Sales Pace Bottomed in '08

By Dave Fratello | February 9th, 2010
A downtrend in the number of SFR sales annually in MB began in 2002-03, and ran its course – we know – at least through 2008, when a new low was established. (See "Beach Sales: South Since '02-'03.")

For many of those years mid-decade, you hardly would have noticed declining sales. There were still plenty of sales going on (30-40 sales per month for all of MB) and prices were rising consistently, so there was little worry about the health of the local market.

But 2007 gave us one new low, the worst sales pace in 20 years. (See "Maybe It Can't Get Worse.")

And after 2008 scraped out a new bottom lower than that, 2009 began with a still slower pace. The first half of last year saw even fewer sales in MB west of Sepulveda than the first half of 2008. (See MBC's "Pace Slower, Prices Lower," from which our first graph is taken.)

And now here is where the story changes.

The second half of 2009 saw more SFR sales west of Sepulveda than 2008. In fact, 2009 had more second-half sales than 2007.

Whichever factor you'd like to point to from last year – declining prices, ultra-low rates, the return of jumbos, the rising financial markets, or, heck, even the first-time buyer tax credit – some combination of those things brought buyers out in the second half of 2009 like they hadn't been out in quite a while.

As our second graph here shows (click to enlarge), SFR sales late last year, at 95, were markedly above the 2008 figure of 73. And there was a nice bump of 8 sales over 2007.

Tracking the market here at MBC, we usually point to the Spring Rally of 2007 as the last gasp of the local bubble. The market had turned strange before that, and price declines were evident, but turmoil in August 2007 began the real problems for the local market. To see 2009 outperform that awkward period late in '07 may not be a huge uptrend, but it's something.

Of course, total sales west of Hwy. 1 for the year last year were not going to compete with 2007 and its notable first-half rally.

No, 2009 fell well short of that. (Click graph to enlarge.) At 171 sales, we were still 21% shy of the 2007 pace.

But we did end the year with 9 sales more than 2008 in MBC's subject area. So that's a start.

MBC once again offers our sincerest thanks to local realtor and blogger Kaye Thomas, whose data provided the backbone of this story. (See Kaye's post on Jan-June 2009 data and on July-Dec. 2009 data for much more.)

Kaye's presentation of the 2007-09 data (along with 2000-2009 data) comes with some warnings about what 2010 may hold for housing, nationally and locally. If you follow this stuff, the subjects are familiar – rates may rise, lending standards may tighten, etc.

Kaye set up the question that's floating all over town: Can we keep it going in 2010?

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