Over the past 8 years we’ve experienced one of the longest and strongest housing markets on record. In Rancho Peñasquitos, the 92129 zip code, 2019 median home prices ended up 55% above 2011 … an average increase of $36,875 per year!
As we ended 2019 and started 2020 the housing market was like the Indianapolis 500 … it was racing! Then came Covid-19 and the world came to a stop. Our entire focus shifted to this dangerous and tragic virus that was moving across the planet.
Hospitalizations and deaths throughout the world started to climb and medical experts sounded the alarm. Travel was limited, countries shut down, we were encouraged to wash our hands continually and to stay at least 6 feet apart from our fellow man. Businesses were divided into “essential” and “non-essential.” Many businesses were ordered to shut down. We were all ordered to “shelter-in-place.” The stock market plunged while unemployment claims surged. As we now begin the multi-phase process of re-opening, we remain in limbo with a tremendous amount of uncertainty looming overhead.
Shelter-in-Place order was issued on March 19. Real estate in California was deemed “non-essential” for the next 11 days … no open houses, no in-person showings, no personal meetings of any kind. If you couldn’t do it virtually, you couldn’t do it. After much outcry and petitioning by the many affected by this, Governor Newsom reversed real estate status from non-essential to essential with very strict safety protocols.
92129 Housing Market Since Covid-19
So, what has the effect of Covid-19 been on OUR housing market? Has it shut down? Has it crashed? Are prices falling? Is it even possible to buy or sell a home in this environment?
Let’s find out by comparing year over year numbers. It was business as usual until the shelter-in-place order was issued, which was March 19. So, let’s compare March 20 – May 4, 2020 to March 20 – May 4, 2019.
92129 / March 20, 2019 – May 4, 2019
80 homes were listed for sale on the MLS
Of those 80 homes …
- 19 remained active as of May 4
- 45 went pending in escrow
- 13 were sold
- 3 went off market (cancelled, withdrawn or expired)
For the 13 that sold
- Ave days on market = 7
- Ave price per square foot = $428
- Median sales price = $858,000
Pending homes ave days on market = 9
92129 / March 20, 2020 – May 4, 2020
51 homes were listed for sale on the MLS
- 20 remain active
- 17 are pending in escrow
- 10 have sold
- 4 have been removed from the market (cancelled, withdrawn or expired)
For the 10 sold …
- Ave days on market = 4
- Ave price per square foot = $426
- Median sales price = $885,000
- Pending homes ave days on market = 12
- Active homes ave days on market = 21
- Year over year, inventory is down 36.25%
- Year over year, sales are down 23.1%
- Year over year, median price is up 3.1%
Yes, prices remain up, however, the most noticeable take away is 36% fewer homes for sale than the same period last year. Is this a result of Covid? Certainly the virus has had a part, that said inventory from January 1- March 1, 2020 compared to January 1 to March 1, 2019 was actually down even more … almost 39%!
The point? Inventory has been extremely low for months, going back well before we ever heard of the Covid-19. Interest rates are low, supply is low, demand remains relatively high. Not much has changed. Life goes on, babies are being born, people are getting married, some, unfortunately are getting divorced … many people still need to buy or sell a home.
The real take-away is that housing, like other sectors of our economy, is driven by supply vs. demand. It is always best to sell when supply is low and demand is high … that’s exactly the situation we find ourselves in right now.
So What Can We Expect?
March – May, is the time of year inventory starts to pick up … this hasn’t happened yet. We know some of our sellers were planning on being on the market by now, but have chosen to wait. We do think there is building inventory waiting for the right time to come on. Will we start to see it this month, in June, later? We don’t know.
Some experts are saying they still expect to see a 3% rise in prices. Others, as we’ve come to expect, say we’ll see prices fall by 3 – 5% by year end. Whatever happens it will be tied to Supply & Demand, like it ALWAYS is. For us, it’s too early to know. We remain optimistic, however, this is unprecedented and difficult to predict.
What We Do Know
- We know that just a couple months ago the U.S. had a roaring economy with the lowest unemployment of all time.
- We know that over the past 2 months our economy has shrunk and unemployment is now at record highs.
- We know this economic collapse was not typical, not the result of housing, or any other purely economic condition.
- We know even in the midst of this unprecedented time, people are still buying and selling homes.
- We know that “home” has become even more important than it was before.
- We know, from selling stats, Rancho Peñasquitos is one of the most desired communities in San Diego.
- We know inventory has continued to be the key driver in the housing market. Between low inventory and historically low interest rates, for the time being, demand is more than sufficient to produce multiple offers and keep prices up for homes priced right and in good condition.
- We know that the best time to sell in any given market is when inventory is low.
- We know that the way we do things has changed.
- We know real estate agents will need to adapt and innovate if they are going to properly serve their clients.
What We Have Personally Experienced
We put four transactions in escrow since March 20: Three listing sides and one buy side. There was no “coronavirus discount,” all sold where we expected them to sell prior to the shut-down.
Well before the shelter-in-place was issued, we anticipated the likelihood of needing to adapt and innovate … we scheduled 360 degree 3D virtual tours for each of our listings, which in hindsight was significant as two of our listings were not seen in person by the eventual buyers. Buyers relied on photos, video virtual tour of the home, neighborhood, and community, and 3D, 360 degree technology which is the next best thing to being there.
Our focus has always been to serve our clients AND our community anyway we can real estate related and otherwise … now more than ever. We love this community and are extremely grateful to “shelter-in-place” here.
Please call or email us if you have any questions or if we can help in any way.