Other measures of beach cities market activity, January 2007

Shorewood has come out with January numbers.

The average DOM for the beach cities, by Shorewood calculations, is 65. The moving average shows 60. Keep in mind that my own calculation of median DOM and average DOM for Redondo Beach for January have been running at above 90. My calculation is somewhat closer to what some realties call "continuous DOM", or CDOM, which avoids the "reset to 0" problem for some relistings (though isn't foolproof). I wouldn't be surprised to see more realties adopt it.

In any case, the seasonality of our local market is apparent in the DOM chart. If the market continues its normal seasonality, I would expect the DOM to swing down a bit from here.

Here is my homegrown measure of "supply strength", which takes a ratio of inventory and sales. It has made a good recovery in January. However in my own records for Redondo Beach, I show 99 genuinely new listings coming on the market in January. That does not include properties being relisted since the end of September, which the realtors are more likely to count as new listings, so my count is conservative. Yet by Melissa Data, a total of 71 properties were sold in 90277 and 90278 in January. Perhaps a small handful of these were in Torrance, OK. That would leave fewer properties sold in Redondo Beach. So for January, 99 new listings, and less than or equal to 71 properties sold. There's a gap - not a big one - but when you still consider all the properties that were listed last year and not sold, is there pentup selling demand?

Here is the median price of a home sold in the beach cities in January. I would trust this more than what DataQuick tells us, because this data is an aggregation of the four beach cities and forms a larger dataset. It is coming off a low in January. I have also plotted a simple moving average.

This last chart is the %YOY change on the simple moving average of the median price. As you can see it's been down YOY for three months. If this is the year of the dead cat bounce before the storm from lender implosion hits us, we might expect this to rebound somewhat.

The bottom line is that beach city inventory still isn't rationally affordable and although some properties may look like "good deals" at the moment, they really aren't. Despite all the happy talk from realtors there is probably a lot more bottled up inventory than is being measured, and lenders are imploding. This is not a "bottom" from which lasting and sustainable recoveries are made.

By the way, if the current new listing trend continues through February, I will expect about 98-100 new Redondo listings for February. And many of them are in higher end property range.