Confirmed: 2007 the Worst in 8 YearsPosted on Wednesday, September 26th, 2007 at 6:02am.
The two recent focal points of the "all's well" argument have been:
1) This year is pretty much the same as last year, andTo be fair, our more level-headed friends have also said we can't really evaluate the impact of the troubles – i.e., the problems in lending that became undeniable this August – until, perchance, next Spring.
2) Inventory is comparatively low, and with no supply glut, there's no crash.
Fair enough, we can wait.
The bulls and cheerleaders cited data. But, alas, we have data now, too. Data tell a story. And the data tell us that 2007 is already the worst of the last eight. Not all of those were obviously "boom" years.
You're looking at two graphs, the first of which tells us that August was the slowest for closings in the eight-year period of 2000-2007, inclusive. So, "August is always slow," yes, but this year, it was worse than we've seen in a long time.
(MBC has reported here on new escrows/pendings, not closed sales, for August, saying we saw a 50% drop against the average of the prior 4 months. We'll see those results mostly in September's closed sales.)
The second graph shows us that 2007 compares OK with 2006, year-to-date, in that closed sales were almost at the same pace as sales last year – through August. But the 4% lag this year compares to a 12% lag from 2005, and a 21% lag from 2004, and, well, there are no years "worse" than 2004 in this sample. Instead, there are some mighty big boom years.
It's clear now – 2007 will be the worst for sales in Manhattan Beach in this decade. (If you want to be grandiose, you can say "in this century.") The slowdown mostly pre-dated the mortgage meltdown in August. We're not trotting along, exactly, in September.
It's almost too late in this story to give credit where it is, most assuredly, due. Every number you see comes from local realtor Kaye Thomas, who did the research and published it in table form earlier (here and here). MBC, and all our readers, owe Kaye a simple "thanks," at a minimum. (Visit her blog.)
Why would a realtor publish such negative data? Maybe Kaye thinks data don't have an agenda. Maybe she thinks sellers and buyers need a true sense of market conditions to plan their next steps. Let's hope she keeps it up. So thanks, again, Kaye, for a little dose of truth.
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