When I say, “the inventory is thin”, it really means that the demand for good-looking-properties-that-are-priced-reasonably is healthy. While that would seem obvious in any market, it is worth repeating when all you hear is how bad the real estate market is from the mainstream media.
We have also seen that there is a relationship between inventory and sales/pricing.
When there are fewer houses on the market, buyers feel pressed to gobble up the ones that are available – and end up paying whatever it takes. Flash back to 2003 to remember the max-frenzy conditions!
Here are the comparisons of the total number of detached listings/number of solds between January 1st and October 31st in North SD County Coastal (La Jolla to Carlsbad). There isn’t a direct connection between them – some sold this year were listed last year – but the TL/S-ratio trend is worth watching:
|Year||Total Listings||Solds||TL/S Ratio|
This year we’ve had the fewest listings since 2000, and more sales since 2007, the height of easy financing. Yet the balance feels relatively healthy, and like the old Jim Ratio of actives-to-pendings, I think we can say that a 2.0 TL/S-ratio is about right.
(For those with MLS access who are checking, because Sandicor deletes withdrawn listings from previous years, I deleted them from all years – there were only 211 this year. The expireds and cancelled listings are included.)
While it feels like there are very few good deals available, does it mean that there has been pressure on pricing lately? Let’s compare detached sales and pricing in the same January 1st-to-October 31st period of this year, to last year:
|Town or Area||Zip Code||Sales 2010/2011||Avg $/sf 2010/2011|
With the exception of the Del Mar explosion, those numbers look as steady as possible.