Friday, May 2, 2008 at 03:39AM
A Bad March
It looks like we'll be hearing about how great the April numbers were, compared to March 2008. Normally there's a big jump between February and March - there are some years where the increase is more than 50%.
But this year March was slow out of the gates, just a 14% pop between February and March, and then a 33% improvement between March and April (I added 77 late-reporters to April, the same as we saw last month).
SD County Monthly Closed Sales - Detached
| Year | Feb | Mar | Apr | 3 mo. Total |
| 96 | 890 | 1578 | 1654 | |
| 97 | 1215 | 1585 | 1784 | |
| 98 | 1365 | 1957 | 2268 | |
| 99 | 1627 | 2351 | 2343 | |
| 00 | 1423 | 2310 | 2065 | |
| 01 | 1434 | 2069 | 1949 | |
| 02 | 1855 | 2477 | 2408 | |
| 03 | 1724 | 2161 | 2397 | |
| 04 | 1802 | 2456 | 2738 | |
| 05 | 1560 | 2290 | 2550 | |
| 06 | 1312 | 1988 | 1812 | |
| 07 | 1196 | 1618 | 1590 | |
| 08 | 965 | 1096 | 1461 |
We're just 15% behind the 3 mo. count for 1996!
Jim the Realtor
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Reader Comments (8)
Woo-hoo! Just watch, this market is going to turn on a dime any second now, and all of us fence sitters will be sorry.
By the way: I notice an explosion of short sales lately - how long does it take on average for those to give up and finish going through the foreclosure process?
Well, Feb -> Mar sales were weaker in 08 than most years, but look at Mar -> Apr. It jumped by 357!
That is the strongest of any of the years shown, and Mar -> Apr actually went DOWN in 99, 00, 01, 02, 06 and 07.
To me, this says that the spring bounce just got off to a late start. With all the rain we had earlier, I strongly suspect it was weather related. Nothing more, nothing less.
JB
I follow your logic but the bottom line to me is April of 08 is below April of 07 and for that matter all other years. Add to that the well documented delays in banks pushing through pending REOs, the continued tightening in lending (which in my view really only began in Decebmer) and the recent news on accellerating price declines, I really don't feel that the positive trend means May will come above May of any of the previous years.
Of course I realize that your comment has a bit of sacrasim but just wanted to point out that IMHO the real meaningful stat is YoY comparisons, not MoM.
The weather! Puhleeze. Actually, my Q1 guess of 3527 works perfectly for Feb-Apr so there may be something to the delayed spring season. Doesn't matter. People keep looking at these events as cyclical, if extreme, events. That's not true. There has occurred a clean break with the previous bubble market. The post bubble market we find ourselves in has entirely different rules. Rules we are still learning. CA DoF reports SD County gaining 1.5% population. IMO probably the last significant gain for many years. If you are a "traditional" seller the closed sales isn't relevant. Too many are just not traditional sales. There may be "only" 8 months of inventory but that conflates two different markets.
If this is correct this means SD is down to only 13 MOI. People better get in their soon, before the inventory disappears. What is keeping all the Realtor(R) investors from buying at these firesale prices?
The question is whether REO sales lead to more REO sales. Yes, these sales do help prop up volumes, but they also cause price declines to accelerate. As prices fall they put more borrowers underwater, and that forces yet more REO's. When does this dynamic end? IMO, when cash rental yields provide a juicy risk premium. I think 7-8% cash yields would suffice, and we're probably at around 4.5% now. High cash rental yields are important because they signal that, for new buyers at least, renting becomes more expensive than owning. A "risk premium" is needed for new buyers to offset the probability that home prices will fall further.
REO / Short Sale Prevalence Reaches 63% in San Diego
WOW, SD is screwd up totally, OC is next
http://calculatedrisk.blogspot.com/2008/05/reo-short-sale-prevalence-reaches-63-in.html
I am really surprised how deep it can go...I supposed that investors will go for short sales like predators, but it doesn't seem it's happening now. I am dealing Vancouver houses and here it's pretty balanced, after every small slowdown there is small price drop and immediately there's little wave of increased investing. But every market mechanism is vulnerable...