Saturday, January 20, 2007

Other measures of Beach Cities market activity, December 2006

Shorewood has come out with its December numbers.

Average DOM (days on market) for sales for all the beach cities was 56 days. In a prior posting, I actually came up with a guesstimate of average DOM for Redondo Beach as 90 days, and I stated in that post why I actually thought I was understating DOM. My calculation of DOM is also quite different.

The interesting thing about the DOM graph is the swings. Notice the peak in January-February 2005, and how the trend drifts back down, then swings back up again to peak in January-February 2006, then drifts back up again, then notice how it's been climbing higher during the second half of 2006 (with some very recent flattening).

Next we have my own invented measure, I-S/S, also known in politically correct terms as "supply strength" (realtors are telling us there are now more homes to choose from, which is good) but which can also be interpreted as "demand weakness." The interesting thing this month is that the number of sales in the beach cities was 118, exceeding those in December 2005 by just one, but because inventory is up 72%, the ratio now charts much higher.

If you are new to this blog, pay attention to that bottom in May 2005 labelled 0.8 from the moving average. I interpret I-S/S = 0 to mean that supply and demand are perfectly balanced. Look at how this ratio has been climbing since! I think I-S/S has been a leading indicator of real estate activity here.

Finally, we have median price data from Shorewood. For December 2006, the median sale price for the beach cities was $802,000. The price is still trending down.

Beach cities are El Segundo, Hermosa Beach, Manhattan Beach, and Redondo Beach.


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