More on March '07 Sales in MB

Posted on Tuesday, May 1st, 2007 at 9:14pm.

Last week's headlines referenced a nationwide drop in sales of existing homes – "used" houses, as opposed to new construction. Sales fell 8.4% between Feb. 2007 and March 2007, the biggest month-to-month drop since 1989.

The LA Times wrote this up in appropriately somber terms, noting that the drop in California was comparable at 8.1%. Despite stable prices so far, the story noted:

[E]conomist Leslie Appleton-Young of the California Assn. of Realtors [said,] "For the first time in the last 10 years, we forecast a softening in the median home price." [emphasis added]

Apparently it's not just "bubble bloggers" who think prices are headed down.

A sunny note of optimism came courtesy of Shorewood Realtors:

However, those who are less sensitive to prices are still spending freely, said Michael Collins, general manager of Shorewood Realtors in Manhattan Beach. Gross sales at his brokerage were up to $432 million in the first quarter from $425 million a year earlier, Collins said.

"Generally speaking, it's great here in our area and [it] continues to get better," he said. "A lot of our buyers are immune from the economy."

The average South Bay home sale handled by his brokerage is $1.25 million, Collins said. Buyers are typically in such businesses as investment banking, entertainment and law. [emphasis added]

You can't dispute Collins' opinion if his office has seen an increase in sales volume, nor can you dispute the fundamentals he's talking about. Taking a look at Shorewood's data for a fairly large region we know informally as the South Bay (its imaginary borders are flexible), one sees why Collins exuded such confidence. Shorewood's lede:

Following a robust 28.6% jump in February, home sales rose another 23.3% during March in the cities of El Segundo, Manhattan Beach, Hermosa Beach and Redondo Beach, with 222 homes changing hands in the four cities compared to 180 last March and up from 127 the previous month, according to the monthly Shorewood Report.

To see how MB fared, we asked Shorewood for data from 90266 specifically. Happily, they obliged (hat tip):

__________________March 07___March 06

Homes for sale_______121________ 154

Homes sold__________ 58_________ 53

Sales pending________ 51_________ 39

Average asking price_$2,112,000__$2,076,000

Average sale price___$1,804,000__$1,794,000

Median sale price____$1,640,000__$1,625,000

Average price per s/f___$689 ______ $789

Average days on mkt.___ 62_________ 45

Months of inventory

based on closed sales___2.1_________ 2.9

These data do paint a reasonably rosy picture. Lower inventory, higher sales and pendings, very slightly higher sale prices (median and average).

Small drags: a 25% increase in average DOM and, more significantly, a 12% drop in the price per square foot. That's a measure of pricing that cuts through many other confounding factors that make comparisons difficult.

On balance, Shorewood seems to be right to say the first quarter, and March in particular, was hunky dory for MB. Now, about that Spring Bounce...