November 30, 2021 Snapshot
Merge extremely strong demand with an anemic supply of available homes to purchase, a record low, and housing will continue to soar for not only the remainder of this year, butthrough 2022 as well. Today’s Expected Market Time has dropped to 20-days, one day higher than its lowest on record established on April 1st. At 20-days, it is an insanely HotSeller’s Market. Anything below 60-days is considered a Hot Seller’s Market. When it drops below 40-days it has reached the level of an insane market. At 20-days, housing is nearly indescribable. It is where every home is greeted with a ton of showings, sellers get to call all the shots during the negotiating process, multiple offers are the norm, and home values are rising rapidly.
The active listing inventory shed 332 homes in the past couple of weeks, down 15%, andThe active listing inventory shed 332 homes in the past couple of weeks, down 15%, andnow sits at 1,911 homes, the lowest level since tracking began in 2012. It dropped below2,000 for the first time ever this past week. At this point, how far it drops from here isanyone’s guess. These are uncharted waters. Since 2015, it has dropped, on average, by18% from the end of November to year’s end, meaning the inventory could drop to below1,550 homes upon ringing in a New Year. A dropping inventory, typical for the HolidayMarket, only further aggravates the already insane housing market.Last year, the inventory was at 3,304, 73% more, or an additional 1,393 homes. The 3-yearaverage prior to COVID is 6,271, an extra 4,360 homes, or 228% more, triple compared totoday. There were a lot more choices back then.For October, there were 981 fewer new FOR-SALE signs in San Diego County compared tothe 3-year average from 2017 to 2019, 23% less. Every single missing sign magnifies theinventory crisis.
Demand, a snapshot of the number of new escrows over the prior month, decreased fromDemand, a snapshot of the number of new escrows over the prior month, decreased from2,962 to 2,873 in the past couple of weeks, shedding 91 pending sales, down 3%. Onaverage, demand drops 7% to start the Holiday Market, yet heightened demand continueseven though the holidays are here. Eventually, as the limited supply of available homes topurchase drops even further, the number of new escrows will drop right along with it. It willcontinue to plunge through the end of the year and fall to its lowest level upon celebratingthe arrival of 2022. It will then do an about face and rise along with more homes coming onthe market as housing progresses through January.Last year, demand was at 3,152, 10% more than today due to a four-month delay in theSpring Market because of COVID. The 3-year average prior to COVID (2017 to 2019) is 2,533pending sales, 12% less than today.With an enormous drop in supply compared to the small drop in demand, the ExpectedMarket Time (the number of days to sell all San Diego County listings at the current buyingpace) dropped from 23 to 20 days, the second lowest level since tracking began 10-yearsago. At 20 days, it is an extremely insane, Hot Seller’s Market (less than 60 days) wherethere 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 3-year average prior toCOVID was at 76 days, much slower than today, but still a Slight Seller’s Market.