Turns Out '08 Got WorsePosted on Friday, October 3rd, 2008 at 3:43am.
By one dataset (MLS data), 2007 was merely the slowest of the decade. (See "Slower, Slower, Slower.") By another (DataQuick), 2007 was the slowest in 20 years – dating back to 1988. (See "Maybe It Can't Get Worse.")
Based on data from the first 8 months of 2008 – uh oh.
This year is sure to demolish the records for poor real estate sales performance set last year.
(Click any graph in this story to enlarge.)
Look at the MLS data on SFR sales in MB (all areas), and 2008 is down 31%. (Throughout this story we are talking about the number of sales closing in a given month or period.)
Include condos and townhomes, and MB is down 34% from Jan.-Aug. 2007. (We don't have a chart on that.)
The picture from DataQuick is similar, showing a drop of 38% year-over-year.
DataQuick uses a broader series of data, capturing all SFR and condo/TH transactions, including some that never hit the MLS. Thus, while more sales are reflected in the DataQuick figures, the data suggest there were also proportionally fewer off-market transactions in 2008.
We're guessing no one is going to question MBC's projection that 2008 will ultimately lag well behind 2007, but let's just spell out the reasoning.
By the MLS figures, MB in 2008 currently trails 2007 by 80 SFR sales. To reach parity with 2007 sales, 2008 would need to average 20 additional SFR sales per month from September-December over the 2007 figures.
Since sales were unusually weak in the final 4 months of 2007 (26, 18, 13 and 18 in Sept.-Dec.), that almost seems distantly possible.
However, up until now, every single month of 2008 has seen fewer SFR sales (MLS data) than the comparable month of 2007. The highest number of sales so far has been 29 (April and June), so reaching 33 in any coming month – the minimum to exceed one of those final months of 2007 by 20 – would be a real surprise.
In general, the fourth quarter is weakest, as MBC noted the other day.
And, of course, there are other things going on these days that make a pickup in sales seem unlikely in the fourth quarter. (See your newspaper, cable TV station or the internets for details.)
In MBC's more narrow tracking area, SFRs west of Sepulveda, we saw 11 homes go into escrow and stick in September, only one of those (2622 Pacific) after Sept. 15.
That was pretty weak.
In what seems like a recurring theme, more SFR listings canceled in the same month – 15 in total.
The headlines are increasingly full of a different kind of story in some other markets in California. In some more far-flung areas (the Inland Empire in SoCal & in the Sacramento area, for instance), sales rates ticked up in July and August over 2007 levels. And the reasons are no big mystery – vast numbers of foreclosure sales, often half or more of the mix, and prices dipping 30-50% off last year's prices.
Our market doesn't have much of either of those dynamics now, and sales rates reflect that fact.
A word on our sources: The MLS sales figures come courtesy of Kaye Thomas, a local agent and blogger who regularly posts sales figures on her site for anyone to see. The figures from 2000-2006 come from her post here. She provided revised and double-checked figures for 2007-08 directly to MBC after some inquiries. (Thanks, Kaye!)
The DataQuick figures come principally from a dataset purchased by an MBC reader earlier this year and used in several previous MBC stories. Data from March-August come from DataQuick's monthly press releases. Thanks, dear reader!
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