North County Coastal monitor

[sdrealtor]

To a large degree it has been on the coast with prop 13 for a long time

[The-Shoveler]

[quote=sdrealtor]To a large degree it has been on the coast with prop 13 for a long time[/quote]

About 30 years ago an older friend told me after buying my first house, “never sell”.

I wish I still owned that first house.

[sdrealtor]

Time to work on catching up. Ive been collecting data and in my mind writing the update as to what I was thinking at the time. But now I think that could be tough to follow and not important. Whats most is important is what is happening.

When we left off the market was really slow on both sides. There were few new sellers and even fewer buyers. Inventory was falling as it does toward the end of each year as sellers take em off for the holidays.

I have long hypothesized that the golden handcuffs of a low rate mortgage would limit the flow of inventory. I also thought that demand would stay very muted enough. I expected prices to keep falling albeit at a much slower pace than the second half of last year.

Alot has stayed the same but some things have definitely changed. Working on getting the data together for you all.

[sdrealtor]

x

• This reply was modified 1 year, 2 months ago by sdrealtor.
• This reply was modified 1 year, 2 months ago by sdrealtor.

[sdrealtor]

Slight change of format for the catch up. First new listings by week as compared to last year.

New Listings Week ended:

Jan 10th 6 (6)
Jan 17th 8 (17)
Jan 24th 8 (10)
Jan 31st 9 (12)

4 week total 31 (45)

Thats a a very big drop over what was anemic data last year. Last year prices exploded with few listings and huge demand and this year new supply is far less. If there was any doubt there would be a seller’s strike that has been answered.

Unless demand falls off a cliff forget about falling prices this Spring!

Anecdotally I’ll add the new listings skew heavily to people leaving the area, people aging out of very long time homes and high end homes. New listings of nice regular homes up here are pretty non-existent.

Now lets look at the demand side:

New Pendings Week ended:

Jan 10th 6 (5)
Jan 17th 13 (13)
Jan 24th 13 (23)
Jan 31st 18 (16)

4 week total 50 (57)

Thats not much of a drop off. There is defintely more to buy this year than last so that explains some of it. But rates have come back down and prices are down since last year by a decent amount.

Demand has NOT fallen off a cliff. Not only dont I expect to see prices keep falling I think we are gonna see them take back some of those second half losses! Buyers are back! This is a bit of surprise. And maybe more than a bit

Here are a couple anecdotes. A friend/past client called me about a relative that had been renting in my hood after relocating a couple years ago from Bay Area. The friend/client was nicknamed Dr Doom by our friends and was as bearish as anyone ever was on this site back in the day. Relative had opportunity to buy direct from neighbor a couple doors down from long time owner. My friend told his relative he thought it was probably ok at that price but he should talk to me first. I was surprised my friend wasnt expecting doom. When I heard the price I said that is probably a good 10% below the market in Fall and what I expect prices to be end of year. Its the perfect house for everything they want and would attract lots of attention even in a bad market. He said the seller wanted to stay a few months and close this Summer. My advice was I thought this Fall would be at or near bottom so safe to buy now. But I insisted he should close asap! If it went longer something could happen to get seller to change mind so better to close asap and work out deal for seller to stay a few months and that is what he did. The seller had an agent who would be handling everything so i was just advising the relative.

A week later a house not as nice listed for $300K more than his contract price. It sold in a few days with 3 Bay Area families bidding for it. My friends relative is gonna close with $300 to 400K of extra equity. Nice win for them and seller has no out. However, seller has over $500K taxable gain so additional purchase price would be heavily taxed. Im sure they arent happy but they will be fine. Call it a win!

The property I am interested in buying would be all or mostly cash. It would require liquidating a large amount of my equity holdings. Its a very special/unique property that meets some future needs to a tee. It is also an opportunity to leave a family real estate legacy beyond my years here. As conservative as I am I was still unsure. Last week I met with my long time (30+ years) very conservative financial advisor. I told him my plans and explained my thinking. Then I said OK talk me out of this crazy idea! I about fell over when he loved the idea. He said I should do it but postpone my ADU plan as I could do that anytime and I now realize he is right. He’s gonna help figure out the optimal mix of leverage while balancing tax repurcussions. Im pretty much all in on the idea. Who would’ve thought it?

[sdrealtor]

One additional piece of data to complete the picture which is active inventory by week compared to last year. I have 2 years back here also so including that as well

Jan 10th 63 (21) (52)
Jan 17th 58 (29) (51)
Jan 24th 55 (21) (50)
Jan 31st 56 (24) (48)

This time last year inventory was extraordinarily low but it was trending higher. We dont have nearly as low levels so I dont expect a price explosion but as seen above demand is starting to exceed supply and inventory is trending slightly down. The situation looks very much like it did two years ago. I dont have pre-pandemic numbers but I know they are about 50% higher than where we are now.

Net – net is inventory is still very constrained and while we are in a very balanced market the pricing pressure should be ever so sliughtly to the upside. I think things will get tougher come Summer and that Fall will be the buying window for those so inclined to catch most of whatever decline we will see in this compressed cycle

[sdrealtor]

Back to the old format but please read the catch up posts first if you have not already done so.

New listings 8 (7) –

New Pendings of 15 (12) –

Thats -7

Closed sales at 12 (10)

Total houses for sale 55 (26) with median of $2.195M ($2.585M). Two years ago there were 44 on the market

We are six weeks into the year and have yet to reach double digit new listings. Last week we had them 3 of the first 6 weeks. We have had double digit pending counts 4 weeks in a row. Inventory continues to trend flat to lower. Buyers while not willing to bid homes far above asking are showing up in droves and buying especially the turn key homes.

None of this is conducive to falling home prices. WE will continue to see data showing falling prices but that is still data that needs to catch up with reality. It wont be until May or June that we start seeing published data reflecting what is going on now.

[Pbranding]

Thanks for the update Sdr. For Rich, on the older site we use to be able to view posts most recent first, is it possible to do that again? Otherwise for really long going posts like this one we have to scroll down really far and it keeps refreshing to the top, which is quite frustrating.

[Rich Toscano]

Not that I know of. But on a desktop, you can click command-down arrow (Mac) or ctrl-down arrow (PC) and that will bring you to the bottom of the page.

[Rich Toscano]

PS I will look into this, it seems like something you should be able to do.

[sdrealtor]

Update time. If the Mira Mesa update showed strength this one is downright terrifying. This is Super Bowl week which used to kick off the selling season. If we dont see a big uptick in listing inventory this week we are going back up in prices

New listings 5 (12) – here we are a month and 1/2 into the year and not only arent we getting more we get the lowest number this year

New Pendings of 15 (18) – demand is starting to amp up

Thats -10

Closed sales at 7 (8)

Total houses for sale 47 (24) with median of $2.2M ($2.4M). Two years ago there were 52 on the market

Inventory dropped a good amount this week. We had 5 houses listed and 3 were 50+ year old homes in need of redo or tear down. Recent buyers, as in the last couple decaders are staying put!

This is now conducive to rising home prices. We need inventory and we need it now to keep things in check

• This reply was modified 1 year, 2 months ago by sdrealtor.

[sdrealtor]

Quiet Sunday so I did some playing around. My community is large with more than 1000 homes. I looked back 20 years how many homes were listed each Winter between November 1st and Today (February 19th). The community is about 25 years old.

Back in the first several years there were alot more folks that moved up or away as we had a nice appreciation of about 50% the first 4 or 5 years.

Over that period from 11/1 to 2/19:

There would be 20 to 30 listed the first several years

During the bubble it was usually between 15 and 20

During the bubble burst it was around 15/year (many distressed sales)

Over the last decade there have been 1 or 2 higher or lower counts but for the most part it has consistently been 8 to 12 homes listed.

Since November 1st of last year there have been 2 homes listed for sale. One just closed and the other took it off the market after a month. Maybe they try again later maybe not.

The one that sold had 3 Bay Area families fighting for it. It closed 10% over asking and within 10% of last Spring peak. In the Fall it would have likely sold as much as 10% below asking. How quickly things can change and how much low supply can impact pricing.

The total sales on the MLS from 2012 through 2022 (full years) was 469 homes (some of which are repeat sales).

Thats about 47/year.

I think we should get into the teens but its possible that there will be under 10 sales this year.

• This reply was modified 1 year, 2 months ago by sdrealtor.
• This reply was modified 1 year, 2 months ago by sdrealtor.

[sdrealtor]

New listings 13 (12) – finally a number more in line with what we should be getting

New Pendings of 11 (15) – demand is steady

Thats +2

Closed sales at 10 (19)

Total houses for sale 52 (25) with median of $2.2M ($2.35M). Two years ago there were 49 on the market with a median around $2M. It feels like we are back around 2021 and could settle there

Looking at what is coming on the market the lowest priced sfr was $1.65M. Most of what is coming on is skewed to higher end.

Prices feel higher than Fall but not running either direction. The good ones attract attention from the strongest buyers. Its a tough market for those in the lower half of the market with not many entry level to first move up homes hitting the market. People staying put

• This reply was modified 1 year, 2 months ago by sdrealtor.
• This reply was modified 1 year, 2 months ago by sdrealtor.

[sdrealtor]

Here we sit heading into what should be peak season. We’ve got 6 houses here for sale below $1.5M and 8 houses here at $5M+. Dunno?

[Pierredelecto]

New to posting but have been following this forum for a year or so. Was planning to move to SD before I had to delay it for personal reasons last fall, hoping to try again in the next few years.

Before we decided not to move we saw some houses in the fall and all the realtors said we could bid 100-200k under asking and have the offers accepted. They were probably right because most of those places stayed on the market for the whole winter. Fast forward to today, though, and all of those houses are under contract or sold without any price decreases and places still seem to be moving at about the same prices, now just with a 7% interest rate.

So I don’t believe the doom and gloom in the press about a housing collapse, people leaving the area, etc because the supply is so low that prices are not going to fall. I know most of you here are already property owners but man, as an outsider it looks almost impossible to break into the market even with a really good salary.

[Author]

Posts