next week.
Birthday update and saw someBirthday update and saw some more changes.
In late April the data showed an inflection point where buyers came back and pending sales increased 50%. Last week we saw another smaller inlfection point with pending sales going up 25% but now that I look back it was actually closer to 33%. That took us into this week with some steam building but where we typically see a slow down start.
The last week? New listings still flat with sellers coming on very optimistic. Closed sales flat as expected.Price reductions increased abit particularly at higher prices where asking prices were just too optimistic.
So what about pendings? Up almost 60% in my corner of the world! The market is on fire. Homes are selling at all price ranges and I saw a whole bunch over $2M. Anecdotally its not just in NCC SD. I wrote offers for clients in 92127/92129 and ran into 10 offers on multiple homes.
I think we are seeing high income renters realizing they are working from home and living an austere lifestyle in a 2/2 apartment just aint gonna cut it. With that much demand its hard to imagine this market wont be strong through the next couple months if not longer.
To Josh, Brian and the rest of the Debbie Downers get ready to party like its 1999! The heat index out there? En Fuego!
“I think we are seeing high“I think we are seeing high income renters realizing they are working from home and living an austere lifestyle in a 2/2 apartment just aint gonna cut it.”
Exactly. Same logic if they own a 2/2.
San Diego is really perfect for Silicon Valley work from home people too. It is dangerous to be too far away like Utah or something and never get any face time with the bosses.
Before Covid I went to the bay area about 10-15 times a year, and 90% of my trips were just for the day. I could leave my house at 6am, take the 7am flight, be in my Uber at 8:20, and be on location by 9, go home on one of many evening flights. And Southwest points are so easy to get and have no-cost changes and cancellations, so it is cheap to do this too.
For someone who has a more fixed schedule, Alaska has many daily flights too and their first class is nice and usually a pretty cheap upgrade, or no cost with status or points.
I worked from home for a few years, and you definitely need more space to not feel cramped. I was in OB and PB and glad I was someplace I could get out and walk around and be close to services. Location near amenities is actually more important if you’re home 22-24 hours a day than if you leave for work and can stop at places on the way there and home.
Just got off a conferenceJust got off a conference zoom call for my brokerage with a guy “financial expert/economist/market forecast” type guy. Was actually pretty good compared to most Ive heard in the last 20 years. He went over a number of things including market data for the SoCal counties and Sd is by far the hottest. We actually have more pending homes todays that this time last year. We are so inventory deprieved right now its nuts. If you see a house on the market that hasnt sold within a couple weeks the price is too high. Come 12/31 prices will be up significantly y-o-y. I’ll say at least 3 to 5%
Also for those thinking there could be a massive airbnb exit that would damage the beach areas? No way, there are plenty of buyers for those too who would love to own as a primary or second residence
Mortgage PURCHASEMortgage PURCHASE applications last week are up 18% over the same week in 2019.
(Refis are up 137% over 2019, as you’d expect with record low rates.)
First rule of modern investing: don’t fight the fed!
Update coming but Im justUpdate coming but Im just gonna drop this right here and step away while I work on it.
House in 4S Ranch listed for $1.1M with $6K mello roos on Friday. By Monday night there were 17 offers! 17….offers!! Let that settle in for a bit
Update time, ran the numbersUpdate time, ran the numbers yesterday but wanted that 17 offer situation to hang out there for day. More changes this week.
Another inflection point of sorts. New listings droped almost 40% this week and were lower than they have been since mid April when we were still in lock down mode as agents. New pendings dropped 25% over last week but still close to double May weekly numbers. We are running out of homes on the market.
Last week there were 4 more homes that went into escrow then new listings. This week there were 10 more. Inventory is declining when it should be increasing.
Closed sales up around 50% over last week as the pick up in activity since late April start showing up as closed sales.
Most active listings I see around me seem priced high. But the dropping inventory should put upward pressure on prices.
This weekend in 92127 saw two homes that were of interest. One got 17 offers and the other 6 offers.
You think its hot outside today? The market for single family homes still En Fuego! See ya next week…
And here’s one for the conspiracy department. All SD Donovan’s locations now closed. Bets made here during the downturn werent even close. Me spot on. Other person dead wrong. Winning bets never settled and now cant be
Appreciate the frequentsd
Appreciate the frequent comments. I’m the long term buyer with 5 rentals plus my own home. bought in 2000, 2003 (1) then 2013 (3) 2014 (1).
91217, 92078, 92027 SFH mostly 4 BR, 1 3BR
The market has been fantastic and having high quality tenants has worked out very well.
We were pulled into a couple of bidding wars in March. Won one in 92127 4BR 820K but the seller couldn’t find a new home so they cancelled. On another in 92127, there were 65 visitors. List was 715K for 3BR we bid up to 740K but others went in for 750, in some ways we still won as we have the same model down the street but would have been nice to have a second. Was stunning to see the demand for 92127. Even 92027 (nicer areas) has remarkably low inventory.
My younger friends who trade stocks are stating to see the relative stability of real estate. They also want in. One works for a bank and can get better financing conditions than I’ve seen anywhere. My average cost of financing is 2.9% and he is much better.
Needless to say, hard to see things turning. But I’m keeping some powder dry just in case.
Congrats and glad to seeCongrats and glad to see someone is reading them:)
Great work on the rentals! I think some people dont consider how much extra value you get with them being local as opposed to going out of state. Locally you can self manage and avoid management fees while living a place you love. There is also value in the higher quality tenants and steady demand you find here. The headaches of dealing with less than stellar tenants in cheap rentals can reek havoc on one’s Zen. Namaste Escoguy 😉
Update time, and what wasUpdate time, and what was most interesting to me is what isnt changing.
New listings popped back up just below what they were two weeks ago which is good news. Pendings did too! Once again there were 4 more homes that went into escrow then new listings. This week there were 10 more.
So what isnt changing? Inventory is still declining when it should be increasing. We are still running out of homes on the market. This is the 3rd straight week of falling inventory.
Closed sales up around same as last week as were price reductions.
Half the inventory in Encinitas and South Carlsbad is listed at or above $1.5M. Only 15% is under $1M. The price gap between here and Carmel Valley seems to be shrinking a bit. So long sleepy affordable beach towns! Market es muy caliente!
See ya next week…
Fed can print dollars andFed can print dollars and drive mortgage rates down to 2%. Companies can switch from buybacks to stock offerings.
Nice homes in San Diego are not so easily created.
We debate here every year whether local RE is under or over valued. Not much about how to catch the next bubble.
Agree. SD is very built outAgree. SD is very built out and unless there are drastic zoning changes we are unlikely to see large scale development in core areas. Im sitting in a prime coastal neighborhood in a home I bought 20 years ago that has tripled in value, has plenty of room to build an ADU out back if I decide to and Im 7 years into a 30 year mortgage at 3.125% with a LTV under 30%. Loans for the self employed are a nightmare still so not that motivated to refi a smallish loan but If I can get a 20 year at 2.75% or lower Id do that. Not sure Id commit to 15 year unless under 2.5% at this point as I dont want to be locked into larger payments with minimal benefit. Also have a massive unused HELOC at my disposal. Life is good and the livin’ is easy for many of us here
gzz wrote:Fed can print[quote=gzz]Fed can print dollars and drive mortgage rates down to 2%. Companies can switch from buybacks to stock offerings.
We debate here every year whether local RE is under or over valued. Not much about how to catch the next bubble.[/quote]
I dont think its that hard. Buy a primary if it makes long term sense from a personal and financial perspective. Buy investment properties when the numbers make sense.
Mortgage *purchase*Mortgage *purchase* applications up 9% versus last year!
Typo? Too good to be true?
As bad as the job losses have been, 75% were in the below $50k range, and most of these are getting boosted unemployment higher than their old wage.
SD summer tourism may get a boost as the 25 million people who live in greater LA plus Arizona stick to driving vacations this summer.
for now it’s looking like thefor now it’s looking like the worst case scenario will not come to pass and that any declines would be modest. I don’t know that it’ll be a record-breaking crazy summer crowd but I do believe it will be enough to keep us on track and get us back to normal next year.
sdrealtor wrote:for now it’s[quote=sdrealtor]for now it’s looking like the worst case scenario will not come to pass and that any declines would be modest. I don’t know that it’ll be a record-breaking crazy summer crowd but I do believe it will be enough to keep us on track and get us back to normal next year.[/quote]
You know I am beginning to believe that adage about how it’s always a good time to buy real estate : )
outtamojo wrote:sdrealtor[quote=outtamojo][quote=sdrealtor]for now it’s looking like the worst case scenario will not come to pass and that any declines would be modest. I don’t know that it’ll be a record-breaking crazy summer crowd but I do believe it will be enough to keep us on track and get us back to normal next year.[/quote]
You know I am beginning to believe that adage about how it’s always a good time to buy real estate : )[/quote]
That would make one of us:)
What I have learned is when it seems to make the least sense to buy real estate it can often be the best time to do so
Preview for tomrrows post:Preview for tomrrows post: numbers keep improving. Anecdotally clients submitted an offer on a property and there are already 8 offers on it.