Friday, June 23, 2006

DQNews South Bay Resale Activity for May 2006

According to DQ News, the May Monthly resale activity for the south bay area showed the following:

Zip     # SFR   Median   %Chg   # Condo  Median    %Chg 
        Sales   $SFR      YOY    Sales   $Condo     YOY
90045    40     837,000  11.6      7     450,000    8.7
90245     9     794,000  -6.6      4     530,000   -8.9      
90254    10   1,571,000  19.7     10   1,130,000   45.9   
90260    15     535,000  21.7      5     307,000  -19.2
90266    24   1,202,000 -19.6      5   1,064,000   -8.3
90277    16     873,000 -16.7     20     730,000   13.2     
90278    28     800,000  10.7     38     684,000   -2.7

For the charts below, I tried taking the YOY change in a doubly smooth 3 month moving average of the median SFR prices of each of the beach cities to see if anything interesting shows up. The results are mixed. Overall, price momentum has slowed this year, but for some zip codes the trend is currently flat, for some the trend has just turned up slightly, and for some the trend is currently drifting down, meaning that a trend toward an overall longer term price decline in median prices is not here yet. Since these are sales of existing SFRs, I don't think the resiliency of prices here can be blamed on the upward bias of new construction. The bubble is hanging in there, at least through May 2006.

Note: the charts have a slight insignificant inaccuracy because I do not have available the median price data 3 months prior to June 2003 for calculating moving averages.


Blogger no.torrance boy said...

I wonder if this is supposed "plateau" that the real estate community keeps pushing forth? I am curious to see the statistics in September,thus accounting for the summer months and the peak season. Those numbers will indicate the true character of this market.

6:24 PM, June 25, 2006  
Blogger bearmaster said...

Yes, obviously this area has held up well and will be among the last places to unwind the bubble. So it could be 3 months to as long as another year before we really see the evidence (declining YOY median prices, on top of the already existing fewer sales and longer DOMs that we see now) that this area is suffering the same problems as San Diego, or Sacramento, or even Arizona or Florida.

The real estate and economic talking heads still keep insisting a crash is not expected, just a return to a normal market. Is this the equivalent to the 1929 platitude by Irving Fisher that "stocks have reached a permanently high plateau" shortly before they went over a cliff?

7:29 PM, June 25, 2006  

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