Monday, July 20, 2009

Local Sales Data

Home prices continue to drop. All of the zip codes I plot dropped in $/ft^2 terms. Only 90275 had decent sales volume (of course, where I wish to buy). I set up trend lines months ago on $/ft^2 and have not had any reason to adjust them. The market appreciated about $70 per square foot anually on the way up. Now its dropping at the rate of $30 per square food anually on the way down. Or is it...

May, June, or August are the three critical months of the local sales year. In terms of $/ft^2, May and June have been weak. This implies either buyer resistance/fear or that the market is about to capitualate. I think its the later, but the data does not *yet* prove it. It does look like 90275 has broken below $450/ft^2, but let us wait for August data to confirm that.

I should mention a little about the local selling seasons. I'll post July's data, but I'll warn you there are two months locally that do not deserve to have any conclusions made on their data: July and November. November is due to the holidays. The data could fluctuate any which way that month and it wouldn't tell us a thing. July is a weird month. Sales can spike or plummet in July and it would probably correlate best with vacation packages or the price of steaks at Costco; its certainly not a month that produces numbers of interest (locally). Yes, this July is also impacted by 'Bear Chits' (California IOU's) too. Hence, we'll make conclusions after August's data is available. February is the darkest month of the bad selling season (October-February). However, December does have a spike in closing, but I speculate that is just for tax advantage and does not compare to June-August closings. The exception being December 2007 (with the market turning south).

Another caution: While prices seem to be turning down since April at a faster pace, I would hesitate to make a conclusion before seeing the August data. If you cannot tell, I'm expecting no surprises that waiting buyers wouldn't like to see. But I'm not yet ready to declare a major change.

Note: Some friends & coworkers are noting its tougher to procure a mortgage above $417k locally too. Rumors are that mortgage insurance above $417k loans is tough to find. If that is the case, prices in this region of 10% down payments is going to make a huge belly flop. I suspect everything possible will be done to bring back the 'conforming jumbo' ASAP with 10% down. I do not think that any effort will work out, but the REIC will try. (I'm a fan of *real* down payments to stabilize a society.)

We could see the dollars per square foot drop pretty quickly soon... or it could be a blip. Stay tuned.

Got Popcorn?

The graphs:
Note that the slopes on the sales trendlines are calculated by excel:

Wednesday, July 01, 2009


I'm chuckling reading the comments from my last post. Yes, Inventory is down, but I still find it interesting. I also find there is a disconnect. Homes show up in the local MLS already with an offer. While I can only point to one agent doing this, I wonder, are homes being marketed before being put on the MLS? Significant? I doubt it, but interesting.

Ok, Inventory is way down. Everywhere I've been tracking. Heck Phoenix is below 40,000 (I lack detailed historical data as OCRenter used to have great data before that blog went private, so I didn't bother to track it.) Remember when it was 64,815 in Phoenix? 3/26/2008 is the peak I recorded. But there might be a day when it was fractionally higher. Today Phoenix is at 37,828!

Palm Beach (which by Ziprealty includes areas too far away to really be palm beach, but I was lazy and just used their inventory) peaked at 132,636 on 2/28/2008 (which was estimated to be a multi-year inventory at the time). Now its at 90,478. So Palm Beach county is still in deep chit.

Do note my south Bay LA only includes Torrance, Redondo Beach, RPV, PVE, Rolling Hills, and Rolling Hills estates. Yes I realize Hermosa and Manhattan beach would be among the high end areas... but I skipped to only tracking where I wish to consider buying.

Oh, I've been recording data since 11/9/2006 just for the record.

So in celibration of the Bear chit (California IOUs), I bring inventory graphs!