Redondo Beach sales statistics for July 2007
It's annoying that it wasn't until the end of August that July sales were finally updated in Zillow, but better late than never. There are some curious things going on in the July numbers which I will point out. I don't exactly know the reason for them, but it's fun to speculate.
The following numbers are taken from the SALE records in my database. December 2006 has dropped off to make room for July 2007. What pops out is the big leap up in median price.
STAT JAN 2007 FEB 2007 MAR 2007 APR 2007 MAY 2007 JUN 2007 JUL 2007 records 48 64 105 114 91 62 78 MEDIAN $724,500 $745,358 $755,000 $799,000 $777,000 $764,500 $860,000 AVERAGE $762,005 $787,799 $813,252 $884,271 $855,228 $830,711 $880,279 MIN $389,000 $387,500 $370,000 $470,000 $453,000 $485,000 $359,000 MAX $2,100,000 $1,878,000 $2,027,000 $1,750,000 $1,640,000 $1,565,000 $2,299,000
I suppose we should cite a genuine market recovery as a possible reason why the median leaped up. But I give that a low probability. Housing remains as unaffordable as ever, and big mortgage loans are getting more difficult to come by. The July DataQuick numbers for RESALE activity look like they could be in a slump, but the July HomeData numbers for ALL activity show median prices that come close to mine. So the bounce must be coming from bigger, new construction.
These numbers for Original Asking Price, Sale Price, Square Feet, DOM, and PCTRED are taken from my resolved SUPPLY records (not the SALE records):
ORIG SALE SQFT DOM PCTRED ASK PRICE MEDIAN 865500 850250 1628 68 1.8 AVERAGE 919373 880372 1735 104 3.7 MIN 375000 359000 619 24 -4.8 MAX 2350000 2299000 3551 475 20.9
PCTRED is the percent reduction between original asking price and final sale price. A negative number here means that a home sold for more than the original asking price - yes, some are still selling for more than list price.
Notice how the gap between original asking price and final sale price has shrunk, both the median and average. Early this year that gap was easily 14% or more. Now that gap runs 2-4%, depending on whether you look at it from the original asking price or the final sale price. Notice also how median DOM has come down to 68 days from about 90 days (3 months) and average DOM has come down to 104 days from about 120 days (4 months).
My broad interpretation of this is that sellers entering the market are waking up. New listings are priced much more competitively than most of the older inventory that is sitting and rotting at still-unrealistic asking prices. Homes that are priced very competitively are still selling, and they are selling relatively quickly. Since the price bounce is coming from new construction, I'm wondering if at least some builders are acting quickly to get new construction off their hands ASAP and move on. Builders aren't hampered by emotional ties to properties when cutting prices. On the other hand, homeowners with great emotional ties to their homes have a harder time cutting prices.
The additional factor that I have to consider is what effect the latest mortgage industry blowups have had on the psyche of buyers. Maybe they have been rushing in to get their dream properties before it gets harder to do so. Remember these are July numbers, before the August financial market woes.
My interpretation fails to address the dip in median and average square feet of sold properties. The only thing I can offer here is that more smaller places are getting sold in pricier areas (i.e., south Redondo).
By the way, I don't know if you caught my 3 part article about the phases of the last housing downturn (just look at the recent archives), but we went through a period where one could lower a price and get a place sold. Early in the downturn, sellers met that suggestion from their realtors with great resistance. Then there was a really ugly down phase where it seemed like no matter how much prices were lowered, properties just wouldn't move. History is rhyming. There was much press, especially last year, about the buyer-seller standoff. But we aren't at that really ugly down phase just yet - at least, not here.
I like to publish my SQFT chart out of my SUPPLY records rather than my SALE records, because sale records often quote square footage of old teardowns on new construction at the same address, leading to errors. From the sale records, it looks like there was more purchased in the 2500 square foot range. The chart is out of supply records. (I end up with more sale records than supply records for a given month - I never capture everything that is for sale in my database.)
The other unusual thing I noticed this month is the big DOM gap between 160 days column and 240 days column. We know DOMs have shrunk. Notice that more than 75% of July sales sold within 80 days (less than 3 months). As for the gap, perhaps there is a growing bifurcation between the old diehards who refuse to budge on their asking prices, and the newer sellers who see the realities of the current market.