McCormick Ranch Sales Update: August 2021

Can we start by talking about the monsoons? I'm *almost* more excited about the incredible storms we have had than real estate. The Greenbelt has been turned into a river more times in the past month than the prior few years combined. It's incredible!

Getting back to real estate, the recent talk about many of the news outlets has been making it sound like everything is about to fall off of a cliff. Headlines abound about how the market is slowing down and prices are being reduced. Let's look at some data and see if this is really anything to be concerned about.

Let's start with a 5 year chart of annual sales. This is solely for McCormick Ranch is a monthly plot of the number of sales including townhome, condo, patio home, and single family. Between 2016 and 2019, you can see a huge surge from February through July. Then, the second half of the year is a bit quieter. 2020 was overall swapped with a quieter first half and a busy second. 2021 has reverted to the norm with a busy first half. Thus, we should expect to see a quieter second part of the year based on history.

If we look at sales prices, there is a bit of a flattening for single family but all of the other categories are going up. As you can also see, patio home and townhome have been almost identical lines over the past year. There is a lot of crossover between these styles of homes. It has been an incredible run up for single family homes so a bit of an easing isn't necessarily a bad thing.

Conversely, price per square foot continues its upwards trajectory. Even single family is up over the past few months. This tells me that home prices are continuing to increase. But, many of the single family homes that have sold over the past few months have been smaller in size but selling at a greater premium. A fully renovated home is a great example of this.

Overall, what I am seeing is that homes that are move in ready are still selling for top dollar with a lot of interest. But, there is also a limit to this. If you list a home at 10% over the top market value it will just sit. Buyers are smarter than this and realize where the value will lie. Smart pricing is still one of the top components of selling a home quickly and for the maximum amount.

Moving forward, I am expecting that homes will continue to sell at a historically quick pace. We likely won't see the same metrics from the crazy spring we had (well, until next February or March). With still just a month of inventory (we have 38 active homes in McCormick Ranch and are selling around 40 a month), it will still be a seller's market for the foreseeable future. Hopefully just to a lesser extent for the remainder of the year.

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Yours in McCormick Ranch real estate,

Randy Arriola