Here are comments left by listing agents in the MLS confidential remarks over the last month – some are scoldings!
No Showings until Open House, Then use showing time. Seller will only show WED/ SAT MUST USE SHOWING TIME!!! Must have a Pre qual To Enter Per seller Instructions.
Directions to property: 33.149132252579626, -117.31781391389755
All other showings after the open house to be requested via docusign.
Text agent, wait for conformation, then go. Sentri only. If you do not have Supra, agent to accompany. No one-day codes.
No shoes allowed in the home NO EXCEPTIONS., I will provide house slippers. This home has many ” breakable items” Please hold the children’s hands, this is not a place for children to play.
Credit toward garbage disposal.
Back on market as buyer past away.
Multiple offers well over asking. No more showings.
**MULTIPLE OFFERS NO MORE SHOWINGS AT THIS TIME**
NO MORE OFFERS WILL BE ACCEPTED **NO EXCEPTIONS**
Will show in till April 28 (published on May 4).
Call agent if buyer is interested.
Motorcycle helmet and jacket rack does NOT convey.
DO NOT DISTURB OCCUPANTS! DO NOT GO TO FRONT DOOR! House will not be shown until it is Active on the MLS.
AGENTS PLEASE READ!! NO MORE SHOWINGS AT THIS TIME.
Please do not call. Vacant lock box. Do Not use Showing Time. I do not support Zillow and will not take their call. ***AGENTS*** We are in deep negotiation with offers from investors.
Booties/Shoe coverings mandatory.
DO NOT ADD ME AS A RECEIVER OF THE DOCUSIGN FILE. Offer submission instructions must be followed.
Please use GPS or you might get lost.
PLEASE DO NOT CONTACT ME FOR OPEN HOUSES.
Sold before going into computer.
SELLER RESERVES THE RIGHT TO REFUSE ANY AND ALL OFFERS.
BUYER AGENT FORFEITED COMMISSION OF 2.5%
WELCOME to your Home!
Do not contact listing agent for appointments.
NOTE: SALE WENT PENDING PRIOR TO INPUT ON MLS. *CALL LISTING AGENTS FOR MORE INFO. THIS IS A STANDARD REGULAR SALE.
Ten minutes after I left the open house on Sunday, I received a call from an officer at the Carlsbad Police. Someone reported bones in the backyard, and he was investigating whether they were human or animal bones because it was suggested that someone might have been murdered.
He called back later to say that the coroner identified a photo as animal bones, and the seller confirmed that his mom would occasionally leave a soup bone in the yard for the neighborhood cats.
My question? Why didn’t the person who called the police ask me about it first?
Could it have been a deliberate attempt to derail the sale? It was hotly contested – we received five offers!
I disagreed with the expert opinions yesterday. What are they missing?
My thoughts:
We cannot apply any previous assumptions or beliefs about real estate sales to the market conditions of today – we need to clean the slate. The discussion starts with how the number of people who are willing to sell their home has dropped significantly:
The Ultra-Low Inventory Causes More Volatility
A single one-off sale in La Costa Valley where a cash buyer paid 10% above the last model-match sale has caused a similar increase in other LCV sales. Now pricing is the same or higher than the first half of 2022 which was the peak of the pandemic frenzy.
But will it continue?
Can the current LCV homeowners count on those recent gains holding? Only if they use these recent sales for comps – and they are only good for six months. Buyers in 2024 and beyond will be reluctant to rely on comps that are 1+ years old.
Here’s where the volatility comes in to play. Without having a steady stream of LCV listings to continue the hot streak, we will be starting over each year. Sure, the sellers will use the comps from the previous year, but will the buyers? Will the sellers be satsified with getting the same price as the previous year, os insist on the usual 5% bump or more? Will they improve their home to deserve a premium price? Probably not, which means the buyers will be faced with paying more, for less. Not a good bet, because….
Mortgage Rates Are Going To Remain High
Mortgage rates don’t appear to have much chance of coming down this year. The Fed could raise further and kill any likelihood of rates getting back to 6%, let alone into the 5s, which means….
Home Pricing Will Be Flat
Generally-speaking, the overall pricing will most likely go back to the +/- 3% annually, which gives buyers a reason to pause. Without runaway prices that cause buyers to worry about getting in now before they are priced out forever, they have a reason to pause. They already have to wait patiently for another house to come up for sale, and if they don’t get the feeling that prices aren’t going up – they can, and will, wait for the next one. Might as well if prices aren’t going up much.
Seasonality Is Back
The knucklehaeds who think that housing has recovered are going to get a harsh reminder that real estate is seasonal – even in San Diego. Remember at the end of last year when I documented a few sales where the sellers were lowballed by more than 10% and they took it? It will happen again this year, which leads to…..
The Biggest Fear
Home sellers have had huge gains in equity, and if they have to give some back it won’t hurt much – and some will give more than others. A few low sales in the off-season will thwart the idea that comps from the first-half of the year are sustainable.
We’ve dodged the bullet this year – so far. Each year will be different!
It’s not passed yet but this is earlier than I expected so hopefully they can get it done in time.
Mortgage rates are like gasoline prices though – quick to go up, and sloowww to come down.
If they can pass this by Wednesday/Thursday and rates improve a little by the weekend, we might get a surge of buyer interest over the next couple of weeks. Home buyers who want to get into their new house before school starts need to secure something soon because many if not most sellers need a 30-60 day rentback after close – which after you count a 30-day escrow, it means that many buyers are already scheduling to pick up their keys at the end of summer.
I think there are waves or surges in the market, and not in a cosmic way. It’s just natural that some weeks are better than others for pursuing a new home, and people work in their searches around holidays and other family/work obigations. It would make sense that the same market forces are affecting the entire buyer pool in a similar direction.
Based on my previous guess below from March, we might be at the tail end of the selling season, but the demand has been strong enough that we should have some gas left in the tank. The next couple of weeks will probably be the high point for the rest of the year though.
Yesterday we saw how the number of listings has been dropping in San Diego County. Here’s a look at our favorite market – detached-homes between La Jolla-to-Carlsbad:
*The 64% is the percentage of 1Q23 listings that have closed escrow – more will be added, but the percentage will probably stay in 60s.
It looks like we’re going back to the good old days when there were big spreads between the median LP and median SP, and about a third of the listings not selling – in spite of having half as many listings!
(this year’s listings count should get up to around 1,100, but still scary low)
There will be more headlines about home sales being down – way down – and people might wonder if it means anything. Not really – it’s because there are fewer homes for sale.
It looks like it will continue too.
Last year in San Diego County there were 2,686 detached-home listings in May, and this month we’ve only had 1,114 with a week to go. In May, 2019 there were 3,559 listings!
Can sellers price it in?
Mortgage rates hit 7% again yesterday (with no points), and it’s doubtful that they will come down much once the debt crisis is solved. It’s going to be easy for potential home buyers to pack it in earlier than usual this year and the summer market is likely to be squishy – at best.
The six active listings in La Costa Valley got trimmed to five with Avenida Ciruela going into pending status, and four of the five actives had open house on Saturday! The weather was funky because a 50% chance of rain was forecasted early in the morning, but it never rained. The turnout was moderate (at best) however, and we had one threat of an offer.
We are the least-expensive of the bunch now, and should be the next to drop into the pending category just because of that – but you never know. Camino Serbal has gone quiet and is the one for sale that’s not doing open houses (after having three last weekend), so I think they must be close to a deal.
If we do get one or more offers and can make a deal in the next day or two, it will leave the three in the middle vying for the attention of the remaining buyers:
This is where it will get a little queasy with my sellers.
If we can get into escrow now, and then those three go down later, it might feel like we left money on the table if they end up closing for more. But they might not sell for those prices, or even sell at all.
We’re all in flight, hoping to navigate through a crowded space. Land the plane!
Open house 12-3pm on Saturday and Sunday, May 20th & 21st!
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Here’s another example of how the frenzy has taken a different path in each area.
Carlsbad, Encinitas, La Jolla and Rancho Santa Fe are rolling along with about the same or more pendings than last month – which should have been the peak – but the wheels have come off the wagon in Carmel Valley. There hasn’t been single-digit pendings in the 92130 since we started checking this two years ago! But there are homes for sale, which must mean the prices need some adjustment.
In 2020, there were 400+ pendings from June 22nd to Nov. 30th – with a peak of 491 pendings on Sept. 7.
Last April was peak frenzy, and a main contributor was the lack of inventory….and there were 48.2% fewer listings last month? Holy Cow! This is primetime selling season and if there aren’t homes for sale now, how much worse will it be the rest of the year?
Here’s how it looks between La Jolla and Carlsbad:
Remember when inventory plunged in April, 2020 because nobody wanted to let anyone in their house?
I’d love to go back to those days!
While other metro areas have YoY inventory exploding, we still have enough demand to cause the active-inventory count to decline year-over-year:
