This week: it’s time for our usual deep dive into the monthly numbers 🤿

November 2021 Round-up

When inventory is this low, it doesn’t really matter what else is going on in the macro-market…prices are on the rise again because demand FAR exceeds supply.

Dec. 3-9Prev 4 Week Avg.% ChangeNov. 26 - Dec. 2
New Listings473483-1.97%488
New Pending Sales6446420.31%525
New Sales61552118.04%528
Active Inventory2,0202,317-12.83%2,140
30 Year Fixed Mortgage3.10%3.07%0.9%3.11%

Based on the monthly data reporting for November, we’re already below the 2,000-mark of available homes on the market (1,909 with detached and attached combined).

Detached (11-2021)Detached (11-2020)% ChangeAttached (11-2021)Attached (11-2020)% Change
New Listings1,6331,897-13.92% 8381,072-21.83%
New Pending1,9081,914-0.31%1,0001,069-6.45%
New Sales1,9102,177-12.26%1,0241,158-11.57%
Med. Price$860,000$750,00014.67%$595,000$475,00025.13%
% Orig List Price 101.3%100.2%1.1%102.1%99.4%2.72%
Mo. Supply 0.61.2-50%0.51.5-66.67%
Avg DOM24240%2125-16%
Affordability4553-15.09% 6583-21.69%
30 Yr Fixed3.07%2.77%10.82%

There are just no words to describe how bonkers that is for a geographic area of over 3 million people…it’s insane.

We’re sitting at HALF of one month’s supply of inventory. That means if no new homes were listed, buyers would snag up all the active inventory in just 2 weeks.

Remember when COVID started and there was a shortage of toilet paper at the grocery stores? Yeah…kinda feels like we’re headed that way for houses.

There isn’t much else to talk about. Despite the day-to-day drama of the news, mortgage rates have remained surprisingly level-headed.

A VERY large and fast increase in mortgage rates is really the only thing out there that could cool homebuyer demand quickly, save for some unforeseen Black Swan type event.

In The News
The Week Ahead
  • The Fed is set to meet later this week and the markets are already expecting them to speed up the tapering of their bond-buying campaign.


Looking Ahead

The San Diego real estate market is influenced primarily by three variables right now:

  1. Housing supply
  2. Mortgage rates
  3. Local job market (employment and wages)

Every month I touch on each one to see how we’re doing using labels. GREEN means upward pressure on prices, YELLOW means even pressure, and RED means downward pressure.

Housing Supply – VERY GREEN
1,909 available homes for sale in all of San Diego County. Nuff said.

Mortgage Rates – GREEN
Inflation is still riding high but there seems to be some consensus growing around the idea that we might have seen the worst of it with the most recent report from last week.

While the inflation rate is high (6.8%), the pace of increase has started to level off which is a good sign. Same from the Producer Price Index which is usually a good indicator of future consumer inflation.

The Federal Reserve will for sure start raising its benchmark rate in 2022 once they wind down their bond-buying campaign, but that actually might not be a bad thing for mortgage rates. For the most part, the expectation is already built into the mortgage rate as investors are expecting these decisions from the Fed.

Fannie Mae economists predict mortgage rates for 2022 will average out at 3.3%. NAR is at 3.75%. Either option is a rosy outcome if you’re hoping for more appreciation here in San Diego – anything in the 3% range should continue to support a bullish real estate marketing unless something unforeseen sparks a glut of inventory to hit the market.

Jobs – GREEN
The San Diego economy is humming along nicely. The county’s unemployment rate fell to 5.3% in October, down from 5.6% in September and 7.5% in October of last year. Life sciences and technology companies are thriving here, which continues to attract higher-paid workers to the area.


My comments from last month are still spot on to how I’m feeling today. Here they are:

Real estate is a “market” like any other. Ultimately, all the variables that influence a market roll up to two that matter most – supply and demand.

If demand is greater than supply, prices increase. And vice versa.

In case you needed a reminder, this is what it looked like last year when demand picked back up after the holidays.


There is no doubt in my mind….we’ll have a lot less supply of homes for sale in the upcoming Q1 than we did this year.

Yes, rising rates and higher prices will also serve to lower demand, but it will also continue to lower supply as well. I think it’s a wash and we’re going to be exactly where we were last year in Q1.

New listing volume is WAY down, which makes total sense. Sellers can’t afford the new housing environment we find ourselves in today. It’s cheaper to stay put. Empty nesters can’t afford to downsize. Moving up is becoming harder and harder.

And don’t forget, we still have a HUGE wave of higher-earning millennials flooding the market to buy homes. We also have a lot of higher-earning professionals from other (even more expensive) parts of the state, country, and world moving into America’s Finest City where our prices are still a bargain compared to what you get (perfect weather and beaches!).

I’m not saying I like it, but the stars are aligned once again for massive price gains in Q1 and Q2 again unless something big happens to disrupt demand.