Another Poor Quarter

Posted by Dave Fratello on Monday, April 7th, 2008 at 5:58pm.

You might feel a little ripple of optimism creeping into the MB market these days. If so, it's based on looking forward, not looking back.

Now that March has closed, we can see that there was virtually no change in SFR sales activity in MB between the horrid 4th Quarter of 2007 and the 1st Quarter of 2008.

When we look at the whole decade, the 1st quarter was much worse, compared with other 1st quarters, than Q4 '07 was compared with other 4th quarters.

As measured by SFR sales closing in these periods, Q1 2008 saw 1 less sale (48) than the previous quarter (49). (Our closed-sale data come from the MLS and include SFRs in all of MB, not just west of Sepulveda. Our source is Kaye Thomas' blog, where she has posted data going back to 2000.)

Both quarters were the worst of the decade, but Q1 sales were much weaker compared to the first quarters of prior years:
  • Q1 2008 sales were 54% lower than the next-highest total (2006).
  • Sales in the weak 4th quarter of 2007 were just 25% lower than the next-highest year (also 2006).
This makes the sluggish 1st quarter seem all the more a shock.

It's no big surprise how we got here:
  • A slow 4th quarter for local RE sales, continued economic uncertainty and tight mortgage credit.
  • A January with 13 sales, whereas prior years in this decade had ranged from 30-63 sales in the same month. (See "Off a Cliff in January.")
  • A February with 15 sales – the total had ranged from 29-55 in the same month from 2000-07.
Like the months that came before, March saw the fewest closed sales of the decade, about 50% or less of the sales totals in many of those years.

It's worth noting that 2007 rocketed ahead in March, with closed sales totaling 50 that month – touching a peak hit in March 3 times previously in this decade. In other words, last year, March was more "normal" than not, at least as the 2000s go.

This year, March helped to define the new normal – anemic sales that require a look further back into the slump of the 1990s, or earlier, to find proper points of comparison.
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