Thursday, May 08, 2008

Preliminary look at April 2008 Redondo Beach housing market data

I pulled my sales data set out of the Manhattan Beach Reporter again. There may be a few May sales mixed up in here since the sale dates in MBR are not precisely given. Oh well, I can only work with what I can scrape up.

It looks like there was a slight pickup in lower end sales in April. Also, my calculation of DOM has plummeted back down to figures more in line with what I was calculating last year before the credit crisis hit, rather than the horrid figures I have been calculating during the winter. Median and average square footage have also shifted back down, providing further evidence of more lower end homes selling. So there are definitely some signs of life in this market.

STAT      OCT 2007  NOV  2007   DEC 2007   JAN 2008   FEB 2008   MAR 2008   APR 2008
records         44         37         26         25         25         35         40
MEDIAN    $755,000   $832,500   $782,500   $795,000   $755,000   $789,000   $756,000
AVERAGE   $770,416   $933,956   $832,827   $932,117   $831,500   $961,714   $833,000
MIN       $369,900   $379,000   $486,500   $449,900   $520,000   $585,000   $420,000
MAX     $2,560,000 $2,500,000 $1,500,000 $2,130,000 $1,590,000 $2,100,000 $2,425,000

These figures are from my SUPPLY records for which I found sales. Looking again at the numbers for April 2007, I had 99 records with a median sale price of $799,000 and an average of $888,488. My April 2008 numbers are clearly down from 2007 (median down by 5.3%), so I think there is a good chance we could see an official YOY decline in Redondo Beach median home price when DataQuick publishes statistics later this month. We shall see. Minimum sale price a year ago was $470,000 and the maximum was $1,750,000, according to my data.

Median square footage is 1790 and average is 1826. In 2007, out of 99 records, median square footage was 1868 and average was 1925. So median square footage has shifted down by about 4.2%.

Note: records=35 is wrong, should read records=40

If you've been reading this blog long enough you'll know that my DOM is (hopefully) a representation of a more realistic time it takes to sell a house. In other words, my DOM is just not starting the clock from the date the property was last relisted before it sold. My DOM starts the clock the first time I notice a home listed, and I assume it remains listed until I find a sale record for it.

My calculated median DOM is back down to 92 days (roughly 3 months) and average DOM is at 133 days (about 4.3 months). However you can see the distribution remains wacky. New home sellers who have a clue that they need to price their home competitively to sell have a good shot at selling their home within around 60 days. 2 months is still an excellent time on market, considering the horrible shape the mortgage industry is in. But the key is the property needs to be priced very competitively. Otherwise the listing may just sit and rot, as you can see from the right hand cluster around 240 days (8 months).

And how much did April home sellers have to cut out of their asking prices to get their homes sold? The median percent reduction was 6.02% and the average was 7.04%. Last month, median PCTRED was 6.4% and the average was 7.2% so it looks like PCTRED is almost remaining steady.

And now I want to explain this newly added chart. I am trying to keep track of asking price history as a way of measuring the "value" of the unsold homes. To produce this chart, each month's median price calculation is the median current asking price for homes newly listed during that month or whose asking prices are changed during that month. That's what I mean by "Refreshed by Month."

It was either this calculation, or to try calculating the median current asking price on all unresolved inventory every single month, and that is too cumbersome a task for me to tackle. However, I think my "refresh by month" approach will work. The most recent month will encapsulate the most recent opinion on the market, whereas a calculation that carries all the baggage of all unresolved inventory will probably carry many outdated opinions on the market.

Ignore the initial spike up. That just means that my database had no records in it yet. As time progresses, the data gets more accurate as more records are added to my database. As you can see, asking price has been drifting down. For April 2008, the median current asking price ended up at $768,500.

This other new chart is the history of percentage price reduction from my records. I simply take my median and average PCTRED calculations and tack them on to this graph.

Unfortunately I do not have much history to show here, so I don't have a definite sense of how this graph behaved during the bubble boom. If I had to guess, there would have been no or few price reductions and the lines would have been below or hovering around 0. But it seems to me that during a market with normal seasonal swings, price reductions would peak during the slow winter months (if you want to get your home sold during the winter, you may have to cut the price more) than during the busier spring - summer - fall seasons, when you may not have to cut at all. So I would expect the graph to rise into, say, January, and fall down from there. That appears to have happened in 2007. In March 2007 the lines bottomed and wavered around a little, but starting in July 2007 the lines started to climb more seriously. Reductions peaked once again in January, and started to fall off - they have bottomed in March again, now will the lines bounce around, like last year, or will they continue to climb?

Finally, I'll throw in some short sale data. The first column is the sale date, second column is the prior sale date, and third column is percent loss.

There's something screwy going on with the Paulina house to have had such a quick succession of recent sales. The Rindge Lane property is rather interesting. It sold for about $1.165 million at a peak in July 2005, and went into foreclosure. I guess the bank owning it tried listing it in the high $900,000's and finally ended up selling it for $850,000.

2008-04-09 2005-06-15  -4.0   108 S. Francisca Avenue A 1548
2008-04-07 2005-12-13 -16.0  1030    Avenue A            850
2008-04-21 2005-07-15 -27.0  1206    Rindge Lane        2620
2008-04-21 2007-11-06  -6.0   410 N. Paulina Avenue     1760
2008-04-08 2005-09-15 -13.0  2110    Vanderbilt Lane A  1471 

Oops I apologize for the typo. Rindge Lane is down 27%, not 37%.

Ignoring the Paulina house, you can see that these short sales sold at a loss from their peak values in 2005. So home prices may really be back down to 2004 valuations. That seems to come up consistently, no matter what a realtor will tell you about median price still climbing in Redondo Beach. And the scary thing is, my calculation just goes by strict sale numbers, and does not take into account selling costs. Had I done so, there would be more properties listed here that, while they may not show a loss, would definitely show that no money was made in the sale.

Stay tuned.


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