MBC began publishing inventory tracking data for our territory (SFRs west of Sepulveda) in March 2007. To hear the pros tell it, we began at a time when inventory was already fairly low, and there’s been little bounce up since.
For instance, MBC noted just last week that inventory in our area was at 68 at the onset…
MBC began publishing inventory tracking data for our territory (SFRs west of Sepulveda) in March 2007. To hear the pros tell it, we began at a time when inventory was already fairly low, and there’s been little bounce up since.
For instance,
MBC noted just last week that inventory in our area was at
68 at the onset of Spring (late March), and
77 (+9 or +13%) at the end of Summer (August 31).
Three sources indicate that
inventory is down about one-third now from a year ago:
- A commenter on MBC posted Trendgrafix data saying that last year “at this time” (no specific date) there were 174 active SFRs in all of MB; while there are 118 on the MLS now. That's a 32% drop.
- MBC also has some archived data snapshots via ZipRealty to compare Sept. 2006 with the present, and those show a 33% decline in listings in all of MB. (Our rough tracking then wasn't limited to the regions west of Sepulveda.)
We're going to conclude, then, that the number of listings
really is down by at least 1/3rd since last year.What does that mean? Is lower inventory a bullish or bearish sign?Certainly, one obvious way for a bear market to break out is for supply to greatly exceed demand.
There are lots of RE markets in California and the Southwestern U.S. that are obviously in trouble, using the bloated-inventory standard. A remarkable website, “
Bubble Markets Inventory Tracking,” features data going back to January 2005 for many markets. Click on the links below for the details, but MBC offers highlights:
Phoenix, AZ (metro/region)
9/05 – 18,799
9/06 – 54,629 (+190%)
9/07 – 63,639 (+17%)
Riverside County, CA
9/05 – 12,793
9/06 – 26,597 (+108%)
9/07 – 31,804 (+20%)
Las Vegas/Clark County, NV
9/05 – 14,289
9/06 – 24,300 (+70%)
9/07 – 30,881 (+27%)
Sacramento, CA (metro/region)
9/05 – 10,177
9/06 – 16,668 (+64%)
9/07 – 17,835 (+7%)
San Diego County, CA
9/05 – 16,081
9/06 – 22,710 (+41%)
9/07 – 23,358 (+3%)
In MB, we're going the other direction.
Another way to gauge the relative balance of our market is to look at whether new inventory is being absorbed by demand. Using MBC's inventory data, we can say that over the 5-month period of Spring and Summer, we’ve seen
124 new listings come out,
94 sales (new escrows) and
23 cancellations.
That means new supply outstripped demand by 30 homes. However, the 23 cancellations leaves us at only +7 for the period. We've already remarked that, based on these numbers, supply is not obviously out of balance with demand. The absorption rate in those other markets above is terrible.
MBC still smells something bearish in the air, particularly after the mortgage mess hit in August. It's certainly possible that declining supply indicates fewer "discretionary" sales – particularly move-ups within MB. Anecdotally, move-ups were once common, but not so much now.
We've noted before that if the
wave of ARM resets (and recasts) is going to hit our market like it has other markets, we're more likely to be seeing that in 2+ years in the form of forced sales. Longer rate locks and I/O periods for higher-quality borrowers in MB would be the simplest explanation for why even over-stretched borrowers could put off the pain.
Of the 118 actives today in all of MB, 29 are in the stalled Tree Section $2m+ market, where we have long droughts between sales. In the last few weeks, we've seen few sales under $2m. If inventory is going to balloon against faltering demand, it could start now, but we're just as likely to see fewer folks deciding to sell.
Please see our blog disclaimer.
Listings presented above are supplied via the MLS and are brokered by a variety of agents and firms, not Dave Fratello or Edge Real Estate Agency, unless so stated with the listing. Images and links to properties above lead to a full MLS display of information, including home details, lot size, all photos, and listing broker and agent information and contact information.
Based on information from California Regional Multiple Listing Service, Inc. as of March 18th, 2024 at 6:50pm PDT. This information is for your personal, non-commercial use and may not be used for any purpose other than to identify prospective properties you may be interested in purchasing. Display of MLS data is usually deemed reliable but is NOT guaranteed accurate by the MLS. Buyers are responsible for verifying the accuracy of all information and should investigate the data themselves or retain appropriate professionals. Information from sources other than the Listing Agent may have been included in the MLS data. Unless otherwise specified in writing, Broker/Agent has not and will not verify any information obtained from other sources. The Broker/Agent providing the information contained herein may or may not have been the Listing and/or Selling Agent.