November 15, 2021 Snapshot
With an expected market time of only 23 days, the San Diego County housing market is hotter than it has ever been for this time of year.
The active listing inventory shed 121 homes in the past couple of weeks, down 5%, and now sits at 2,243 homes, the lowest level for November since tracking began in 2012. For perspective, last year there were 3,671 homes at this time, 64% more, in 2019 there were 6,266 homes, 179% more, and in 2018 there were 8,285 homes, 269% more. That is correct, in 2018 there were close to four times the number of homes compared to today. It is hard to articulate just how acute the supply crisis has been this year, but it has underscored the incredible rise in home values and foreshadows continued appreciation to come. With the start of the Holiday Market, expect the inventory levels to plunge and drop below 1,800 homes by year’s end, at least another 20% lower than today. That will be on the back of fewer homes coming to market and unsuccessful sellers pulling their homes off the market and waiting until next year. The 3-year average from 2017 to 2019 (intentionally omitting 2020 due to COVID skewing the data) is 6,681, an extra 4,438 homes, or 198% more, nearly triple compared to today. There were a lot more choices back then. For October, there were 1,004 fewer new FOR-SALE signs in San Diego County compared to the 3-year average from 2017 to 2019, 23% less. Every single missing sign just exacerbates the inventory crisis.
Demand, a snapshot of the number of new escrows over the prior month, decreased from 3,005 to 2,964 in the past couple of weeks, shedding 41 pending sales, down 1%. At this point the limited supply of available homes is eating into the potential number of escrows. True demand, the number of buyers in the marketplace, is a lot higher than tracked demand based upon escrow activity. True demand is impossible to gauge, but the throngs of showings for just about every home that hits the market combined with the sheer volume of multiple offers generated illustrates that there is a vast pool of buyers looking to secure a home. Expect demand to continue to plunge with the start of the Holiday Market simply due to a dropping supply of homes. From now until New Year’s Eve, demand will sink to its lowest levels of the year. It will rise again in January after celebrating the start to 2022. Last year, demand was at 3,395, 15% more than today due to a four-month delay in the Spring Market because of COVID. The 3-year average prior to COVID (2017 to 2019) is 2,715 pending sales, 8% less than today. With a larger drop in supply compared to demand, the Expected Market Time (the numberof days to sell all San Diego County listings at the current buying pace) decreased from 24 to 23 days, an extremely insane, Hot Seller’s Market (less than 60 days) where there are a ton of showings, sellers get to call the shots during the negotiating process, multiple offers are the norm, and home values are rising rapidly. The lowest level of the year occurred on April 1st, at 19 days, not much different than today. Last year the Expected Market Time was at 32 days. The 3-year average prior to COVID was at 75 days, much slower than today, but still a Slight Seller’s Market.