Heading up to LA for a concert so early update. Id expect a few more to go pending in the next few hours.
New listings 17 (34) – still havent hit 20 yet
New Pendings of 25 (41) –
Thats -8
Closed sales at 21 –
Total houses for sale 27 (57) with median of $2.3M ($1.9M)
Here’s todays observation which relates to a conversation I had with a friend a few weeks ago and wrote about here. I asked a dear friend/client that retired here from Silly Valley a few years ago what a market looks like when prices get so high that incomes just cant support them like what happens up in the Bay Area and people buy with stock option money. His answer was the cost of everything goes up (Hello $70 haircuts) and people make do with smaller, more densely packed spaces (Condo is the life for me).
For that to happen we would need to have what I would consider a large scale SFR capitulation meaning folks who would typically buy an SFR would begin to shift en masse to attached homes and condos. My thought was thats gonna take some time thinking NCC buyers would head east to San Marcos and North toward Oside and Vista rather than spending close to or more than $1M for an attached home.
While I dont post it here weekly, I also track attached homes in 92009/92011 because I have a close family member whose interests are very dear to me.
This is what I saw this week when running the numbers. New listings were about double what they have been running. My first thought was uh-oh homeowners are starting to take the money and run and will soon blow past demand. Then I ran the pendings and they are more than triple what they have been running! While new listings are 30% above the prior high total this year, the pendings are double the prior high! These numbers scream large scale SFR Capitulation but its still early.
A twin home just closed for about $350K above asking. I dont think that was someone that came looking for a twin home but rather an SFR buyer that capitulated. And for it to get that high there has to be more than 2 or 3 capitulators. Its still early to call it a trend but this bears watching and following. The numbers to watch will be # of new attached listings to see if people are taking the money to run vis a vis # of attached pendings to see if SFR buyers are capitulating. I’ll keep y’all posted
