Wednesday, March 21, 2007

Other measures of beach cities market activity, February 2007

Shorewood has published February numbers.

The average DOM for the beach cities, by Shorewood calculations, is 60. The moving average also shows 60. My calculations of median DOM and average DOM for Redondo Beach in February are both running well above 100 - my last calculation was 132 for median, 128 for average. That's twice the DOM that Shorewood gets for the beach cities. 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 CDOM isn't foolproof. I hope my separate, independent calculations for Redondo Beach provide a more realistic picture of how long it really takes to sell a house here.

Here is my homegrown measure of beach cities "supply strength", which takes a ratio of inventory and sales. For the beach cities, it has (by pointing down) been recovering over the winter months, but the trend is leveling off somewhat in February. With listings expiring over the winter months, that shrank inventory, bringing the ratio down. If we are correct about a psychological backlog of homes to sell, this should start climbing again in a month or so.

My own count of Redondo's new listings for February is 109. My count of new listings is conservative, since I do not count anything that's been relisted since the end of September. By Melissa Data numbers, there were 57 sales in 90277 and 90278 in February. (Perhaps a tiny fraction of these were really in Torrance.) By this measure, the new inventory count is roughly twice the sale count. In spite of a recent few decent months, and in spite of the possibility of another decent sales month or two, I still don't have reason to believe that sales are soaking up excess inventory.

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 so small number errors don't cause a problem. It is continuing off a low from 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. In the January report I suggested that this might rebound somewhat before the subprime lender implosion hits. That indeed appears to be what is happening. Although I've noticed fewer mortgage ads in the local papers, it is still not clear to me how deeply this will affect, say, Manhattan Beach. If you read my recent post on notices of default, you'll know that there are problem loans in Redondo and the problems are not diminishing by any means.


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