If you haven’t heard yet, you either don’t pay attention to the real estate market or you’ve been living under a rock. The Realtor world is talking all about the anticipated ‘softening’ which is just a fancy word for a shift from our long standing seller’s market, to becoming more of a buyer’s market.
Basically for the last ten years, if you wanted to purchase a home, you had to come prepared with a pre-approval letter, a hefty down payment, additional offerings, and your first born kid. Now, things are starting to show that buyer’s have more leverage then they’ve had in almost a decade. How do we know this? Well, by looking at median sales price, inventory, units sold and days on the market (many other variables can contribute, these are my top four), you can better understand where things are at. I feature a monthly analysis on my YouTube channel, which is based off of year over year data for detached homes in targeting La Jolla. Thus, where are we at so far in 2019? I thought you would never ask :) See below a full overview analysis of the market activity month over month since January 2018*, looking at those four variables, median sales price, inventory, units sold and days on the market.
Median Sales Price
Starting out January 2019 in a lull of $2,075,000, dropping a whopping $250K from the month prior set us up for an interesting start. Since then, the busiest time of year for real estate took a slump, and then picked back up with a spike in May, then down again in June, then up again in July. Phew! A lot of back and forth that ultimately left us at $2,275,000 (as of July 2019), slightly higher than we started.
For this statistic, there are actually three data points you can look at. There is the month’s of available inventory (MOINV), both the forecasted and the actual. This number comes from how many units are currently in inventory, divided by the monthly units being sold. I prefer the actual month’s of available inventory as it takes it all into consideration. Then there is the final number, the actual inventory number or otherwise known as active listings. I’ve included all three graphs below, starting with MOINV Forecasted, then MOINV Actual, and finally Active Listings. In each graph, you will see a sudden drop in December 2018, and then a slow increase month over month.
In January 2019, we had a significant dip in units sold, and you can see that it progressively inclined until April 2019, and then we’ve been seeing a slow down again. Currently at 31 units sold as of July 2019, we’re up 3.3% from this time last year. There has historically been a spike in October as buyer’s are trying to get in before the Holidays, so hopefully that trend continues for this year.
Median Days on the Market
I tend to pull the median vs. average as there are homes that have been on the market for years in La Jolla, just waiting for the unicorn buyer to come along and pay the ideal asking price :). To avoid a skew in the numbers, the median is much more representative. Somewhat up and down over the past few months, we started January 2019 with the same number as of July 2019, 46. This is up 12.2% from this time last year, but with an increase in days on the market, sellers begin to adjust prices so they don’t have to wait longer. This is a big indicator of what is to come when it is significantly higher than normal. So far, it is higher, but nothing to be concerned about yet.
*all charts and data provided by InfoSparks through the SPN