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phaster
2 years ago

rich wrote:
my feeling is

[quote=rich]

my feeling is that the frenzy has probably peaked

[/quote]

w/ CA covid restrictions sorta ending

https://www.foxnews.com/politics/california-newsom-coronavirus-restrictions-reopen-tuesday

FWIW my gut feeling is people will have “irrational exuberance” and push prices higher awhile longer

sdrealtor
2 years ago
Reply to  Rich Toscano

I think we have seen the peak
I think we have seen the peak of frenzy conditions. We usually slow down in June with last year being an outlier we should return to that seasonal pattern. But we are far from done.

Also am I correct that the year over year is 28% based upon a 3 month moving average? If so I think we’ll see that number peak when you release this data in August. Prices seemed to be well over 30%+ by late April and by then the lag should catch up to report that.

sdrealtor
2 years ago
Reply to  Rich Toscano

Thx! So prices across the
Thx! So prices across the board were jumping through April and mostly hit peakish number in early May. I think once we are looking at a 3 month average that is full month of May/June/July in August we will truly see the true magnitude of the move up we have gone through. Prices are up across the country but when those number hit the press I would not be the least bit surprised to see us standing alone at the top nationally. It could be as much as 40% IMO

XBoxBoy
2 years ago
Reply to  sdrealtor

sdrealtor wrote:I would not
[quote=sdrealtor]I would not be the least bit surprised to see us standing alone at the top nationally. It could be as much as 40% IMO[/quote]

Do you feel that’s true for all of San Diego, or just NCC?

sdrealtor
2 years ago
Reply to  XBoxBoy

I could see 40% NCC for
I could see 40% NCC for detached and well north of 30% for the county. Condos don’t perform as well on appreciation but better on income.

As an example you could buy a house in Mira Mesa last year in low 600s. Now it seems like 800 is base for something in decent condition sold on open market.

gzz
gzz
2 years ago

Looks like the inventory
Looks like the inventory increase is seasonal, every recent year raw inventory went up April to May.

I just ran 92107, it is 31 sales in past 30 days and 19 active for-sales, 0.6 months.

I am open to the idea that we’ll keep up this pace and end 2022 at 2x Jan 2019. Seems crazy at first, but look at other asset prices, especially those whose stock is physically limited and produce income and appreciation.

RE appreciation is short-term limited and semi-sticky because houses need to appraise based on recent comps and a sort of general psychological sticker shock. Here’s what you’d expect to support such a theory: 1 extremely low inventory because prices are short term suppressed 2. Cookie cutter properties with lots of obvious comps show higher prices and less inventory shortage compared to hard to value properties with comps that require going back to 2020. The first sign is very present, the evidence seems to be against the second.

Escoguy
2 years ago
Reply to  Rich Toscano

The three zips where I own
The three zips where I own and watch both rentals/for sale show no change in trend. No pull back in number of views/saves.

If anything rents are going higher and there are fewer homes available on the market.

Only 25 4BR 2BA 2000 SFH for rent in whole county below $4500 per month!

This is important as it justifies holding vs alternatives of stocks/bonds/pay off of debt etc.

Appreciate the updates and everyones input. Just advise everyone to stay data focused.

gzz
gzz
2 years ago
Reply to  Escoguy

Related zillow stat: 4+/3+
Related zillow stat: 4+/3+ homes under $1 million currently number 46 in the entire city of San Diego, and 24 of those are in Encanto or San Ysidro.

Looking more closely at the remaining 22 homes shows a mix of incomplete construction, duplexes and 2-on-1s wrongly listed as single family, and weird things like a 6-bedroom house with 1400sf used as a SDSU minidorm and another that’s a “Residential Care Facility for the Elderly.”

Escoguy
2 years ago
Reply to  gzz

I usually like to draw this
I usually like to draw this box and see the 4BR+2 BA, 2000 sf, if I use 1M, it gets about 170 but yes a handful are funky and only about 20 in San Diego proper, I guess 1.3M is the new 1M.

tag

sdrealtor
2 years ago
Reply to  Escoguy

His number was much lower
His number was much lower because he did city of SD and 3 br. Most of SD city is older construction and built before they were building bigger houses and/or 3 bath homes. Much more in the county

Escoguy
2 years ago
Reply to  sdrealtor

Yes, here is a graph of San
Yes, here is a graph of San Diego proper.

Thin pickings.

tag

This is with 2 BA, not much difference, maybe 2 more.

Escoguy
2 years ago
Reply to  sdrealtor

1.3M only gets us to 46 in SD
1.3M only gets us to 46 in SD proper.

tag

w 4BR 2BA 2000 sf.

gzz
gzz
2 years ago
Reply to  Escoguy

I’ve found when playing with
I’ve found when playing with zillow, one way to screen out “fake” SFH listings is to require 1000sf lot minimum.

This screens out properties with no lot size listing which tend to be cloud condo SFH or townhouses in the wrong category.

You do miss out though on some very tiny houses on tiny lots, like this 991sf lot and home for sale: https://www.zillow.com/homedetails/2009-Bacon-St-San-Diego-CA-92107/16961031_zpid/

serendipity4
2 years ago

Hello, do we actually expect
Hello, do we actually expect the prices to correct (drop to pre covid levels) anytime in the next year or so? Thanks,

renterclint
2 years ago

Thanks for the great data,
Thanks for the great data, Rich. I think your SD Payment Index chart you shared in May is the most important aspect of trying to predict where the market will go over the next year. Even with these crazy-high values, PITI mortgage payment relative to rents/incomes is still below the historical median. So I think if interest rates & inventories both remain so low, we could likely see another year of price run up (which is a bummer for those of us looking to buy).

I know there’s a lot of talk about demographic/cultural shifts fueling demand, but I think interest rates are so critical here. If the 30-year fixed rate moves up just 50bps, I think prices will stay flat. I recall in 2018, the market softened very quickly with a sizable bump in the mortgage rate.

I wonder how much longer rates can stay so low with so much governmental cash dumping into the economy and inflationary pressures.

sdrealtor
2 years ago
Reply to  renterclint

Just got updated stats and
Just got updated stats and they are finally showing what I was seeing and writing about in Feb and March. The reported prices for June y-o-y for detached homes in most NC zips are up 30 to 40% and most prices everywhere are at least 20%.

Condo prices are all over the board. Mira Mesa condos are up close to 30% but Ocean Beach condos are only up 5%. Go figure