The year is not off to a great start here for local RE.
Now that we've got 3 months' worth of data in the hopper, the big picture is getting clearer, and it's: growing inventory, slower sales and price erosion.
MBC's own MB Market Update spreadsheets for the 2-week period ended 3/31/09 can be downloaded by clicking here
, or at any time by using the link in the upper-right corner of the front page.
We'll check in first with our now-obligatory reference to another new record in SFR inventory west of Sepulveda (spanning MBC's 2 years of public market tracking).
We wound up March at 155
SFRs west of Hwy. 1.
That's +10 from the end of February and +58 (+60%)
over the end-of-March figure for 2008. (See the MB Market Update story for 3/31/08
Inventory broke down this way by sub-region:
Overall stats for March: 32
new listings, 15
sales (new escrows) and 8
By those measures, March 2009 didn't look much different from March 2008 (then: 34
But year to date, the picture ain't pretty.
Kaye Thomas has run the numbers from the MLS database, and she's showing both a big dropoff in sales pace over 2007/08 and a huge median price drop YTD for 2009. (See her post, "Manhattan Beach: First Quarter Sales, 2007-2009
Number of SFRs sold west of Sepulveda:
Whoops, 2009 sales are running at 48%
of the 2007 pace, and 20% behind the 2008 pace – while inventory is up 60% year over year. (Factors that are not unrelated.)
Keep in mind, the sales pace of 2007, overall, was the worst on record (20+ years), so dropping from 2007 to 2008 was a bad sign, and a bigger drop to 2009 is even more concerning. (See "Maybe It Can't Get Worse
," regarding the record-low sales pace in 2007.)
One effect you'd expect amid greater inventory and slower sales would be lower prices for the properties that do sell.
That's what you see in MLS median-price data for SFRs west of Sepulveda.
MLS data in Kaye's story show a quick drop of $522k (-28%)
in our sub-market's median price from 2007/08 – when it was at $1.850m
both years – to 2009, when it stood at $1.328m
To soften the blow, we can at least say that the small number of sales in this quarter warrants a yellow flag on those data, even if they are consistent with a theme.
And talk about adding insult to injury, Kaye observes
West of Sepulveda seems to have been hit far harder than East of Sepulveda.
Aw, Kaye, you're saying there's more life
east of PCH?
Maybe next you can go tell someone their kid is ugly.
UPDATE: Kaye's original post gave 24 sales, instead of 28, west of Sepulveda for the Q1 2009, but she has revised it to 28, as she explains in a comment below. Related changes were made in this story.