Football and basketball feature exciting fourth quarters.
Real estate sales – not so much.
In Manhattan Beach over the past 20 years, the last 3 months of the year have seen fewer sales recorded than any other quarter. (To be fair, though, based on total sales over 20 years, the 4th is nearly tied with the 1st quarter.)
According to figures from Dataquick, processed by MBC, the percentage of all sales recorded in a given year that were recorded in the 4th quarter averaged 22%
In an even distribution, of course, 25% of all sales would close in each quarter. Both the 1st and 4th quarters averaged 22% over this period.
In the past few years, as our graph here shows (click to enlarge)
, the 4th has been even more of an afterthought. From 2004-2007, the number of sales in the 4th was 20% or less of the yearly total.
Last year, the reason for the 4th's anemic performance was obvious. The credit crunch spooked the local real estate market in a palpable way in late Summer. (The headlines then became too much to ignore.)
It was a big contrast to the Great Spring Rally of 2007, a flurry of sales in the first part of the year, particularly March through June.
Once the slowdown took hold, the percentage of sales in the 4th quarter of 2007 hit a record low for 20 years
. The previous low was 18% in both 1994 and 2004.
We figure some of you are wondering which quarter is best, if the 1st and 4th both average 22%. Over 20 years, the Dataquick numbers tell us that the 2nd is best (April-June, 29%
) and the 3rd (July-Sept.) trails just a bit at 27%
.Why do these data matter now?
So far, 2008 sales in MB are well off pace from 2007. (More on that later this week.) And 2007 was the slowest in 20 years. (See "Slower, Slower, Slower
" [covers 2000-2007] and "Maybe It Can't Get Worse
" [covers 1988-2007].)
Now the credit markets are locked up, banks are failing, Fannie and Freddie have been socialized and some kind of additional bailout related to bad mortgages is taking shape.
If demand craters again in the 4th quarter this year, it won't be a surprise, but in matching it up against another sluggish year (2007) with a horrid 4th, we'll have something to measure against.