MESA PACIFIC MORTGAGE & INVESTMENT INC.
A California Corporation Serving San Diego Homeowners Since 1981
This chart gives
San Diego Real Estate Trends
Early Bird Report on August 2024 Trends in San Diego Real Estate
Sellers look like their feeling the urge, as the chart shows active listings are up 35.8% from last year to 2,825, but nowhere near that unexplained pratfall from 9,894 in 6/2019 to just before the plandemic, where it fell to 3,265 in December 2019--and all during record low interest rate environment, still mystifying most mystics and non-mystics alike. Sales are keeping somewhat of a pace albeit sold detached still running, according to this chart, under that historical barrier low of around 1500 at 1,290, 5.6% lower than last year. Of the 2,825 active listings, the new ones total 1,919, nearly 20% increase from last year, while pendings are up 12% to 1,346, which should give a boost to September closings. An additional lift should come from mortgage rates now in the 5.875% range (5.99% APR), a far cry from 7% earlier this year. The supply balance is still in the favor of sellers, with only 2.4 months of available, but sellers are caving somewhat on their list price, as average percent of sales price to list is 98.7%, whereas buyers were bidding as high as 6.8% above list in April of 2022, just before rates rose somewhat dramatically. This 98.7% figure will likely keep the lid on seller ambitions to list higher than last month’s sales. While prices did rise by 2.3% in August from August of 2023, the chart says prices flatlined at the height of the Summer season at an average price of $1,391,500, and historically will falter a bit from here.
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UP AND DOWN THE STAIRCASE
As has been the case all of 2023, median sales price up, number of sales down. But this down is out with only 854 detached homes sold, tossing these numbers into the dumpster, lower than any month in modern times, as the chart illustrates. The median sales price rose by 15% from last January to $976,250, in accordance with slim pickings of just 1638 detached homes for sale, and a decent drop in mortgage rates, nearly 3/4% below November's average. Things should turn around on sales activity in February, given one extra day for leap year-ha, and also because new listings perked up at 1447, doubling the down beat volume in December and pending sales are higher at 1125, but hardly news to write home about.
SPOTLIGHT ON SAN DIEGO ABOVE THE STATE'S MURKY WATERS
Apparently, tourists are voting with their feet and beating it to San Diego, according to this new report on hotel revenue standings in the state:
“San Diego County stands out in our 2023 survey as it saw the highest increase in the median price per room of any of the counties in the state- up 27.5,” Alan Reay told the Times of San Diego.
“This shows how desirable hotels in the region are to investors as many view the market as having a much more diverse economic base than most of the other markets in the state, that is not heavily relying on any one industry, such as tech ( see what has happened in San Francisco and San Jose, for example).”
“We see the demand for San Diego hotels continuing for all product types and locations,” he said. “It’s hard to see weakness in the local market and with all of the negative publicity we are seeing in cities like San Francisco, Los Angeles and Oakland (crime and homeless),
“This will only drive more meetings/convention business to San Diego” he concluded. Tom York on Business: San Diego Shines, Bucks Statewide Decline in Latest Hotel Sales Survey (msn.com)
Hotel deals implode in Bay Area and California as economy turns murky (msn.com)
RENT CONTROL AND RISING RATES--A DOUBLE EDGED SWORD
ISince the beginning of modern times in the commercial lending world, nothing seemed to beat the category of multi-family housing. Restaurant financing was at the bottom of the building category because of this entertainment factor few could measure, going from glitzy to just so-so by consumers. Office buildings had their ratings and subcategories depending on quality and location, but they all suffered in economic downturns, as businesses sought leaner leases. But one always needed a roof over their heads in good times and bad, so multi-family units were the default pick of the litter by commercial lenders. However, government intervention in markets with rent control rules, while raising interest rates on loans that are typically on adjust rates loans, creates a vice-grip on landlords and hefty downward pressure on property values, and problem loans for lenders: "Other landlords in the neighborhood who are subject to New York City’s rent-regulation laws, which were strengthened in 2019, have seen property values tumble by an estimated 50%, according to Bloomberg News.
New York Community Bancorp looks to sell rent-regulated commercial real estate - MarketWatch
Naturally, the way to stabilize rental rates is to build more apartments, but what builder/investor would want to climb into this government created sandwich--unless you are a behemoth investor that needs no loan and can pickup properties on the cheap all day long when things go sour.
BANKS WANT THEIR PIECE OF THE PIE BACK ?
Yellen Warns of Potential Nonbank Mortgage Lender Failure | Watch (msn.com)
An increase of 70% of mortgage loan originations by non-banks must have the banks concerned so they activate Treasury Secretary Yellen. Sorry Janet. Non-bank mortgage lenders don't have a depositor risk involved like bank failures do. When a customer makes a deposit to their checking/savings account, they essentially are loaning the bank this money. The money is then invested, and could be involved with risky loans like NY Community Bancorp. If bank fails due to poor investments, the depositor is technically a creditor awaiting payback in bankruptcy, and not guaranteed a return outside of FDIC insurance. No such thing happens with a non-bank mortgage lender. If it fails, it sells any existing loan it has and closes the company, or more typically, is bought by another non-bank lender. They make the loan in accordance with strict guidelines, then sell it to Fannie Mae, Freddie Mac, so risks of lending are minimal at best. It's the regional and big banks to keep your eye on, as they quietly ducked the market-to-market valuations of their mortgage loans and Treasury notes, which means, if there was a need to shore up their reserves/liquidity like NYC Bancorp, and sell these notes of around 1%, they would have to discount them as much as 50cents on a Dollar. That's what Janet should be discussing, and likely only behind closed doors.
12/03/2023
2023 most definitely would put smiles on home-owner faces most everywhere in the County and considering the numbers, would be considered the best of times. Both average ($1,267,400- up 13.5%) and median ($945,000 up 9.2%) sales price rose either near or at double digits from December last. But much of that came from a record squeeze on inventory. Just like an OPEC embargo on output sends oil price sky high, so too with real estate, and the valves were the tightest ever here in San Diego County. Would-be buyers and their agents awaiting a batch of new listings all year long got a sorry surprise each month, and no different here in December. In fact, new listings did a disappearing act at 696, 19% below last December’s modern low and as the chart depicts, staying down in a lower bracket like no other time--all year long. Naturally, the number of sold listings aren’t going to far much better, and last month, as the chart shows, broke through the record low bottom rung established on 01/2008 at 897, selling just 869 homes, 21% worse than last December. About the only other winner in 2023 was the tax assessor’s offer, since volume speaks volumes about increased tax receipts of roughly 1.25% on $1.50 billion on all property type sales or $18,750,000. Now the smiles might come off on home-owners who face property reassessment from these high-flying prices, sorry to say.
sales chart
ACTIVE? DON’T READ ALL ABOUT IT—JUST YET, BUT SALES PRICE UP 18%
While the charts show even more active listings at 4,347, up a whopping 53% from last November, disbelief in that number required we run the MLS database of all detached active listings, which says this not even close and stands at 1,847. A quick search example on La Jolla listing in the database counts 76, while the chart says there are 155. There were 64 a year ago, so there are some bugs here. What does correlate between the two searches is that total sold is a paltry 898, 1 sale higher than the worst month in modern times back in January 2008. From this ash heap (where 1 sale was recorded by a Mesa Pacific listing) rises the average sales price, up 15% from November last to $1.334mil, and uncharactistically for the season, nearly hitting the all-time mark of $1.351 mil back on 4/2022.
11/04/2023 October Trends For Reference~
ACTIVE, ACTIVE, READ ALL ABOUT IT !
That’s the main trend showing up in October, as the chart shows active listings uncharacteristically jumped to 4,030, up 26.9% from last October and a whopping 41% from two years ago… so the best way to determine how this impacts a homeowner or buyer is by looking at the local area stats. Contact us today for all the data you desire. 619-390-4042
MORTGAGE RATE TRENDS & ECONOMIC REPORT~
12/01/2023
CLEARING THE RUNWAY FOR ELECTION YEAR LANDING?
FNMA wholesale 30yr. fixed-rate mortgage auction results: 6.48%, down .32% from November’s averages, as China steps in and buys some $32 billion in U.S. mortgage-backed securities. While China steps away from U.S. Treasury’s “promise to pay” notes, with total debt rising to some 33 trillion fiat Dollars, it does see value in Dollar denominated debt backed by a hard assets like U.S. homes. Meanwhile, back home in China, Chinese economy in meltdown as millions default in echoes of 2008 financial crash (msn.com) . What’s the best way to maneuver Janet Yellen’s prediction of a soft landing for 2024? Simply lower the new job numbers (likely coming this Friday), fiddle with lower inflation data, and lower the inflated GDP data:” GDP may paint a sunny picture of the economy, but this number tells a different story (msn.com). Gross Domestic Income vs Gross Domestic Product, “ In theory, the two gauges should arrive at exactly the same total because every dollar that someone spends is another person’s income Over the past four quarters, GDP has increased 3% while GDI has fallen 0.16%, according to an analysis of Commerce data by Joseph LaVorgna, chief economist of SMBC Nikko Securities. That’s the biggest disparity between the two measures in recent memory.” But where the rubber meets the tarmac could find some large BRICs on the runway, as it gets rough selling a couple trillion in fiat Dollars to a world that thinks this promise to payback isn’t worth the paper it’s written on and will want more than a promise, like gold, silver, and finished products. A wheel barrel full of newly printed promissory notes may someday not compare with a barrel full of oil, as German citizens discovered 100 years ago.