The number of pendings is catching up with last year’s counts, and, with this being the end of October, there should be another 20+ that close escrow this week. The pendings’ count is going to get down to around 100 in the next couple of weeks, which probably means sales in November and December will be under 100 – unless we get a good pop after the election, which is feasible.
The hangover carryover of actives going into 2025 will be substantial.
We started 2024 with 255 actives, and by the end of the month it had grown by 23%. Pendings grew +24%!
We’re going to start 2025 with at least 350 actives though, and with a surge of new listings it could get back to 400-450 actives by February. It will be the first time we have that much to consider since pre-covid February, 2020.
Mortgage rates are going to be sticky. A good solution for buyers is to do a 2/1 buydown on their rate today. They get the benefit of lower-than-market rates for the next year or two while waiting to refinance once rates drop – and if they don’t drop, at least you get the 5.99% in this example:
A recent example: the buyer negotiated a $100,000 discount on a house priced in the $2 millions. Then he took a $60,000 discount on the price, and had the seller apply $40,000 towards a rate buydown to get a program similar to the one above!
One-year estimates show more homeowners and renters are moving to California vs. the number of people leaving, though they didn’t count those moving to a foreign country.
There has been a lot of discussion recently about the outrageous cost of fire insurance, and how the FHSZ has been expanded to include major portions of regular suburban towns like Carlsbad.
The buyer of our Circulo Sequoia listing will be forced to pay a premium for fire insurance now, even though the house is in the middle of the tract and doesn’t back to open space – just because the FHSZ box is checked ‘yes’ (above).
Hat tip to ‘just some guy’ for noting that Zillow now has climate-risk factors on some of their for-sale listings. Here is their report on my current listing in Carlsbad:
If the chances are between zero and 2.2% over the next 30 years, wouldn’t you think the insurance industry could find a way to take a little less? (new premiums are roughly double what they were).
The 41 large wildfires within 20 miles since 1984? I’d like to dispute that number (maybe 10?) and fires that are 20 miles away shouldn’t matter to a suburban tract house owner and their insurance company!
We’ve heard of the metric that measures the supply and demand in residential real estate sales. Lance called it the key housing metric going into 2025, but he is suspicious of its accuracy:
A rule of thumb in real estate is that anything below a 6-month supply of inventory is considered a ‘seller’s market,’ while anything above a 6-month supply is a ‘buyer’s market.’
However, that hasn’t always held true this cycle, and ResiClub’s view is that this rule of thumb is a bit outdated. In many housing markets, including Austin’s metro area, where house prices began to decline in June 2022 with only 2.1 months of inventory, that rule hasn’t applied effectively.
In fact, despite Austin’s months of inventory only reaching a high of 4.8 as of August 2024, house prices have already dropped by -19.8% from their 2022 peak in Austin. A better measure of this incoming pricing weakness was the abrupt active inventory jump that occurred in Austin in spring/summer 2022 (going from 0.4 months of inventory in February 2022 to 2.1 in June 2022), which quickly pushed active listings above pre-pandemic levels.
I agree that using six months is outdated, and four is probably too high also.
Let’s use three months as the new standard.
It is hard to believe how well our local market is doing.
There have been 120 closed sales this month between La Jolla and Carlsbad with a median sales price of $2,617,500 which is about 9% higher than last month when there were 165 sales! With the 120 sales already in the books, it means the final count should be around 150 sales in October – even with the political circus going on!
There are 470 NSDCC houses for sale currently, and the number has been steady.
Let’s do the math: 470/150 = 3.13
If three is the new standard, it means we are at the limit of a seller’s market. With higher rates and election backwash in November, it means this measuring stick will almost certainly be indicating a buyer’s market for the last two months of 2024.
The seaside mansion known as the “sandcastle” estate hit the market Tuesday for a whopping $108 million. The architectural wonder was designed to resemble the Chateau de Versailles. This is two doors down from the Marine Room so you know the types of waves that can pummel this area:
The seller paid $26,150,000 for the two properties, and purchased both at the bottom in 2009:
In February, these sellers bought our listing in Aviara Point for $3,365,000. They moved, then just sold this beach-close newer one-story with killer garage. They made out good too:
It was on this tour in 1982 that I saw the Who at the L.A. Sports Arena. It was the loudest concert I’ve ever attended, and my ears were ringing for a week – and I was in the back!
Whoops it wasn’t the 1982 tour.
It was the 1980 tour that I saw – look at the Townshend leap:
