The NAR Pending Home Sales Index was released today. They reported a 30% decline in May pendings (vs. April) and it didn’t even garner it’s own post at Calculated Risk, so either nobody cares about what’s coming out of NAR (most likely), or the drop was expected.
The index is a national reading, how are we doing in San Diego County? Here are the detached closed sales for SD County:
| Month | 2009 | 2010 |
| April | 1,997, $215/sf | 1,865, $248/sf |
| May | 1,992, $225/sf | 2,150, $252/sf |
| June | 1,949, $227/sf | 1,789, $258/sf* |
| Totals | 5,938 | 5,722 |
*June, 2010’s number of sales will probably increase 10% or so, due to late-reporters.
Compared to last year, the demand looks steady, even with average square-foot costs up about 10%. The tax credits probably helped, but now that they’re over, can we get a better feel for what’s coming?
Here’s a look at the current detached pendings.
Those from last year have closed, while about half of this year’s numbers are still pending, and subject to fallout (20% to 25%?). But the 2,392 listings marked ‘contingent’ (short sales) are not included, and should pick up the difference, so I think we can make some decent comparisons. These are detached listings grouped by the month they were marked pending:
SD County Detached Pendings
| Month | 2009 | 2010 (# closed already) |
| April | 2,123, $217/sf | 2,334, $256/sf (2,019) |
| May | 1,947, $237/sf | 1,814, $262/sf (1,039) |
| June | 1,931, $238/sf | 1,998, $240/sf (214) |
| Totals | 6,001 | 6,144 |
Only 315 of April’s remaining pendings are still eligble for the fed tax credit, and none of these will get state cheese. The local detached market has been resilient!
Once you add in the contingents, this summer’s closings are shaping up to be stronger than last year, without the tax credits, and in the face of unemployment, economy, etc.
The inventory is on the rise though, according to housingtracker.net, which is probably more due to so many over-priced turkeys (OPTs) not selling, than anything else. Expect that to continue for a couple more weeks before we see the motivated sellers quicken their pace to the exits:
| Week of SFH+Condo | Inventory | 25th %tile | Median | 75th %tile |
| 2010-06-28 | 16,501 | $249,000 | $398,000 | $689,900 |
| 2010-06-21 | 15,208 | $249,900 | $399,000 | $699,000 |
| 2010-06-14 | 16,111 | $249,000 | $395,000 | $680,000 |
| 2010-06-07 | 15,190 | $248,000 | $395,000 | $695,000 |
| 2010-05-31 | 15,730 | $248,000 | $395,000 | $690,000 |
The inventory rise/fall is measuring the list-price accuracy. There are plenty of buyers who would like to take advantage of the sub-5% mortgage rates, and if sellers can live with just a little less, we will have a very productive third quarter (might be a big ‘if’ though).
JTR – I just did some #’s last night and am seeing days on market start to really accelerate upwards in the higher end neighborhood we have discussed.
+/-$2.0mm+ inventory rising, sales slowing, squishing resumes…
The closings average apx 65 days for the year so it goes to show if you price right, it moves, and if it is still around over 70+ days then don’t waste your time until they drop it big.
The active listings average well over 90 days indicating high pricing for the quality of the home compared to the sales times. I even took out the homes with over 350 days on market as they just skew the figures and are a waste of energy.
It’s the biggest “if.” Same scenario as my coworkers with their stock options and espp: they would rather watch the value fall to zero rather than concede to selling at 10% below peak value, even though they bought it at a fraction of the current value. Why anyone would lower their price right now is beyond me, unless the need to do so was dire, with the gov still throwing trillions at the market. Without forced liquidity prices will not fall in the current market.
I also notice low end, marginal neighborhood flipped houses sitting for much longer. I still think 300k for a nice house in a horrible neighborhood is way overpriced. Great detailed honest info as always Jim.
Without forced liquidity prices will not fall in the current market.
Prices are set at the margins, therefore “forced liquidity” should be the rule of the day given that only those that need to sell will be selling. Which leaves pricing only subject to supply constrictions, and those appear to be loosening up a bit.
Have to see how the end of the bear market rally affects mass psychology, too.