Inventory Watch: January 2

Inventory Watch: January 2, 2024

The NSDCC inventory is starting off the new year with virtually identical numbers as it did in 2023!

The big difference?

Last year everyone thought we had a recession coming, and this year it’s all blue sky ahead.

At the beginning of 2023, the 30-year mortgage rate was 6.48% and all we heard was that existing homeowners would never sell because their existing 3% rate had them ‘locked-in’.

Today’s rate is 6.61% and everyone says that the lower rates will free up inventory this year!

Let’s examine the statistics that will give us a better feel for the future of home sales between La Jolla and Carlsbad. These are the three areas that are full of the homogeneous tract homes that give us a better read on the trends – they had 62% of the NSDCC sales last year:

To say that we’re in a mature market controlled by baby boomers is putting it lightly. The ‘locked-in’ effect has been around for a long time for whatever reason – but mostly because we live in paradise:

Carlsbad, CA

Encinitas, CA

Carmel Valley, 92130

The vast majority of those who have been in their home since 2016 or longer are ‘locked-in’ because of the price they paid – they aren’t going to pay double or triple what they paid for their current home to just move down the street or around the corner. If they have lived in the same home this long, chances are they will stay to the end – and we’re talking about 80% to 90% of today’s homeowners!

Thankfully, life happens. Death, divorce, and job transfers will keep causing homes to come up for sale.

It will take a 20% YoY surge in NSDCC inventory this year just to match the number of homes for sale in 2022, and I’ll be happy if it is just a 10% increase over last year!

But we have become accustomed to frenzy conditions, and for many it is all they know. The current environment feels somewhat like 2013 again, which was the last time we had a non-covid surge. We were coming off a hot 4Q12, even though rates didn’t change much:

But the market exploded in 2013, just because. I think it’s going to happen again this year, just because.

We’ll find out soon enough – our first listing of the year will hit the market a week from today!

The $0 – $1,500,000 Market:

The $1,500,000 – $2,000,000 Market:

The $2,000,000 – $3,000,000 Market:

The $3,000,000 – $4,000,000 Market:

The $4,000,000+ Market:

NSDCC Weekly New Listings and New Pendings

NSDCC List Price Quartiles