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Tuesday, November 18th, 2008 at 9:44 AM

Nov-Dec Sales Contest

The purpose for running contests here is to shine the spotlight on specific market checkpoints.  Recent sales have been spectacular, given the economic environment.

No one is suggesting a ‘bottom’, there will be plenty of squishdown ahead.  But I’ve said in the past that if we can make it through a fourth quarter without a 10% drop in sales and price, it would be a good sign.

I think we’re still going to see the 10% price decline in 4Q08, compared to last year, but sales are much improved.  We had almost as many sales last month as we had in October AND November of 2007 combined, and, as of this morning, there have already been 944 closings this month!

The way that the 2008 market wraps up should give us a good read on momentum going into 2009 and the Obama era – let’s keep an eye on sales the rest of the year.

Today’s contest:

Guess the number of closed sales for November and December combined.

I’ll lay out some evidence below, but first the prize for closest guess:

A. Four tickets to a Padres game. (OK, OK, not much of a prize)

B. Six tickets to the Buick Invitational, Feb 3-8 (good for any day)

C. Invitations to the “Birthday Bowl” party - the Super Bowl is on my 50th birthday (2/1/09), so plans are in the works for a combo event (probably at my house, not Tampa). 

Consider the following positive evidence:

1. October’s sales total is usually one of the lowest of the year, in 2008 it was the highest:

 

 

 

 

 

 

 

 

 

 

 

2. Those with hefty down payments are buying.  A review of the first 21 Carlsbad closings in November showed that only two buyers used less than 20% down, and 13 of 21, or 62% used at least a 40% down payment.  Four paid all-cash.

3. The ‘Close-Enough’ syndrome – from today’s L.A. Times, and though it talks about Santa Ana, the same mindset is happening here.  Includes a quote from Chris Thornberg, “Getting to the bottom is different than getting off the bottom.”

http://www.latimes.com/news/local/orange/la-fi-santaana18-2008nov18,0,619872.story

4. There are lots of “bank deals” in the county, but there are areas where there are few or no houses for sale.  For example, the Centex neighborhood in La Costa Valley doesn’t have an active listing, and the Santander neighborhood in SW Carlsbad has had two listings all year (both sold).  Sonata, Santa Fe Trails, the Ranch, and Starboard in SE Carlsbad have all been relatively quiet lately too.

5. The “Obama Effect” could get buyers to “feel better” and improve consumer confidence.

The again, consider the negative evidence:

1. Unemployment could be the final nail in the coffin.

2. Government intervention does nothing but enrich Wall Street bankers.

3. The roughly 11,000 SD properties that have received default notices are joined by probably at least as many who are delinquent 1-6 months, but haven’t received a notice yet. With 22,000 or so bank-involved properties to digest in the coming months, sales could stall just purely based on processing overload.

4. The coming 90-day foreclosure freeze is going to further slow REO inventory, we could see a shrinking sales.  Today’s inventory is 16,862, and according to BMIT the November counts in the last two years were 22,239 (2007) and 19,831 (2006).  With fewer well-priced homes, will buyers keep buying, even if they have to pay a little more?  Maybe, but only for the superior homes, which there are very few for sale.

5.  The “Obama Effect” could have dire consequences if taxes are raised, and the economy tanks.

Here are the combined November/December sales the last few years:

2007 – 3,254

2006 – 4,726

2005 – 5,603

2004 – 6,464

2003 – 6,988

2002 – 6,202

2001 – 5,096

2000 – 5,661

1999 – 5,651

1998 – 5,242

1997 – 4,757

1996 – 3,831

There are currently 5,877 pendings, and 944 have already closed this month – how many more will close before year-end? 

Leave your guess of the total November and December closings in the comments section, and extra credit for justifying your number!

Posted on Tuesday, November 18th, 2008 at 9:44 AM in Contests | 47 Comments » | Print Print You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Reader Comments: 47 Responses

  1. What do you want for your birthday? 50 is a big one.

    The readers should pool cash and get you something nice. I know I certainly appreciate the blog and have learned a lot from reading it daily.

    Chris | November 18th, 2008 at 9:53 am

  2. Chargers in the Super Bowl?

    Jim the Realtor | November 18th, 2008 at 9:57 am

  3. 5021. 50 for your age, 21 for how old you deserve to feel. I know this is “low” but I see a bit of “hold our breath” and failure to list some inventory along with REO failure to close in a timely fashion.

    Giants v. Titans, Giants. Only possible upset is if the Pats (or Dolphins) pull a miracle in the playoffs then it is a mystery.

    Rob Dawg | November 18th, 2008 at 10:05 am

  4. For clarity – this is countywide SFR and Condo ? Or something else ? Per Dataquick ?

    sdduuuude | November 18th, 2008 at 11:18 am

  5. 4874. Random guess.

    FirstTimeRenter | November 18th, 2008 at 11:21 am

  6. 4872. Justification? Dartboard.

    Stephen Waits | November 18th, 2008 at 11:22 am

  7. 5555. Worked for me the last time.

    Mojo | November 18th, 2008 at 11:32 am

  8. These are MLS residential sales, which includes detached, attached, and mobile homes, but not 2-4 units.

    We’ll take the winning total the morning of January 20th, earlier than usual because the MLS is doing a better job of enforcing the rules. If you don’t post your listing as closed within 48 hours they now fine you.

    Jim the Realtor | November 18th, 2008 at 11:37 am

  9. 4100. November 2700, down a bit as I already see some shift in the number of closings in my monitored market due to reduced REO inventory as well as what is I think the beginning of the impact of the stock market decline. 1400 for December, both because it is traditionally a slower month, as well as the greatly reduced number of escrows I’m seeing in the last 3 weeks.

    FreedomCM | November 18th, 2008 at 11:42 am

  10. FreedomCM is a multi-winner, and always in the hunt!

    Dawg said it too, REO closings are likely to encounter turbulence. Countrywide has to have all hands on deck in the loan-mod department, trying to process 50,000 by March 1st. It’s awfully quiet in their REO department these days, can barely get an answer out of them.

    “Countrywide/B of A plans to begin contacting eligible borrowers starting December 1, although only those who are more than 60 days delinquent on their loan will receive first contact. Importantly, the settlement is still disciplined by profit potential on the part of the bank: only loan modifications that will produce revenue greater than or equal to what the banks could recoup directly through standard foreclosures will be considered, while those whose adjusted incomes are above the threshold for qualification also will not be offered modifications.”

    “Keep in mind that loan modifications, under the settlement, are restricted to homeowners who are more than 60 days delinquent on their current subprime or pay option, ARM mortgages that are managed by Countrywide.”

    “Giving the effort teeth, the settlement gives the state officials who sued, including California Atty. Gen. Jerry Brown and his counterparts in Illinois and Florida, the right to void the settlement and reopen the litigation if Countrywide doesn’t modify 50,000 loans nationwide by March 1.”

    Jim the Realtor | November 18th, 2008 at 11:49 am

  11. 5000

    CVman | November 18th, 2008 at 11:52 am

  12. 4409. Because you picked inauguration day for the contest calling date, Obama is our 44th president, and the year will be 2009.

    Kingside | November 18th, 2008 at 12:04 pm

  13. 4609 SWAG

    Just a Broker | November 18th, 2008 at 12:27 pm

  14. Exactly 4000

    doughboy | November 18th, 2008 at 12:30 pm

  15. 4242 – The numbers repeat themselves like:
    Taxes, Seasons and History (which most NEVER seem to learn from).

    Neil Diamond | November 18th, 2008 at 1:17 pm

  16. 4350. Hopefully only half of those are negative cash flow investors.

    mybleachhouse | November 18th, 2008 at 1:22 pm

  17. 4737. Random guess…who can predict anything anymore.

    Lisa in OC | November 18th, 2008 at 1:54 pm

  18. 4321, just for fun. :)

    Kwaping | November 18th, 2008 at 1:57 pm

  19. 3911

    Wes | November 18th, 2008 at 2:02 pm

  20. 3707

    (My old house street number in Sonata)

    Downturn | November 18th, 2008 at 2:31 pm

  21. 3840. Can’t see too many people buying homes when they don’t have a job. I’ll give you my justification if I win.

    Skeptical Buyer | November 18th, 2008 at 2:33 pm

  22. 4050.

    Will it still be the Buick Open, if there is no bailout for GM?

    Smithers | November 18th, 2008 at 2:45 pm

  23. 5683; Price is Right strategy but without being a jackass (wanted to do 5556). Plus BMIT keeps saying we should go back to 2001 prices…so I picked a little higher than that year’s average. I am also going for the Obama effect. Also going on the assumption that those with money will catch the knife a little too soon and in their belief in the Obama effect will buy while they think the deals are still there to be had. As well I was just making an eWAG (educated WAG; that is, educated by this blog and others).

    Keith Rettig | November 18th, 2008 at 3:22 pm

  24. 4949, because you said football, and everyone here (Bay Area) likes the 49ers. Although I’m a Bears fan myself, having grown up in Indiana.

    -Erica

    Erica Douglass | November 18th, 2008 at 3:27 pm

  25. 5800. Knifecatchers are out in force.

    Jakob | November 18th, 2008 at 4:01 pm

  26. 4550 Because that is how much I have left in my 401K. GM will still be in business but barely and the BUICK OPEN will be HOSTED by Tiger Woods. Norv Turner will be fired. Jim TR will still give me golf tickets even if I dont win so I can drink $10 martini’s at the Grey Goose Vodka tent off the 17th fairway.

    OCVulture | November 18th, 2008 at 4:44 pm

  27. 5,950

    Dwalla | November 18th, 2008 at 5:28 pm

  28. Bailout For Builders—Are They Next In Line?
    Posted By:Diana Olick

    ————————————————-

    Home builder confidence has fallen to yet another record low. No surprise there, but in reading the release from the National Association of Home Builders on its sentiment survey, I had to wonder about one particular measure of the index.

    The NAHB breaks the index down by current buyer traffic, current sales, and prospective future sales. Both buyer traffic and current sales fell to new historic lows, but future sales expectations remained the same, significantly higher than the other two. What exactly is making the builders think things will be any better in six months?

    Nathan | November 18th, 2008 at 5:32 pm

  29. Any truth to the rumor that the Winner of the Buick Open wins a new 2008 Enclave crossover SUV and the runner up gets two?

    Rob Dawg | November 18th, 2008 at 6:12 pm

  30. 6666

    Damian | November 18th, 2008 at 7:17 pm

  31. 5259

    Anyone else have smoke coming out of their ears as that Hispanic woman this morning was reading Paulson the riot act on Capitol Hill? She said “Why don’t you give the homeowner’s in trouble some money”!

    Turnack | November 18th, 2008 at 7:41 pm

  32. 4538 – street # of the house I sold at the top of the market.

    JbirdFunk | November 18th, 2008 at 9:24 pm

  33. 5150 (no I’m not crazy). I’ve always guessed under so I’m guessing high this time. I don’t think the October numbers represent the full impact of the stock market decline but the pendings are pretty high.

    Angela | November 18th, 2008 at 9:47 pm

  34. Jim,

    I don’t have a guess but I do have a few questions:
    When is the last time in history when October sales were higher than June sales? The sales trend, as far back as I have been able to research, is fairly predictable. Do you have any theories what is causing this unusual sales pattern? Are the banks in SoCal starting to lend money again? Are foreigners purchasing these properties? Where are these buyers coming from and is this pool of buyers bottomless or is it drying up?

    D Max | November 19th, 2008 at 12:13 am

  35. 4,200

    For the same reasons FreedomCM stated above…stock market losses, job losses (anticipating 10%+ by next August/September in California), and am seeing more BOMs and slightly less looker/buyer activity — though some of this is definitely seasonal.

    Beginning to sense a lot of fear out there that wasn’t there a few months ago, even among the wealthier crowd. Seeing an amazing shift and pull-back in consumer behavior. People are hunkering down.

    CA renter | November 19th, 2008 at 2:38 am

  36. 4129 is my guess

    Chris | November 19th, 2008 at 6:42 am

  37. Damien beat me to my original number, so I’ll go with 6,500. Because of the “close-enough” syndrome and the fact that there will be quite a few well-priced REOs arriving in the coming weeks.

    Simone | November 19th, 2008 at 8:25 am

  38. By the way, does anyone know what happened to housingtracker? They have stopped updating their site. This used to be my favorite thing to read on Mondays.

    Simone | November 19th, 2008 at 8:26 am

  39. 6,138.

    Mozart | November 19th, 2008 at 8:56 am

  40. Mine is based on Prof. Piggington’s stacked San Diego Resale Home Sales Volume chart in this link:

    http://piggington.com/october_2008_resale_housing_data_rodeo

    Looks like Oct, Nov, and Dec usually have the same number of sales. Oct was at 2900. So, I’ll just I’ll double it and back off a little due to Oct. financial upheaval. That gives me 5800.

    I’ll go 5684 just to piss off Keith and punish him for being a nice guy. I’m basicaly taking the “over” on his guess.

    sdduuuude | November 19th, 2008 at 9:50 am

  41. 5777

    Computed via my Proprietary model.

    FSD | November 19th, 2008 at 10:58 am

  42. 3871

    Hal the computer told me so.

    JamesDean | November 19th, 2008 at 10:12 pm

  43. 3776. 3776 = 944 X 4. 4 being about 15 days, and theres about 60 left in the year.

    Neil Stone | November 20th, 2008 at 12:27 am

  44. 5271
    would be higher, but the lack of foreclosures on the market is about the only thing you can quantify.

    Westparker | November 20th, 2008 at 7:59 am

  45. 3,900

    AC | November 20th, 2008 at 9:49 am

  46. 3,011

    Coconutz! | November 23rd, 2008 at 7:54 pm

  47. Hey – when is the guessing deadline on this ?

    sdduuuude | December 1st, 2008 at 2:21 pm

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