We'll take one more look at data through the end of the third quarter 2018 here.
You might ask: What occasions all this number-crunching, Dave?
Answers:
1) Been here much? We do this. For about 11 years running.
2) You may need this data.
3) There's a buzz in the media and in our networks about the…
We'll take one more look at data through the end of the third quarter 2018 here.
You might ask: What occasions all this number-crunching, Dave?
Answers:
1) Been here much? We do this. For about 11 years running.
2) You may need this data.
3) There's a buzz in the media and in our networks about the real estate market getting weird or slow (or both), and we're trying to figure out if that's true.
Spoiler alert: The newest data runs here also fail to corroborate the buzz and media spin. We simply don't have whole-market data showing a slowdown.
But if a slowdown is coming, or under way, we'll have some data markers from this point in time to look back at and and use for comparison's sake.
OK, maestro, thanks for the drumroll.
It's now time to look at Days on Market.
If the typical number of Days on Market for homes for sale in Manhattan Beach is rising, this could be a leading indicator of a change in the wind direction.
We've already discussed how the median price for homes in Manhattan Beach has continued to rise.
We've noted that pending sales in Q3 2018 bested Q3 2017.
And we showed that while the number of closed sales so far in 2018 is lower than the total for "sugar high" 2017, it's still the second-best of the past 5 years.
But then, inventory has run lower this year than 2016-17, so there are fewer homes to buy (and close).
That's hardly a picture of a weird or slow market. But the chatter must be coming from somewhere with some reason, right?
If DOM is up, maybe the market will gradually head down.
But folks, that's not what our data are showing. Not yet. DOM is not up.
Our first chart above portrays the median Days on Market for homes listed for sale in Manhattan Beach during the past 5+ years. The big, thick green line is the smoothed-out figure using 12 months' worth of data at each point. For most of a year, these data show, we've been humming along with about a 20-day median DOM figure. (That means half the houses on the market have been on longer, while half have been listed for less time.)
These 20-ish figures are the low point on the chart, half the level seen as recently as 2-3 years ago. That's good!
Yes, a data set this big (12-month rolling data) will tend to turn slowly, like an ocean liner, so if DOM began rising very recently, you wouldn't see much in the big green line.
The thinner, paler green line is jumpier because it uses a 3-month rolling median. This is a little closer to real time. (You don't want to see the adderall chaos of the 1-month line.)
Even then, though, with the 3-month pool of data, you see our medians for DOM for 2018 being much lower than almost anything else on the chart.
For perspective, let's go big.
We have a 10-year chart!
Look down in the far, lower right corner. That's our market now.
Note that we had to raise the y-axis from 60 days to 90 days on market just to fit the years before 2012.
The chart tells you this: We're comfortably cruising at a very low figure for Days on Market.
If DOM doubled, still we'd be perfectly in line with some of the hottest years (and biggest price hikes) in the Manhattan Beach real estate market.
Over these next several weeks, we'll carry a canary into the coal mine. If we see something, we'll say something. [Possible mixed metaphor – Ed.]
Let's check in on one more front, inventory.
One angle we'll look at is recent data on new listings.
In Q3 2018, as this new chart shows, fewer sellers brought their homes to market than in any of the previous 3 years.
At 103 new listings, we're short of 2015's pace by 4 listings, and down 20 listings from "sugar high" 2017.
It's kinda funny that fewer people chose to sell during this period, because there were apparently more buyers.
Our data on pending sales during the same period showed a jump of 12 new deals over Q3 2017.
But, what's lingering?
That's an inventory question.
We took a snapshot of total inventory as of Sept. 30 (the end of Q3) for each of the past 6 years. (All of these data are drawn from our twice-monthly MB Market Updates.)
This is the first time you start to see 2016-2018 looking not quite as good as the earlier years of this rally.
Oh boy, 102 listings at the end of Summer.
That's precisely equal to the number for 2016, and down almost 20% from last year.
Sure, we have more overhang throughout these past 3 years than was seen in 2013-15, some of the very hottest years in the Manhattan Beach market. Homes would have been literally flying off the shelves in that period, if there had been shelves large enough to hold homes. Everything sold, and quickly.
But remember where we started out in this quest.
We are looking for data, or other evidence, that our local real estate market has slowed down or turned weird recently.
It may come. We've had 8 years of an up market. It won't last forever.
But numbers do not tell the story that we keep hearing.
We're open to anecdotes, alternative data or other projections. Sometimes, maybe it's just "a feeling" that the tide has turned.
Wouldn't you want to know?