Giving '07 A Run So Far

By Dave Fratello | August 10th, 2010
You remember the spurt of enthusiasm that greeted this Spring's rally in the local RE market.

Some said that a recovery of sorts had begun in the 3rd quarter last year. By February this year we were seeing quick sales, multiple offers, all kinds of brightening. (See "Front-Line Views of the Rally," from early March.)

The market seemed busy, but how many homes were actually selling, compared to prior years?

Now we can see that MB has so far outperformed the dismal 2008 and 2009, but hasn't yet returned to the levels of sales seen in 2007.

We're certainly not yet in range of 2006, arguably the last serious bubble year.

Our chart here (click to enlarge) displays closed sales in the first 7 months of each of the past 5 years. This is as close to up-to-the-minute as you can get – we considered looking only at the first half of the year, but opted for currency over a more traditional half-year snapshot. (We'll look at sales by quarter separately.) Source for this data is an MLS search of closed sales during the subject periods; of course, closed sales typically occur at least a month after buyers and sellers reach agreement, so this measure slightly lags real-time market activity.

If things felt busier this year than last, that's because there were 40% more sales than last year. Yes, that'll get almost anyone's pom-pons waving.

Context is somewhat more sobering – we're 14% behind the pace seen in 2006, and we're still lagging 10% behind the pace set in 2007, a year that, when it wrapped, had been the worst of the decade locally. (See "Slower, Slower, Slower" for more on 2007 in context. MBC actually asked in that story, "Is this a slump?," not realizing how bad the next 2 years could get.)

The story of where this moderate recovery has taken place is somewhat surprising. (Click graphic to enlarge.)

The Sand is basically flat for 3 years running, the Trees are climbing after one notably bad year (2009), but it's the Hill Section that rocketed this year.

The Hills are the only place where we saw SFR sales this year exceed the pace set in any of the 4 prior years – 28 sales is actually 25% higher than the 21 seen in 2006, not to mention more than double last year's total. We've checked and the 2010 stats look legit. Bravo Hills!

As to the Sand, we still can't figure why, with global warming, people don't want to live at the beach. OK, we kid, but something is up, and it's not the sales pace. SFR sales in the Sand in 2006-07 were at least 25% higher than the pace of the past 3 years.

The Trees are Old Faithful. Plenty of 'burbs, an interesting mix of newer construction with some smaller, older housing stock that's made an attractive entry level recently, absent builders snatching lots. The pace this year is 13% off of 2007, but it looks more "normal" after an awful 2009.

In sum, so far this year, MB hasn't yet reached the pace set in our first post-bubble year, 2007, but we're giving it a run for its money.

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