The blip in active listings over the last week isn’t too concerning and could just be from the weather.
The count of active listings is a good indicator of the demand though. During the mega-frenzy conditions from late-2020 through early-2022, you can see that the new listings were being gobbled up as quickly as they came on the market, and there was no build-up of the supply. Last year, the demand was hot enough in the early months that the active-listing counts were fairly flat too.
If this year’s count of active listings surges above 400, it will mean that we are exiting the frenzy days, and the market’s normalization is underway.
It is subject to the overall number of listings, and I’ll reuse yesterday’s chart to show the flow:
NSDCC Listings and Sales, Jan 1 – Feb 15
The total number of listings in 2024 is still in the frenzy range.
It’s the number of active listings that help demonstrate the velocity of the demand. Are they being gobbled up as fast as they hit the market like in recent years, leaving the number of actives fairly steady? Or are the actives starting to pile up, like they used to do? (see the 2019 green line in graph at top)
This is how we will know where the Spring Selling Season is going.
Buyers already have reason to be cautious and wait patiently because Powell opened his big yap and said he was going to lower his rate THREE times in 2024.
If the active listings break out of the frenzy range and start stacking up unsold, it will be irresistible for buyers to wait longer to see if sellers capitulate on price, while hoping rates might come down too.
Want to know where the market is going? Just watch the number/trend of the active listings!
On Monday morning, these were the counts of active and pending listings between La Jolla and Carlsbad:
Actives: 312
Pendings: 149
This morning, the counts are:
Actives: 286 (-26)
Pendings: 164 (+15)
These are pre-Super Bowl numbers and it’s been pouring rain for a week!
What’s going to happen once we get into the more-traditional selling season of March, April, and May?
These blog posts are uploaded onto my LinkedIn page, and it was there yesterday that Carl asked what my crystal ball said about pricing this year.
It’s going to keep going up!
The houses that aren’t well presented and are sloppy on price are going to sit. But those that have something special about them, and/or are presented well and have an attractive price are going to find a buyer in the first week or two.
NSDCC Supporting Data:
2023 Median List Price: $2,199,000
2023 Median Sales Price: $2,157,500
January, 2024 Median List Price: $2,200,000
January, 2024 Median Sales Price: $2,275,000
The median list price of today’s 164 pendings: $2,499,950
Some buyers are getting deals, mostly on the scratch-and-dent homes where sellers and listing agents didn’t do much, if anything, to prepare the home for sale. But look at the January median sales price – it’s higher than the median list price!
Here we go again!
We are already on our way to a +10% increase in pricing – and it’s only the first week of February!
One house doesn’t speak for the whole market but it sure felt like it was already peak selling season this weekend. We had 160+ people attend, received eight offers so far, and it’s already $100,000+ over list:
La Costa Valley (1,073 single-family homes) Annual Sales:
The new rule about getting profits tax-free went into effect in 1997, and it motivated people to move! The sales history of this house is an example of how it used to be – make a little money and be on your way:
But over the last 10-12 years, people stopped moving so much. Any of the original LCV homeowners were already empty-nesting, so it wasn’t the kids that kept them from moving. Rates were coming down a bit, and refinancing made it a little more affordable – and there wasn’t anywhere else to move locally that was better than what they had already.
Some may have thought that the 2007 buyer got left holding the bag. But he’s now listed for $2,085,000!
The NSDCC listings inputted between January 1-15 are up 11% YoY:
2023: 100
2024: 111
Take last January’s total of 205 listings + 11% = 228 for the projected winning score, which would blow by everyone. How close the monthly total gets to 228 will tell us if listings are surging or calming as the spring selling season opens. Here are the guesses of the number of January listings – winner getsPadres tickets:
Contest to Guess the Total Number of NSDCC January Listings
Yesterday, we attended Gov’s annual update on new laws and forms for 2024.
He touched on many topics – including that landlords in California might be agreeing to tenants for life because it’s so hard legally to get rid of them – but the most interesting was his comments on the realtor lawsuits and commissions for the buyer-agents.
To demonstrate the difficulty of coming up with a viable solution, the best the California Association of Realtors can do is to add paragraph G3 into the purchase contract (above) and hope the buyer’s agent already has a written agreement for the buyer to pay the commission. At least paragraph G3 will pass the responsibility of paying the buyer-agent commission along to the seller so the buyer doesn’t have to pay it, but in a multiple-offer situation, all it will do is send your offer to the back of the line.
When in a bidding war, buyer-agents will be forced to omit paragraph G3 and saddle the buyer with the commission payment instead.
What’s worse is that the federal judge presiding over the successful realtor lawsuit will be deciding in May whether or not to make it a national law that PREVENTS the seller from paying the buyer-agent’s commission altogether, or let the current commission structure ride until the appeals process is complete.
It appears that the buyers will be paying their agent’s commission, sooner or later.
In an interesting twist, Gov was describing how the best solution for evicting a tenant is to bribe them with cash-for-keys and we even have a form for it now. But bribing a buyer-agent is completely out of line? A home seller should have the ability to pay the buyer-agent commission if they see fit.
The total number of December sales is up to 86, and there’s a chance it might get to 100 but it will probably take another month before all the late-reporters check in. But we saw that 12 buyers were willing to pay $100,000+ over list , and the 34% is a nice pop for what should have been a very quiet December!
NSDCC Average and Median Prices by Month
The lousy way we measure pricing makes it look softer than it has been over the last few months, but compared to last December, it’s virtually identical. Chalk it up to cheaper houses selling in December!
There were 50 new listings in the first seven days of last year.
This year, there have been 43 new listings in the first week, but there are late-reporters and those agents who input a new listing later in the month but use the contract date from weeks earlier. It’s not a smart move due to a glitch in the MLS which uses the contract date, not the actual days on the market, when other agents are searching for listings from the last seven days, etc. causing them to miss new listings.
Based on both reasons, the final total for the first seven days will probably be 60-ish, which means we’re off to a good start for those of us who are hoping for additional inventory!
Here are the guesses for the total number of January, 2024 listings submitted so far on the contest for Padres tickets (last January’s total was 205). You are welcome to add or revise your guess in the comment section up to January 15th:
Contest to Guess the Total Number of NSDCC January Listings
142 Anne M
157 Skip
160 doughboy
170 Dale
174 SurfRider
176 LifeIsRadInCbad
180 Kingside
188 Stephanie R.
189 Chris
190 Tom
192 Sara G.
200 Curtis
208 Rob Dawg
210 Bode
213 Shadash
217 Nick
222 Majeed
223 Joe
The market has fired up quickly – there were lots of people at open houses over the weekend and a new listing that interested my buyers already had three offers on it since hitting the market last week. Interestingly, I went by three hot new listings that were NOT doing open house. Get Good Help!
There have only been 83 NSDCC sales recorded in December, 2023, which means we may not make it to 100 closings. January isn’t looking too good either, and from what I can find, we’ve never had less than 100 monthly sales, let alone in back-to-back months. But it’s coming.
It puts the squeeze on everyone.
Buyers lose faith that there will be more homes to consider and end up jumping at one. Sellers either think they can get away with any price and tack on an extra 5% to 10% over the comps from 2021….or they give up altogether and decide to wait until the market “gets better”.
Even with a little extra inventory, the market is going to look and feel uncertain. Is it going up or down?
When we are having the fewest sales ever, the the evidence is thin, and the results vary!
NSDCC December Sales Under $4,000,000:
Number of sales that closed for $100,000+OVER their list price: 12
Number of sales that closed for $100,000+UNDER their list price: 17
