North County Coastal monitor

[Escoguy]

[quote=Coronita][quote=sdduuuude][quote=sdrealtor]… this place has been reborn the last few years with young families.[/quote]

Interesting to hear you say that. Around Carmel Valley, people are talking about the fact that enrollment is dropping at the local schools because this is NOT happening. People moved to the area with their kids back in the 2000’s and not leaving now that their kids are college aged or older.[/quote]

Is enrollment really dropping? If so, not sure why they are opening a new elementary school near PTMS and CCA.[/quote]

Poway USD is seeing drops (at least projected) and no longer has as much construction planned, this is in turn cutting years off Mello Roos. In some cases over 10 years less,

[sdduuuude]

[quote=Coronita][quote=sdduuuude][quote=sdrealtor]… this place has been reborn the last few years with young families.[/quote]

Interesting to hear you say that. Around Carmel Valley, people are talking about the fact that enrollment is dropping at the local schools because this is NOT happening. People moved to the area with their kids back in the 2000’s and not leaving now that their kids are college aged or older.[/quote]

Is enrollment really dropping? If so, not sure why they are opening a new elementary school near PTMS and CCA.[/quote]

Because they were slated to build those to support all the new development in CV Ranch. Solana Highlands, Carmel Creek, Solana Pacific are seeing smaller enrollment and are trying to change structure (i.e. which grades are at which schools) amid the reductions and it is a little messy.

[sdrealtor]

[quote=sdduuuude][quote=Coronita][quote=sdduuuude][quote=sdrealtor]… this place has been reborn the last few years with young families.[/quote]

Interesting to hear you say that. Around Carmel Valley, people are talking about the fact that enrollment is dropping at the local schools because this is NOT happening. People moved to the area with their kids back in the 2000’s and not leaving now that their kids are college aged or older.[/quote]

Is enrollment really dropping? If so, not sure why they are opening a new elementary school near PTMS and CCA.[/quote]

Because they were slated to build those to support all the new development in CV Ranch. Solana Highlands, Carmel Creek, Solana Pacific are seeing smaller enrollment and are trying to change structure (i.e. which grades are at which schools) amid the reductions and it is a little messy.[/quote]

I don’t know that it happened there but this is what kinda happened here. We all moved in the late 90s as young families when things were affordable. Prices spiked and a bunch of families took the mid 6 figure gains and moved back to their hometowns elsewhere to live in some of the nicest homes where they were from for all or mostly cash. That happened during the bubble era. With prices high young families couldn’t afford homes around us as easily and most were sold to families with high school age kids and empty nesters. With low interest rates the last decade highly paid young professionals could buy here again and came in droves. The neighborhoods are full of young kids again which has been nice. Now prices are high again and lowest rates past. I’d expect the influx of young families to slow for a while

[sdrealtor]

Sorry for late update, ran numbers but ran up to LA for a concert last night.

New listings 19 (19) – as expected last week was a lowside outlier. New listings bounced back up to normal range but not excessive at all

New Pendings of 23 (32) – pendings are pretty consistent from week to week

Thats -14

Closed sales at 17 – this is starting to show something I’ll explain later

Total houses for sale 86 (54) with median of $1.985M ($2M). Back up to where it was two weeks ago

A few things going on here. We are entering the time of year we typically see inventory rise and normal conditions would dictate about 2 more months of rising inventory though not a huge increase.

While new homes coming on the market can be roughly the same as new pendings we can and do see inventory rise for a couple reasons. First we see homes selling off market and getting entered into the MLS as pending so they dont hit the market as new listings. The other thing is we are seeing a higher fallout of escrow rate than we were seeing during the frenzy when it was so tough to get into escrow few would dare cancel. Despite the time lag between pendings and closings when we see closings consistently below the levels of pendings thats indicative of homes falling out of escrow.

I took a look at the inventory to see how sellers are reacting thus far. About 60% the inventory is on the market 3 weeks or less which is too early for a price change in most cases. If you havent see an offer in 3 weeks its generally the time to take a second look at your price.

There are 15 homes on the market for 21+ days under $2m. Of those 9 have had a price reduction mostly in homes listed by the more experienced agents. They are doing their jobs to find the market level something newer agents have no experience with.

Between $2 and 3M only 5 of 13 have reduced. I see a combination of inexperienced agents and likely ego driven sellers.

Above $3M only 3 of 12 reduced. Three things typically go on up here. These are more unique harder to value homes that get listed high and let market sort out value. Second, the market for these homes is much smaller and they always take longer. Last these often include weathier owners and/or longtime homeowners that will sell if they get their price but not if they dont.

Market as a whole is not doing anything unusual and indicative of shift away from frenzy into balance.

[matt]

I respectfully submit to the forum that we have peaked and that the 2.8m and 3.1m properties in LCO near the power lines on Lima represent the peak of this cycle. Who agrees with me?

[sdrealtor]

I agree that we appear to have peaked but reserve the right to say never mind next Spring as things have become so hard to predict. That’s a good one but there are plenty others. I sold a listing last month that made me happy for my long time client who I got the best deal anyone got in one of the nicest townhome communities here during the downturn. Then we sold it for a price record I think could stand another decade. Single mom started with basically nothing but a good job, left with 500k and a great guy a decade later. She got it coming and going.

[sdrealtor]

Just like in MM I was away last year and dont have year over year numbers here either

New listings 20 a little lighter than expected

New Pendings of 21 demand waning

Thats -1

Closed sales at 16 –

Total houses for sale 98 with median of $2.05M

(copied from MM monitor as its the same story)

This looks like it could be the beginning of a market shifting into stagnancy. The mainstream media is starting to write about this also. Demand is falling rapidly but new supply is also. We could settle in to a narrow range where volume is very low without much movement on pricing unless supply starts spiking.

https://money.yahoo.com/housing-market-h…

One thing to look for with low demand is the departure of many of my colleagues over the next couple years. Less volume, less paychecks for agents. This could and should happen regardless of what happens with pricing.

Today we saw two of the poster child brokerages for living off of public market money (Redfin and Compass) announce significant layoffs. Pricing of homes is not particuarly relevant to them. Sales volume is relevant to them and thats falling quickly.

https://www.cnbc.com/2022/06/14/real-est…

Will be interesting to watch this all and I’ll be in my front row seat throw it all. Im built for this and not going anywhere

[Pbranding]

Thanks SDR,
Are you noticing price decreases? I’m seeing a lot of it in poway/4s ranch/del sur areas.

[matt]

It’s true that anyone sitting on a 2.5% mortgage is going to very reluctantly sell, particularly in beautiful San Diego – a market that is renowned for being impossible to get back into once you leave.

Investors that have ridden the capital appreciation wave may decide to cash in at this point of the cycle. The yields will not be there for any recent buyer.

Jobs will be key as well as the stock market and crypto (huge losses). If you purchased or HELOCed anticipating major RSU income you could be in trouble. If you are in a venture capital or growth start up that isn’t making money you could be in trouble. Fiscally responsible folk with steady income and well financed homes should be just fine. Let’s see what happens with inventory as we head Into the fall.

[sdrealtor]

[quote=matt]It’s true that anyone sitting on a 2.5% mortgage is going to very reluctantly sell, particularly in beautiful San Diego – a market that is renowned for being impossible to get back into once you leave.

Investors that have ridden the capital appreciation wave may decide to cash in at this point of the cycle. The yields will not be there for any recent buyer.

Jobs will be key as well as the stock market and crypto (huge losses). If you purchased or HELOCed anticipating major RSU income you could be in trouble. If you are in a venture capital or growth start up that isn’t making money you could be in trouble. Fiscally responsible folk with steady income and well financed homes should be just fine. Let’s see what happens with inventory as we head Into the fall.[/quote]

Agree with most of this and dont really disagree with last part I just dont think that those in the last paragraph are leveraged and plentiful enough to have a material impact on the market. And if you are holding onto the house is likely one of if not your top priorrity in the majority of cases.

Again not saying we cant/wont go down I just think its gonna have to come from something else

[sdrealtor]

[quote=Pbranding]Thanks SDR,
Are you noticing price decreases? I’m seeing a lot of it in poway/4s ranch/del sur areas.[/quote]

I would say yes but with a few caveats. Some of those are shooting too high. The comps were achieved starting much lower and bid up powered by extremely low inventory. It only took one person willing and able to get that price and Ive sold some where there was only one person. No one knows where the market is and there is still plenty of demand. I think you have to start below the comps and see what the market will determine is right price now.

Lastly I think this Spring was pretty much a once in lifetime confluence of events. The last spurt never felt real to me and was more hysteria feeding on low rates. I would not be surprised to see us retrace back to the levels we started this year at not so much as a downturn but as a return to sanity.

[ncsd760]

The prices of condos/attached homes/zero lot line in the area astound me. Is it possible that the lower-end inventory — and I mean *relatively* since these units are closing in on 1mm and above in some cases — hold their ground more than the 4000sf tract homes? I can see demand for a 6 bedroom waning more than I can for a reasonable priced, low-maintenance attached home but also I’m not a realtor/broker and am just running off anecdotes.

For example, something in Summer Hill encinitas or Sea Point Tennis seems like it will be solid longer term even if we have “peaked”, no?

[evolusd]

sdr – you mentioned realtors leaving the game due to low volume. Seems folks in the mortgage industry are hurting bad, if not worse. Refi volume down 75%, purchase volume down 50%. Lots of folks in that industry will need to find other work.

[sdrealtor]

[quote=evolusd]sdr – you mentioned realtors leaving the game due to low volume. Seems folks in the mortgage industry are hurting bad, if not worse. Refi volume down 75%, purchase volume down 50%. Lots of folks in that industry will need to find other work.[/quote]

No question. They’ll go first and harder. Refi market which is usually about 70% of volume evaporated this year. It will take longer for realtors

[sdrealtor]

[quote=ncsd760]The prices of condos/attached homes/zero lot line in the area astound me. Is it possible that the lower-end inventory — and I mean *relatively* since these units are closing in on 1mm and above in some cases — hold their ground more than the 4000sf tract homes? I can see demand for a 6 bedroom waning more than I can for a reasonable priced, low-maintenance attached home but also I’m not a realtor/broker and am just running off anecdotes.

For example, something in Summer Hill encinitas or Sea Point Tennis seems like it will be solid longer term even if we have “peaked”, no?[/quote]

I think with housing prices as high as they are a lot of people who want to live around here capitulated and bought attached housing. The bigger nicer units approximate the low end single families around here. I kind of saw this happening and about seven years ago had a client sell his old Oceanside one story in Rancho Del Oro that he kept as a rental and exchange into a Summerhill rental. It worked out extraordinarily well for him

The Summerhill homes are actually as large or larger than most of the Surrounding SFRs. I’ve long had a soft spot for them. Wish i owned one. Seapoint is more condo like and a step down from them IMO and don’t enjoy that location which is a really nice middle level sfr neighborhood around here.

As an aside my first home around here was in Seagate Village. After two years as conservative as I am I was looking to move up to Summerhill as the Fieldstone homes felt out of reach to me. Then LCV came and i pushed all my cards on the table moving up 2 or 3 steps instead of one. That turned out extraordinarily well for me:)

[Author]

Posts