It’s August 1st, which means the local 10k InfoSparks data has been updated for July. The NSDCC median sales price may be 17% lower than it was in June, but maybe nobody will notice because it is a subset only we are following closely. The general data looks more homoginized:
The Median Percent paid of the original list price is one of the better indicators of market health. Homes that are presented well are selling, and they are getting all the money.
But not as many are selling – here are the county’s detached-home sales per month over the last five years. Last month’s total of 1,866 sales is 20% below last July’s count, and 47% lower than in July, 2019:
Fewer sales lead to more volatility in price because there are fewer comps to guide both buyers and sellers. Of the 153 NSDCC July sales, 41% were cash buys, which have been the most volatile – in both directions!
The Case-Shiller Index has risen more this year in San Diego than in any other metro area!
Could we end up being the most expensive metro in the country some day? It could happen, and it would be a return to the top spot, according to Channel 8 – check the first 30 seconds here:
The local home pricing is still off the highs of early-2022, but not by much.
The smaller sample sizes (fewer sales) will make it harder to accurately identify the trends and cause more frustration/indecision for both buyers and sellers. Have we recovered, or just briefly paused the softness?
Most of all, it will expose the skill sets of realtors.
Here is the early count on April sales between La Jolla and Carlsbad, with YoY and MoM comparisons:
There will be some late-reporters but April sales won’t get up to the 184 sales we had in March – which will probably end up being the best month of 2023 (remember that next year). There are only 148 pendings today so the May sales will most likely be under the March and April counts too.
The pricing doersn’t look that much different than last April when the frenzy was peaking. Just more people paying under list, instead of the majority paying over list.
Price-wise, we are back to where we were at the end of 2021, so the data above should still be in the ballpark. Glad to see that San Diego isn’t considered as wildly overvalued – it’s expensive here and people can afford it, apparently.
I like that the J.P. Morgan guys who wrote this article are focused on the individual metros! The more affluent areas will keep losing population to the more affordable towns, and the balance will be determined by how many rich people move here. Could it balance out nicely?
An excerpt:
The end of the U.S. housing market’s pandemic-induced volatility seems in sight.
A recent and telling stabilization of single-family home sales—surprising in the face of high mortgage rates—has us expecting prices to finish bottoming out across the nation by the end of this year or in early 2024.
By the second half of 2024, we believe, the national housing market will return to a pre-pandemic historical norm in which residential home prices climb slowly and steadily, keeping modestly ahead of the rate of inflation.
However, we also expect each city’s path back to normalcy to be very different.
Cities are on very different paths back to normal
Last fall, as the housing market was cooling, we said that national statistics, while informative, would fail to tell the whole story. We expected cities to experience widely differing drops in home prices based in large part on how overheated their particular housing markets were at the start of 2022, before interest rates rose.
Subsequent home price drops have been dispersed, and in the general direction we anticipated.
San Diego County doesn’t have the drastic weather changes which impact sales in other parts of the country, but there are some fluctuations….at least before Covid. This graph is interactive:
For buyers who want to pay less, the pricing is more favorable in the off-season. But you have to ask yourself – with the inventory being so bleak during the selling season, how much worse will it be in winter?
Hopefully, it will be more predictable than it has been lately!
The Fed’s insistence on raising rates just to see if they can tank the economy should keep a ceiling in place. The buyer pool is already limited to only those who can qualify and have big money, and the generational wealth transfer should be very active between now and 2026 when the estate-tax/gift rules go backwards.
But there isn’t much hope for more inventory, and the limited number of homes for sale should keep a pricing floor in place. It should mean that the overall pricing trend stays rangebound for the next few years – which will be BORING!
But it will be best thing that could ever happen.
If the frenzy conditions settle down and buyers and sellers can make sound financial decisions based on facts and logic, it wouldn’t be a bad thing!
The return of seasonality will keep pricing in check too. The graph shows how the median price usually peaks in the middle of each year, and then is flat or glides downward to the next selling season.
The 2020-2022 Covid-Frenzy price trend was just about straight up!
The median sales price for a detached home in the county continues on a seasonal climb. According to our MLS (depicted on the chart below) the median detached home price in March was $934,500. While the median price is down 4.2% from last March when the median price was $975,000, it is up 3.9% from February’s median price of $899,000.
Limited inventory is helping push prices higher, however it is still critical for sellers to price their home right. Multiple sources and personal experience have shown that pricing a home realistically based on local market data will help it sell quickly in today’s market. The danger of overpricing a home is having extended days on market, buyers questioning what may be wrong with a home that has not sold. This likely will result in price cuts and a steeper discount than if the home was initially priced at market.
Data from our MLS on the chart below shows the trending increased number of detached housing pending sales over the past 30 days compared with the months supply of housing. It reflects a market with high liquidity, meaning sellers who priced their homes right can expect an offer within a few weeks, at or near their list price.
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