September 2009 Resale Data Rodeo

Submitted by Rich Toscano on October 11, 2009 - 12:41pm

Some have asked what distinguishes a Data Rodeo from a Chartfest or for that matter the rarely seen Chart Extravaganza. The answer, which I will fabricate as I type this sentence, is that Data Rodeos are reserved for the monthly roundup of resale data, whereas the two alternate names are used for generic chart collections based upon the levels of extravagance and general chartiness contained therein.

I hope that clears everything up.

Prices

The rally in San Diego's median price per square foot continued through September, with the ppsf rising 2.2% for detached homes, 5.5% for (much more volatile) condos, and 3.1% for a volume-weighted aggregate.

The aggregate median ppsf has risen 14.5% since its March low.

Here is the plain vanilla median, far less useful for reasons often discussed, but still included here because the MSM makes a big issue of it. Interestingly (ok, not really), the vanilla median has been pretty flat for a few months running.

Here is the projection for the August and September Case-Shiller index values based on the detached home median ppsf.

This is the number we should compare to past bear market rallies in the Case-Shiller index. From this series' April low point, I am estimating that the Case-Shiller index for September will have risen by 8.8%. This is far in excess of any rally during the 1990s bust, the biggest of which was 2.3%.

Sales and Inventory

The supply and demand situation was similar to what we've seen since spring. Sales volume was decent and ran slightly over last year's pace:

...whereas inventory was flat and substantially below last year:

...leading to a very low months-of-inventory figure:

Also, a substantial portion of listed inventory was "reverse-shadow" contingent inventory that isn't really available for sale. The prevalence of contingent inventory has been steadily creeping up since I started tracking it in June. (See this article for an explanation by our own urbanrealtor of what contingent inventory is all about).

Conclusion

This is no typical seasonal bounce; it seems that whatever downward pressure is exerted by unemployment and foreclosure activity is being more than offset by government intervention and more or less reasonable aggregate valuations. There are potential threats down the road -- shadow inventory, rising rates, and the surcease of government intervention leap to mind -- but those all lay in the future, if they are to happen at all. For now, until the evidence shows otherwise, we are in rally mode.

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Submitted by an on October 11, 2009 - 11:59pm.

Very interesting that PPSF is going up while vanilla median is flat for the last 3 months. It would be very interesting to see if this bounce have any steam for the next 3-6 months.

Submitted by GH on October 12, 2009 - 9:00pm.

I think you can already see the flattening on this chart. The 8,000 tax credit is going away, and I believe getting in on this drove the housing market to a big enough degree to create a small spike. Next month downward trend continues as before. There is no reason prices would climb right now.
My $0.02

Submitted by CA renter on October 13, 2009 - 1:19am.

GH wrote:
I think you can already see the flattening on this chart. The 8,000 tax credit is going away, and I believe getting in on this drove the housing market to a big enough degree to create a small spike. Next month downward trend continues as before. There is no reason prices would climb right now.
My $0.02

Agree that the $8,000 tax credit drove much of the buying. I've heard it myself from almost every single person we've met who have bought this year.

Another thing we have to wait for is higher interest rates -- what some of us bears have been waiting for for YEARS. Maybe we will reach a point where the Fed will lose its ability to manipulate the interest rates as they've been doing -- very successfully, I might add!

Submitted by pemeliza on October 13, 2009 - 3:34am.

"Next month downward trend continues as before."

I think the next couple of months will be slow for sure. A buyer isn't going to jump unless they find an awesome deal. I have been tracking Poway all year (glad I didn't end up buying there!) and it seemed that the same stubborn sellers refused to except reality all year. Now the inventory seems to be suddenly spiking there (why do so many sellers list their homes in October??) and these same sellers that could have gotten out at a reasonable price this summer are now behind the 8-ball.

The near term fate of the housing market recovery now rests with the government. I still think they will extend the credit and interest rates will stay low. Regardless of what they do, the high end has another leg down (especially in areas like Poway).

Submitted by temeculaguy on October 15, 2009 - 10:24pm.

Next month's chart wont go down even if the expiring tax credit had something to do with the rally. The charts are behind a few months, Rich changes the color to yellow on the end to show the estimate based on an average of the preceding months. The transactions/or lack of transactions in October, wont hit the charts till the New Year, and based on the all the stories from the buyers, the slowdown hasn't started yet. It may start to decline tomorrow, who knows, but I'd bet you a nickel that next month's chart doesn't show a return to declines, the charts are always behind, it's just not calculated like stock prices, if stock purchases had a 45 day escrow period to buy them, then it would be behind too. Well at least the case shiller will be behind.

Submitted by an on October 15, 2009 - 10:39pm.

I know a few people who are actively looking to buy right now and they all are complaining of lack of supply. Anything that's reasonably priced show up, there are 5-10 offers w/in the first few days. They are definitely frustrated. They're being flat out rejected w/out even a counter for highest best, even when their offers are at/above asking. All of this in the middle of October.

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