July 15, 2021 Snapshot

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The active listing inventory added 212 homes in the past two-weeks, up 7%, and now totals 3,059, its highest level of the year. In June, there were 15% fewer homes that came on the market compared to 5-year average between 2015 to 2019 (2020 was skewed do to COVID-19), 791 less. Last year, there were 4,577 homes on the market, 1,518 additional homes, or 50% more.

Demand, the number of pending sales over the prior month, decreased by 35 pending sales in the past twoweeks, down 1%, and now totals 3,423. Mortgage rates remain at historically low levels, maintaining demand’s current brisk pace. Last year, there were 3,625 pending sales, 6% more than today. It was just the second time the prior year was higher than the current year dating back to June 2020.

The Expected Market Time for all of San Diego County increased from 25 to 27 days in the past two weeks, a Hot Seller’s Market (less than 60 days). It was at 38 days last year, still plenty hot, but slower than today.

For homes priced below $750,000, the market is a Hot Seller’s Market (less than 60-days) with an Expected Market Time of 20 days. This range represents 41% of the active inventory and 55% of demand.

For homes priced between $750,000 and $1 million, the Expected Market Time is 27 days, a Hot Seller’s Market. This range represents 22% of the active inventory and 22% of demand.

For homes priced between $1 million to $1.25 million, the Expected Market Time is 23 days, a Hot Seller’s Market. This range represents 7% of the active inventory and 8% of demand.

For luxury homes priced between $1.25 million and $1.5 million, in the past two-weeks, the Expected Market Time decreased from 32 to 27 days. For homes priced between $1.5 million and $2 million, the Expected Market Time increased from 34 to 45 days. For homes priced between $2 million and $4 million, the Expected Market Time increased from 50 days to 58 days. For homes priced above $4 million, the Expected Market Time decreased from 199 to 189 days.

July 1, 2021 Snapshot

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The active listing inventory added 84 homes in the past two-weeks, up 3%, and now totals 2,847, its highest level of the year. From June 1st through June 15th, there were 15% fewer homes that came on the market compared to 5-year average between 2015 to 2019 (2020 was skewed do to COVID-19), 391 less. Last year, there were 4,701 homes on the market, 1,854 additional homes, or 65% more.

Demand, the number of pending sales over the prior month, decreased by 126 pending sales in the past two-weeks, down 4%, and now totals 3,458, its largest decrease of the year. Mortgage rates remain at historically low levels, maintaining demand’s current brisk pace. Last year, there were 3,762 pending sales, 9% more than today. It was the first time the prior year was higher than the current year dating back to June 2020.

The Expected Market Time for all of San Diego County increased from 23 to 25 days in the past two weeks, a Hot Seller’s Market (less than 60 days). It was at 37 days last year, still plenty hot, but slower than today.

For homes priced below $750,000, the market is a Hot Seller’s Market (less than 60-days) with an Expected Market Time of 19 days. This range represents 42% of the active inventory and 55% of demand.

For homes priced between $750,000 and $1 million, the Expected Market Time is 22 days, a Hot Seller’s Market. This range represents 20% of the active inventory and 22% of demand.

For homes priced between $1 million to $1.25 million, the Expected Market Time is 24 days, a Hot Seller’s Market. This range represents 7% of the active inventory and 7% of demand.

Summer Transition

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The Summer Market is officially here and with it typically comes an increase in the inventory, a slight drop indemand, and a rise in market time. The temperature is heating up and the days are growing longer. The 4th of July is less than three weeks away, and family vacations are booked. From the pool to the beach to hiking Southern California’s many trails, summer is here along with all its distractions. Toss in the fact that everybody can walk the earth freely again now that COVID-19 is disappearing. Everyone is ready to enjoy a bit of fun in the sun.

During the Summer Market demand decreases slightly. There are fewer new escrows opened due to buyers placing their home search tours on pause to take a short break and enjoy all the trappings of summer. With demand dropping, the supply of available homes rises as more homeowners place their homes on the market. Many often mistake the Summer Market as the best time of the year to sell a home. In terms of new escrow activity, it is second to the Spring Market. With an increasing supply and falling demand, the Expected Market Time (the amount of time between hammering in the FOR-SALE sign to opening escrow) increases.

The word on the street within the real estate trenches is that there are already signs of the “summer shift.” A home might not sell in 4 days after being exposed to the market for only a weekend. Instead, it may take two weekends. Homes that are grossly overpriced will have to reduce their asking price. Surprisingly, 7% of the active listing inventory had to reduce their asking price over the past week. Many will scratch their collective heads and wonder what is going on in the market. The answer is simple: SUMMER. It happens every year, and it appears as if this year will be no exception.

How Long Can This Market Last?

Housing is definitely not an exception to increasing prices. In the first quarter of 2013, there were 4,675 closed sales below $750,000, 89% of all sales. It was 83% of all sales in 2016, and 71% last year. In 2021, only 61% of all sales were below $750,000 in the first quarter. As home prices have appreciated over the years, the lower price ranges have dwindled and became a smaller percentage of the housing stock. It is not merely the fact that fewer homeowners within these more affordable price ranges have not placed their homes on the market; instead, it has more to do with home values appreciating and surpassing the lower range thresholds.

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