North County Coastal monitor

[sdrealtor]

Nah its unfolding exactly how it wound up. I always beieved(and said so numerous times here) we would give back the Spring boom very quickly as it never felt real. It was insanity driven by low rates slamming against low inventory. I figure another 10%ish next year with a Fall 2023 bottom. We’ll be fine here

BTW we wont get those down 20%ish from peak numbers until Feb or March. I also think lower priced areas will hold up a bit better

[JPJones]

The Spring 2021 boom, right? 😉

[bewildering]

[quote=JPJones]ARMAGEDDON! (I hope at least someone here gets that reference.)

https://www.cnbc.com/2022/10/13/consumer-price-index-september-2022-.html

20% by year end? Booked! Might even push that to 25% with today’s news on inflation. If we get 2 75pt rate hikes between November and December, we could see 30-35% down by y/e ’23.

This is getting weird.[/quote]

20% in real value or 20% in nominal value? If the actual price drops by 20% then the real drop is something like 28% taking inflation into account.

Even the 15% drop mentioned above is actually more like 20% considering our inflation rate over the last 6 months.

There is no reason why we have had any increase in the real value of the stock market, or housing since the beginning of COVID. COVID should have cratered the economy. Instead, the government just made up trillions of dollars. Inflation will make that ‘money’ disappear.

I’m paying >$4 for a gallon of milk.

[bewildering]

[quote=JPJones]ARMAGEDDON! (I hope at least someone here gets that reference.)

https://www.cnbc.com/2022/10/13/consumer-price-index-september-2022-.html

20% by year end? Booked! Might even push that to 25% with today’s news on inflation. If we get 2 75pt rate hikes between November and December, we could see 30-35% down by y/e ’23.

This is getting weird.[/quote]

20% in real value or 20% in nominal value? If the actual price drops by 20% then the real drop is something like 28% taking inflation into account (over the year).

Even the 15% drop mentioned above is actually more like 19% considering our inflation rate over the last 6 months.

There is no reason why we have had any increase in the real value of the stock market, or housing since the beginning of COVID. COVID should have cratered the economy. Instead, the government just made up trillions of dollars. Inflation will make that ‘money’ disappear.

I’m paying >$4 for a gallon of milk.

[an]

20% decline from crazy peak. If you’re the lucky few to sold and rented this past Spring, then you booked the gain and will reap the reward of the decline. However, for most people who didn’t sell, the nominal price is still higher than it was this time last year. So, we only wipe out the abnormal gain.

Now, if you’re a first-time home buyer who started looking a year ago, it’s a lot more expensive to buy now than it did this time last year and even spring of this year (due to rates, although haven’t run the exact numbers.

Unless rates crash back to where they were this time last year, prices would have to crash another 30-40% just to get back to the same PITI.

[JPJones]

Nominal I think. Whichever one does not account for inflation.

[sdrealtor]

Yes to all. It is nominal. Yes more with inflation but its only a few months so how much inflation was there in those months? Yes we are basically back around where we started the year so net net few are impacted

[matt]

This is an interesting transaction history. What’s going on here sdrealtor?

https://www.redfin.com/CA/Carlsbad/2901-Segovia-Way-92009/home/4083425?600390594=copy_variant&231528114=control&1778901559=variant&utm_source=ios_share&utm_medium=share&utm_nooverride=1&utm_content=link&utm_campaign=share_sheet

[sdrealtor]

[quote=matt]This is an interesting transaction history. What’s going on here sdrealtor?

https://www.redfin.com/CA/Carlsbad/2901-Segovia-Way-92009/home/4083425?600390594=copy_variant&231528114=control&1778901559=variant&utm_source=ios_share&utm_medium=share&utm_nooverride=1&utm_content=link&utm_campaign=share_sheet%5B/quote%5D

Here you go. First the house. Nothing has been done to it in 20 years, its located on a fairly busy neighborhood feeder street, has a smallish yard that is all concrete and pool. Some of this can be fixed but some cant. It took almost a year to sell in the raging 04/05 market and then about 6 months in the solid 2018 market. Its just not a great property for the model and community.

Now what happened. Owner lists house in mid-May for 2.5M (which a slight stretch that may have been possible in March/April) and quickly realizes market has changed. After lowering to 2.375M in a couple weeks they realize market has changed and sell it to Open Door.

Open Door gives them 2.5 minus their fees which nets to 2.3ish in early June. OD just values based upon size, location, pool, neighborhood comps without understanding the finer points that make it a bit of an albatross.

The market comes to crashing halt immediately after they close and now they are stuck with a relatively tough to sell house for the neighborhood with some things that can be fixed and others that cant in a declining market.

[matt]

Sounds about right

San Diego definitely one of the faster declining markets from the peak

North east seems relatively stable

[sdrealtor]

We are always on the bleeding edge of the real estate trends here in SD both up and down

[sdrealtor]

New listings 15 (15) – a little more coming on market

New Pendings of 12 (19) – and little selling

Thats +3

Closed sales at 15 (31)

Total houses for sale 98 (49) with median of $1.799M ($2.4M).

Watching the way I do sometimes I just feel things the in the data points that dont quite show up in the data.

A few things I see. New listings ticked up a touch and it was the highest count in 2 1/2 months. Pendings continue to lag.

The big drop in the median lisitng price y-o-y seems to be due to lots of high end homes coming on the market last year. In the past there was little to no market for them but now there has been the last year or two. The high end market up here is as strong or stronger than the more standard offerings.

I still believe we wont see a flood of inventory with people locked in low mortgages and having huge potential cap gains bills. However there are and will continue to be a decent amount of long time homeowners who are only too happy to take the money. There are tons of folks up here that paid 300-500K 20+ years ago for homes that hit $2 – 3M last Spring that are now back into 1.5 to 2.5M. Thats still plenty for some long timers and the excess would be taxed horribly anyway.

Again dont see a flood but do see enough coming to continue exherting downward pressure next year.

[sdrealtor]

New listings 6 (17) – less coming on market

New Pendings of 19 (14) – but more selling with lower prices

Thats -13

Closed sales at 8 (23)

Total houses for sale 93 (55) with median of $1.85M ($2.5M).

And just like that new listings evaporate again. The bigger surprise though is the big bounce back in pendings! There were tons of buyers out last Spring and many didnt get new homes. Im sure the higher rates have priced out a bunch of folks but not all. Prices are lower now, a lot lower. Im talking as much as 200-400K for some houses and that seems to be getting some folks off the sidelines.

I’ll be watching that and if it continues it will serve as more evidence that there will be enough buyers at new price levels to prevent another big leg down. Im still thinking we should see another 10% next year but also thinking that may very well be it.

On a side note spent a quick weekend back east at a high school reunion which was an amazing experience. Reconnected with lots of childhood friends that are not just incredibly succesful but also still well grounded wonderful kind people. Oh and funny too. Havent laughed so much in a while. No one cared so much what others achieved but rather that we were all generally happy, healthy and here. And then a baseball game with a legendary ending before grabbing a flight home Sunday night. So fortunate

[(former)FormerSanDiegan]

[quote=sdrealtor]And then a baseball game with a legendary ending before grabbing a flight home Sunday night. So fortunate[/quote]

That ending sucked.

[sdrealtor]

[quote=FormerSanDiegan][quote=sdrealtor]And then a baseball game with a legendary ending before grabbing a flight home Sunday night. So fortunate[/quote]

That ending sucked.[/quote]

I loved it

[Author]

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