Double-Dip Feeling

by | Jun 25, 2010 | Double Dip, Graphs of Market Indicators, Market Conditions | 23 comments

Sellers, and their listing agents, have been manufacturing the double-dip experience.

Because the local real estate market had the illusion of being “healthier”, they figured it was time to push their list price to see what the market would bear.    A few got lucky and sold too, but the backlog has been building all year, especially on the higher-end. 

Buyers are paying close attention though, and you can see it in the trends below on the housingtracker.net graphs.  Look at the last year, the only part that might matter to buyers. 

Let’s be specific too – in the upper tier the graph shows that the median asking price was going down dramatically the second half of 2009, which could indicate that prices were actually going down, or that the mix of active listings was adjusting.  A review of the mix didn’t show any remarkable differences, so most of the decline must have been due to actual price reductions:

Look what’s happened since February, when sellers started getting (overly) confident again.  The collusion of higher pricing didn’t impress the buyers, and inventory has increased 30% since January, meaning that the number of wrongly-priced homes is rising:

Once the sellers (and their listing agents) who want/need to sell, begin to run out of hope and start lowering their price, it’s going to look and feel like the double dip.

A second note:  The inventory between May, 2009 and January, 2010 was practically flatlined, in a tight range of 11,500 to 12,013.  With list pricing adjusting steadily downward in the upper tier, we had fairly stable market, with listings exiting the system at an almost identical pace as they were coming on.  A good indicator to watch for the trend of pricing accuracy.

 

Shiller on Double Dip

by | Jun 24, 2010 | Actives/Pendings, Double Dip, Thinking of Buying?, Thinking of Selling? | 26 comments

Shiller starts at 1:45 of this video, and lays out two historical examples to counter the 2% to 3% improvements predicted by most professional forecasters:

Let’s look at the most recent stats for North SD County Coastal detached homes, under $800,000:

Status # of $/sf DOM
ACT 343 $329 61
PEND 183 $312 42
SOLD 86 $306 55
SOLD “09 85 $285 62

The solds are those that closed between May 24 and June 23, and include the double-dippers, those that could have qualified for both the state and federal tax credit. The actives-to-pendings ratio was most noteworthy, given that those not closed by now could miss out on both tax credits, yet it’s still better than 2 to 1.

Over $800,000 (ineligible for federal tax credit)

Status # of $/sf DOM
ACT 1,019 $639 108
PEND 186 $397 78
SOLD 99 $415 81
SOLD “09 78 $429 74

The above-$800,000 market is where the insanity continues, though the demand has been stronger than last year, comparatively. The silly season should be wrapping up over the next couple of weeks, and those sellers who really want/need to sell, will have to get off their price if they want to close this year.

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