This is a long reply to this blog by Jim the Realtor. Basically, I do an Anova analysis to see if the 2007 data is different than the other years. The answer? DEFINiTELY. The game has changed.
http://www.bubbleinfo.com/journal/2007/7/23/san-diego-county-sales.html#comments
The graph shows sales in San Deigo over 5 weeks for 2004 through 2007.
Here is the raw data from Jim:
Weekly Closed Sales, San Diego County
2004 2005 2006 2007
June 16-22 545 532 412 337
June 23-29 645 626 461 480
June 30-6 642 605 441 241
July 7-13 505 464 331 252
July 14-20 540 542 423 223
Totals 2877 2769 2068 1533
YOY % chg ------ -4% -25% -26%
What do we see?
What about the weakly sales? That 223 sales is way off... The average of July 14-20 is 432 with a standard deviation of 209. Now what if we took out our week? Average of 501 with a standard deviation of only 68. In other words, 2007 is 4 standard deviations away from the mean.
Chances to be off a standard deviation: Sourcing Wikipedia. :)
http://en.wikipedia.org/wiki/Standard_deviation
Within 1.41 standard deviations is half the data.
Four standard deviations away? 6% chance its random. (Using Chebyshev's inequality values, rather than a normal distribution.) So the July 14-20 week is not a normal variation from other San Diego weeks. Something odd happened.
Ok, how about year to year. For 2003-2006 the average sales per week is: 514.
The standard deviation is 88. For 2007 the average is 306.6. That is 2.34 standard deviations away from the mean. Or... there is about a 17.9% chance that 2007 is just randomly a different year.
Most likely something has changed in 2007 (according to the statistics). Of course, reality says we've driven into the valley and won't pull out for quite a few years.
The change is happening.
Got popcorn?
Neil
5 comments:
I just published an article comparing the real estate markets in 3 large Californian cities: Los Angeles, San Jose and San Diego. The article was prompted by the "10 best places to live" article on CNN. You may want to read this real estate comparison at:
http://realestateandhomes.blogspot.com/2007/07/top-10-big-cities-to-live.html
Henry
www.movoto.com
If you're reading westside-bubble.blogspot.com, there's info on a short sale listing there which I just ran the numbers on. They're looking at a tax bill of about $100K when they're gone. I don't think those owners will be back in the housing market in three years.
"DEFINATELY"? Dude, if you're going to go all-caps you should check your spelling first. ;-)
I don't have to convince you how bad it's going to get, because over time you're doing it all by yourself.
Pass the popcorn.
TJ...
oops! I'm a scientist, not a speller. ;)
It is getting really bad. The latest rumor is that the limit to foreclosures is bank staff. Yikes!
Don,
One smart coworker has figured out legal ways around short sale taxes. If true (I'm unsure, but he's smart and honest), I'll post.
Neil
My experience is that people's legal ways around taxes are clever schemes with the fatal flaw that they are neither clever nor legal.
Some people believe with great fervor preposterous things that just happen to coincide with their self-interest. “Tax protesters” have convinced themselves that wages are not income, that only gold is money, that the Sixteenth Amendment is unconstitutional, and so on. These beliefs all lead — so tax protesters think — to the elimination of their obligation to pay taxes. Coleman v. Commissioner, 791 F.2d 68, 69 (7th Cir. 1986).
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