Remarks from page 42 of the C-S May Survey of real estate agents (mostly new-home sales):

Traffic fails to meet expectations.

Buyer traffic came in short of agents’ expectations in May, as our traffic index fell to 20 from 52 in April, short of a neutral reading of 50, pointing to traffic below expectations (readings lower than 50).

70% of agents said traffic was below expectations, 20% said it met expectations, and 10% said it was above expectations.

Prices and incentives stabilize.

Home prices stabilized in May, as our price index came in at 55 (from 69 in April), in-line with a neutral reading of 50, pointing to sequentially unchanged prices (readings greater than 50). 50% of agents said prices were unchanged over the past 30 days, 30% said they increased, and 20% said they declined.

Meanwhile, sellers kept incentives steady in May, as our incentive index came in at 50 (from 39 in April), with readings of 50 suggesting stable incentives over the past month. 78% of agents said incentives were unchanged, 11% said they were lower, and 11% said they were higher.

Length of time needed to sell a home increased – a negative indicator for future pricing trends.

Our time to sell index came in at 25 in May (from 58 in April), falling below a neutral reading of 50, suggesting an increased time to sell over the last 30 days.

50% of agents said the time to sell increased, and 50% said the time to sell was unchanged. We view the longer time to sell as a negative indicator for future pricing trends.

Comments from real estate agents:

  • “The tax credit ended. It helped April, but left May dead.”
  • “The tax credit brought buyers into April, and left nobody for May.”

Standard Pacific and Lennar have the greatest exposure.

Standard Pacific has the most exposure to the San Diego market, as it represents approximately 5% of the company’s sales. San Diego represents 1% of Lennar’s sales.

CS May survey


Here’s a review of SD detached listings from the MLS:

SD Det May ’09 Closings Apr ’10 Closings May ’10 Closings May ’10 New Pendings
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A whopping 4% increase for the number of May closings, Y-O-Y, and it looks like slowdown ahead with May pendings indicating fewer sales in June/July (much like last year). Will it pick up towards the end of summer?

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