The N.A.R. Existing Home Sales for May will be released tomorrow, and no one expects any sunshine. But the NSDCC numbers still look solid, compared to the last two years:
| Year | # of Sales | $/sf | Avg. SP | Median SP | Avg. DOM | Med.SP/Med.$/sf |
| 2009 | $1,220,706 | $770,888 | ||||
| 2010 | $1,020,496 | $800,000 | ||||
| 2011 | $1,153,254 | $850,500 |
But sales are way below the peak – the best May was in 2002 when 392 NSDCC houses sold.
I think the sales are going to drop further in coming months. There have only been 147 detached NSDCC listings marked pending this month, and we’re two-thirds through. The June closings total only 115 so far, but they’re averaging $384/sf.
The market around here has become a rich man’s game. You’d have to be a strong qualifier, and be comfortable with risking big money, to buy with prices at this level. But at this rate, we’re only going to see 100-200 sales per month. With the banks not foreclosing, the only people who must sell are those who need to tap their equity to eat – and there doesn’t appear to be many sellers like that around here.
Nice summary of “housing bottom” info was just posted by Mish/Calculated Risk/etc
http://globaleconomicanalysis.blogspot.com/2011/06/when-was-housing-peak-and-how-far-to.html
Thanks for giving me four minutes of breathing room.
For those who are focused on the local market, I’d encourage you to give my post more weight than the fancy national graphs.
Somebody needs to tap LM on the shoulder to remind him/her that this blog focuses on NCSD.
I read all the way through Mish’s post, and it’s vague, with the summary – we’re closer to the bottom than top.
Nobody is going to call bottom, and I doubt it’ll be obvious.
But around here the lack of quality inventory is the major factor, and how that plays into your own personal equation is worth looking at. If you are picky, it could take years to find a house.
I am still of the opinion that until the sales volumn hits near the historic height we won’t see a bottom. For SDNCC, that’d be around the 2002 figure of 392 units for May.
Sales volumn is a true indicator of affordability. Sluggish sales usually means few can afford at current price point.
Low supply and low demand with Sellers in the driver’s seat. A strange SDNCC stand-off.
It will be interesting when the number of sales drops but median/average prices go up. Look for the U/T article with the number of sales dropping being the headline and increased sales prices in the last paragraph of the story.
LM – Prices are UP in London and Paris!!
Bloomberg had a report last night on London real estate hitting record highs.
NSDCC is not a market. It is an enclave. It would be similar to taking the IQ of the residents of Palo Alto and say that is representative of the average in California city. It is very unlikely that these relatively small areas will ever correct for family income drop. These people are rich by definition. However, in the $600,000 area of California, look out below.
Just like a Mom and Pop jewerly store in Youngstown, Ohio is a lot more likely to go belly up than Tiffany’s on Park Ave.
This blog will be more focused on the enclave from now on.
When I get busy/lazy and include the national articles, it just gives the bears more ammunition to carpet-bomb with their 2.75 theories.
While the overall consumer sentiment might be a factor, I don’t care, because you can read about that anywhere.
You are going to read about NSDCC here, and that’s it.
KD-correct me if I’m wrong, but didn’t a lot of people buy homes during the 2002-06 boom creating very strong sales numbers, while at the same time the affordability index was extremely high (higher number indicates less affordable). Sluggish figures suggest a lack of demand, which can be due to variety of issues, and not necessarily that prices are too high. Psychology is huge as we always see in the building and bursting of an asset bubble! People are really good at buying assets that are too expensive when the market is booming and not buying when the market is fearful and uncertain, but priced attractively. When you see sales figures trending upwards significantly (2002 levels) people are feeling good about the potential payback of owning property and we start building another bubble. Slow and steady growth is a true indicator of a healthy market!
@KER
Agree there are too many factors at work to call sales figures the determinant of a market top or bottom, esp. given how skewed the market has been for the last decade or so. Despite of the fears and doubts, most potential buyers will jump in to buy if the price is affordable and in pace with the wage growth (exluding the stock optioned elite few).
Sales went steadily down year over year from 2002 to 2006 as the price climbed higher year over year during the same period.
Mybleachhouse – My CFO just sold his Chelsea flat last month and could not believe how much money he got for it, even after the drop in value…
we are a relative bargain here in SD if you look at world wide pricing.
Whoa…so I post a link of some interesting opinions, historic graphs, summaries of bloggers that have had an interesting track record on housing….and then…”Get out of here Bear Troll”- actually almost a bit hysterical responses.
No troll was intended….
It amounts to going to a California Water issues forum and posting a link about the Colorado basin and getting flamed for it…..your out of your 2003 minds if you don’t think national RE issues are/will/have been effecting SD values.
It was the four-minute gap between my post and your comment that triggered my response.
It was probably just a coincidence.
This blog has been under attack by people wanting to hijack threads, and I’m trying to keep it under control. Sometimes I let it go, other times I over-react – sorry.
Micro Market it Jim, just like Micro Climates in weather!
Just coincidence- I am on east coast time so I see things pretty early- LOL
One note on the micro/national market issue. The numbers/data on influx/out-migration in SD is important…Meaning, where is the imported talent coming from?
From teh AP article today: Declining home prices have kept people from selling their houses and moving to find jobs in growing areas.
Carmel Valley for example…lots of Indians (with extended family) move in for Biotech positions…are they coming in from India or other markets in the US? Is there a peroperty bubble/crash in India? No idea.