June 2009 Resale Data Rodeo

Submitted by Rich Toscano on July 7, 2009 - 8:36pm

Well, we sure do appear to be having a good old fashioned spring (and now summer) rally.

At least as measured by the size-adjusted median, prices put in their third month of gains. While the size-adjusted median was up a demure 1.4% on the month for single family homes, it rocketed upward 9.1% for condos.

The plain vanilla median looked not all that different, with single family homes up a bit more and condos a bit less:

My proxy for the Case-Shiller index, based on a 3-month average of the single family size-adjusted median, turned up accordingly:

This directionally matches up with the calculations being done by Pigg Eugene over at sdhpi.blogspot.com.

Inventory was slightly higher for the month but remains quite low compared to the last few years:

And here is the very first graph showing the mix of illusory "reverse-shadow" inventory versus "actually available" inventory, as so aptly described by Pigg urbanrealtor here.

I will be updating this each month, as you might expect.

Volume, meanwhile, was good once again. Rates didn't really jump until June, so we haven't yet seen to what extent the rise in rates might impact sales activity.

At June's sales pace, we were at just over 4 months' worth of inventory -- and that includes the illusory reverse-shadow inventory. Eyeballing it from the first graph, if we pulled out illusory inventory we'd be closer to 3 months of inventory.

The price increases charted earlier in this article should come as no surprise given the amount of competition for what little inventory is out there. There's little question that a genuine spring/summer rally is underway (at least on an aggregate countywide basis). The question is how long it will last. There are some longer-term threats to the market, notably shadow inventory and the potential for higher eventual mortgage rates. But for right now, with inventory so tight in comparison to demand and (as of last month, anyway) getting tighter, the rally lives on.

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Submitted by an on July 7, 2009 - 10:41pm.

How dare you show questionable bullishness around here!!! (j/k). Thanks Rich, those are some nice charts.

Submitted by outtamojo on July 7, 2009 - 11:51pm.

Looks like we back to Oct. 08 prices-woo-hoo!

Submitted by sdybob on July 8, 2009 - 7:07am.

More like back to Feb. 09... looking at the CS-HPI chart.

outtamojo wrote:
Looks like we back to Oct. 08 prices-woo-hoo!

Submitted by peterb on July 8, 2009 - 11:31am.

It's a recovery....run out a buy real estate while it's still available at these incredibly low prices. Pay no attention to the crashing economy.

Submitted by sdduuuude on July 8, 2009 - 1:30pm.

Leave it to Rich to provide creative, never-before seen analysis techniques. Where else can you find a trend chart with 1 data point?

It reminds me of a Flintstones episode where the families are standing over a tiny stream with a sign saying "Grand Canyon" and Fred says something like "it isn't much now, but they say it'll really grow into something big."

Submitted by drboom on July 8, 2009 - 3:46pm.

I really like the overall contingent count. I wonder how many agents are updating them in a timely manner. F'rinstance: I went into escrow more than a week ago on a short sale and the listing agent hasn't bothered to change it to pending yet.

Thanks, Rich!

Submitted by sdrealtor on July 8, 2009 - 7:29pm.

Interesting. For months I thought that short sales with offers on them already were about 1/3rd of the active inventory and there it is in blue and yellow (plus an allowance for the non-compliant agents). Wouldnt surprise me if it was 40%.

Submitted by Huckleberry on July 9, 2009 - 5:35pm.

"With rates down and prices down finally, two years of pent up demand in the mid-to-high end market is manifesting in more transactions. This is having the effect of pushing up median prices.

The chart below shows how prices crumbled as sales volume increased in 2007/2008. In Jan/Feb 2008 values were only down 20% from the peak. As sales picked up and first timers and investors bought all the way down, values plummeted another 45%.

This is the exact dynamic we will see with the mid-to-high end market. Transactional volume will drop prices considerably but because of a relatively stable demand for low-priced foreclosure-related properties, the sales mix will have the effect of pushing up median and average house prices. However, because the Case-Shiller looks at pairs sales, as mid-to-high end transactions increase as a percentage of total sales it should have the effect of pushing down the index. Is anyone prepared for rising median and average prices and a plunge in the CS?"

http://www.fieldcheckgroup.com/2009/07/0...

Submitted by davelj on July 10, 2009 - 2:09pm.

sdduuuude wrote:
Leave it to Rich to provide creative, never-before seen analysis techniques. Where else can you find a trend chart with 1 data point?

Where exactly is the "trend chart with 1 data point"? I think I missed it.

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