May 2012 Resale Data Rodeo

Submitted by Rich Toscano on June 23, 2012 - 2:41pm
Apologies for the tardiness of this month's rodeo.

I'll start with the chart I've been watching most closely -- months of inventory (inverted) in blue, and annualized monthly price change in red:



Months of inventory is now at the lowest level in many years, and as foreshadowed by the above graph, prices have been on the rise.

Zooming in on that month of inventory figure a bit, here are the monthly patterns since 2009.  Last month we were just above 3 months of inventory... compare that to the black line on the prior chart, which denotes the 6-months level above which prices have tended to rise.



Active inventory has continued to drop like a rock, in defiance of the seasonal tendencies of the prior couple of years:



Here's a look at prices.  For the month, the median price per square foot was up 1.6% for single family homes, 1.8% for condos, and 1.8% in aggregate.  Nothing too dramatic, but the price increase has been pretty steady since the start of the year. 



If the Case-Shiller proxy is sending the right signal, the CS index should start to rise more sharply starting with this next week's release:



Until inventory increases, or until something else changes in the economic or interest rate climate, I would expect further upward price pressure in the months to come.

More graphs below...













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Submitted by sdrealtor on July 5, 2012 - 1:34pm.

dz
Not trying to be difficult, just trying to explain how RE is different. If we both own shares of Google we own the same thing and when we sell we sell under similar circumstances. IN RE its completely different. Virtually EVERY transaction is an exception in some regard. The general trends are simply calculations trying to understand numerous disimilar transactions and it is very imperfect.

To answer your question, inventory is low because most owners dont have to or dont want to sell for a variety of reasons. Actually have a CM client looking in CV right now. Bought in the late 90's and house is worth at least double what they paid. Have plenty of equity and income. Gonna keep it as a rental.

Having lots of equity can be an even stronger motivation not to sell than having no equity!

To give you an idea of how the same house can be so different you and I could live across from each other in Del Mar in the same floorplan. One could back to the freeway and one could have a panoramic ocean view. One could be well represented by an experienced local agent and the other by their inexpereinced out area sister in law agent. One could be vacant and easy to show. One could have an uncooperative tenant. One could be getting divorced with a vindictive spouse looking for pain and quick cash. One could own free and clear with a low tax basis and no carrying costs so they wait for best price. One could be turn key and the other full of deferred maintenance.

We could pull up comps and both could be sold the same month with the price being double for one being $1.5M and a 180 day market time while the other sold for $750K in one day. The genral trend would say $1.125M and 90 day market time which couldnt be further from reality.

Submitted by sdduuuude on July 12, 2012 - 12:10pm.

sdrealtor wrote:
dz
Not trying to be difficult, just trying to explain how RE is different. If we both own shares of Google we own the same thing and when we sell we sell under similar circumstances. IN RE its completely different. Virtually EVERY transaction is an exception in some regard. The general trends are simply calculations trying to understand numerous disimilar transactions and it is very imperfect.

Very well put. This perspective is very bothersome to analytical people, dammit.

Submitted by sdduuuude on July 12, 2012 - 12:16pm.

Rich - I have an idea for a new graph for the rodeo. I think it would be interesting. Not sure.

Would be neat to see a plot of the San Diego Median Resale Price/sqft that includes only the current month for each year.

So for July, do June 2000, June 2001, June 2002 ... June 2011, June 2012.

Or, maybe a 2-line graph where one line trends all the Junes and the other trends the 6-month offset: June/Dec in July and Jan, July/Jan in Aug and Feb, Aug/Feb in Sept and March, etc.

Submitted by sdrealtor on July 12, 2012 - 3:43pm.

Yes make each line a different color of the rainbow and bring back the Doug Henning Wallpaper. Thats the ticket.

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