The San Diego Real Estate Blog

North County Inventory Low - Multiple Offers Frequent

There's yet another market change a foot in North San Diego County and the Encinitas & Carlsbad area.  After 12 months of getting use to 25,000 homes for sale in San Diego County the inventory has shrunk to the point where sales are rapid and buyers frequent. The inventory now sits at about 16,000 homes as we come into the prime selling season here in Southern California.

January 1st marked the start of the open flood gate for buyers. Agents all over are experiencing buyers coming into open houses and commenting that they think the market has gone about as low as it's going to go in this cycle. Interestingly, I couldn't agree more based on the decreased inventory and frequent multiple offers. I recently had a sale with 5 offers!  I stood in front of our buyer sale posting board in our office tonight with several people gathered around, pointing out the many multiple offer sales that had occurred this month.  The decreased inventory and increased number of buyers may be the cause of homes starting to move more briskly and with many offers.

Lag time on market conditions is an important thing to watch for buyers and sellers. Consumers in general live in the "8 month ago" mode. Home prices, on a per square foot basis, dropped almost 10% in North San Diego County in 2006. Today you can get a bigger house for the same price as what sold 12 months ago.

For the buyers lag time is important to understand too. I've got many buyers who tell me "Hey, things are moving slowly and I can take all the time in the world to make a decision and shop." In reality, market time has decreased dramatically. Things are selling faster and with multiple offers so be careful. I've had several buyers lately who failed to make decisions quickly and the home they had their eye on went into escrow before they had a chance to make an offer. The 8 month ago mode of 90 days + market time is a reversing trend. 

As we approach the prime selling season I'm sure we're going to see some inventory changes. There's plenty of sellers who weren't realistic about their market price at the end of 2006 and they took their homes off the market toward year's end. I think we're going to see some of those return in addition to the usual increase in inventory that happens as we approach summer. If inventory remains steady and the number of buyers keep increasing (like has been happening) at least we'll see some stability come to what in 2006 was a falling market.  Forecasters see 2007 as a year of stability and 2008 exhibiting signs of appreciation. Add the Fed into the mix with a possible rate decrease and we might be poised for an interesting and active market.

The Pendulum is Swinging

There's some definite signs that a market swing is underway here in North County San Diego. It's been transitioning for some time (downward and in the buyer's favor) but indicators in the market show signs of balancing, solidifying and favoring the sellers.  Here's what I see on the street level.

I just put a very desirable condo into escrow in Carlsbad that had 5 offers on it. We haven't heard much about multiple offers in our area for well over 16 months because the inventory has been plentiful and the buyers have been few. There were 25,000 homes on the market in San Diego County 12 months ago and now we're approaching 15,000. That's an indication that the inventory is being used up fairly rapidly. Since January 1st I've had an open house every weekend and it's amazed me to see at least 15 to 20 sets of people come through all talking about how they'd been on the fence for 2 years and we're ready to get back into the market. Buyers are feeling that the drop we've been experiencing since mid 2005 has dropped about as far as it's going to go. I agree.

There's an abundance of buyers out there. I'd say there are at least 3 to 4 times more than there were in June of 2006 maybe more.

I was talking to a client of mine who is the equity line manager for Citibank and she's got some good insight into what's happening with interest rates. I've heard this before and yes it's speculative, but the rumor has always been that the Fed is expected to lower interest rates around April or May. Wow, could you imagine what that's going to do to home prices? If the inventory continues to shrink at it's present rate, considering we're coming into the prime home selling season, and buyers continue to increase, a drop in interest rates will not only solidify home prices in Southern California but I'd expect they'll inch upward. Supply and demand.

The market is neither good nor bad....it's just the market. We do know, however, there's always a good time as a seller or a buyer to jump in and this appears to be one of those times.

Sentrilock Exchange Goes Horribly Wrong in San Diego

Lack of customer service, misplaced sinage, few check in stations and a lack of under staffing contributed to flaring tempers and 4 to 5 hour waits in line in 80 degree temperatures yesterday as the Sandicor MLS system for North County San Diego and Sentrilock exchanged thousands of old lock boxes for new ones.

Any company that's doing business with real estate agents knows we're all about customer service. That was not evident yesterday when I asked the helper at the head of the line, which took me 3 hours to get the front of, if they were going to issue "customer service feedback forms." Instead of saying we apologize she snickered and laughed.  Surprisingly the exchange at the head of the line was moving quickly and everyone was baffled why it took 3 to 3 1/2 hours to get to the front of one of two lengthy lines. The second took over an hour to get through and the training session took :20 minutes.

Hundreds of agents from the North County San Diego area were caught unprepared as the Sentrilock company under estimated the magnitude of the operation. Few people, including the agent next to me who had just had a carcinoma surgery, had sunscreen, water or food. This was just a complete lack of respect for people's time and Sentrilock and Sandicor did nothing to warn anyone the wait would be long nor did they attempt to explain or apologize. At one point, after standing in the shorter of 3 lines for half an hour, someone mentioned I was in the wrong line because they were arranged alphabetically. To investigate I walked to the front and sure enough there was a sign but it was placed at knee level and completely obscured by hundreds of agents waiting. I asked if the helpers could raise the sign where it could be read and :30 minutes later someone attempted to fix the problem but nothing was ultimately done.

Hundreds of people were heard canceling appointments and rearranging meetings since the bulk of the day was spent standing in line. To top things off, when I reached the final point in line, my lock box key hadn't been programmed so I've been invited to return to the fiasco this morning to wait in line and attempt to pick it up again. Tell me your story. I'm interested in knowing if you think this was necessary or avoidable. I pretty much am giving Sentrilock a big fat zero for their performance at the Del Mar Fairgrounds.

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