The new year is barreling down on us, and before you know it we’ll be in the ‘spring-kick’ season. How is it looking so far?

I want to update the previous stat check from a week ago – it wasn’t balanced due to fewer business days/more weekends.  Let’s compare the first 15 days of January, that way every year will have two weekends included, instead of the previous Jan. 1-11 comparison.

We can refer to the 2003-2007 period as the ‘steroids era’ of mortgage lending, and consider those stats hyped up.  All years are included below:

January 1-15

Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Closings 125 103 78 86 90 108 100 65 71 36 46 61
$$/SF $273 $264 $304 $262 $310 $422 $471 $502 $521 $494 $410 $368
DOM 71 107 41 77 69 81 62 72 89 67 80 84

You can see a historic timeline just in these numbers. In 1997, Bush passed the $500,000 tax exclusion for couples who owner-occupied for two-out-of-five years, and by 1999, the specuvestors were flipping houses. They lost some steam after 2001 because the thrill was gone after the second move, and buyers were drying up, right in line with the usual 10-year real estate cycle – in fact, a downturn was overdue.

About then there was an audible gasp from the Calabasas area, and the next thing you know CFC was flooding the streets with neg-am mortgages – and by 2003 the market took off like a rocket. So let’s call the 2003-2007 period the ‘steroids era’ of mortgage lending, and not use those numbers for comparison.

Instead, let’s look at the 1999-2002 era as at least being more normal than any year since (but in reality we haven’t had a normal year around these parts since 1985!). In 1999, the flipper tax exclusion helped to boost sales, plus the interest-only mortgages were the loan du jour – and both are still available today. In addition, we have much lower rates, and higher loan limits today, so let’s at least call the 2010 market, ‘semi-juiced’, and compare to the 1999-2002 era which had some juice to it too:

Year 1999 2000 2001 2002 4YR AVG 2008 2009 2010
$$/SF $273 $264 $304 $262
$494 $410 $368

So we’re not quite back to turn-of-the-decade numbers, but there is a slight resemblance with the number of sales. Could we call it ‘close-enough’, just because the ultra-low inventory is impeding sales? What are other factors? The number of sales should be higher once the late-reporters wrap up, that usually adds 10%. Currently there are multiple offers on every decent-priced listing today, and if it weren’t for the graft and corruption among agents, there would be more sales at higher prices, probably at least 70-90 sales for this period. But the price has to be right – look at the disparity between active and pending listings in North SD County Coastal:

1,124 Actives: LP=$680/sf, 121 DOM

289 Pendings: LP=$375/sf (x 95% = $356/sf SP), 71 DOM

There shouldn’t be any fear of additional foreclosures, in fact; the more, the better. They are the best chance of finding more reasonably-priced homes that you can buy!

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