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Local Market Trends: Q1-3 2006 and 2007
Published December 2nd, 2007 in Market Activity. by Marian Bennett, Coldwell Banker Tags: market.Is anybody buying…or selling? Want to compare last year to this year with a sprinkling of “big picture” perspective? Here you go… This graph compares specific data, by quarter, between January 2006 and September 30, 2007 for Half Moon Bay, El Granada, Moss Beach, and Montara combined. You will notice Q4-’06 absent. The data includes:
- Number of new listings each quarter
- Number of closed sales each quarter
- Average Days on Market for each quarter
- Percentage of Sales Price to List Price for the closed sales in each quarter (This does not show list prices changes. Let me know if you would like to see another graph showing list price trends for one of my areas on my Market Stats page).
New Listingshave followed a familiar pattern, increasing in number during the spring months. However, in comparing ‘06 & ‘07 pattern was a bit off in ‘07 - 7% drop in Q1 and 23% drop in Q2. Will this continue through the correction on the Coastside?
Closed Sales over the last year had a little spike in Spring ‘06 and then began trending down slowly as we continue the correction. You can see the impact on local sales the credit crisis, followed by negative consumer perception, brought to our housing market; however in Q3 2007 alone, there were still 41 closed transactions in these communities. This recent article in USA Today points out the phenomenon of the effect of media reporting on consumer perception:
“…There’s a difference between the Wall Street perception of the economy and the Main Street perception,” Donnelly says. “Unemployment is reasonably good; consumer spending is reasonably good. There’s a difference between concern and reality….”
Days on Market and New Listings almost mirror each other. The overall increase from ‘06 to ‘07 is 49%. The decrease in DOM since the beginning of 07 reflects an overall understanding by sellers that we are, in fact, in a buyer’s market and list prices began to reflect that understanding. Inventory is larger now than the norm not because of an influx of sellers but due to the decrease in sales. See also my article dated September 12, 2007 on what is a “normal” market. To update, months of available inventory for September 2007 - 10.25; for October 2007 - 7.6; for November 2007 - (I will post when available).
% of List Price Receivedshows that when the price gets in line with the current market conditions, the property will sell. If, for whatever reason, the seller is not able to bring the Listing Price to within the current market range, (taking into account other factors such as location, condition, presentation), those properties will become expired, withdrawn or cancelled. As mentioned above, this does not show the listing prices, i.e. where the seller started and how many price reductions occurred to get to the sale price.
Bottom line: Not everyone benefits in every market. Work with the market, not against it. There are winners in this market.
Need to sell: Interview 2-3 local experts to gain perspective before hiring. You will be spending a lot more time with your Listing Agent these days. Trusting that your real estate professional is on top of trends and how to market your property in this changing environment, while getting the deal done ethically and professionally, is important.
Preparing to purchase real estate: Work with a local expert who can drill down the specifics for your neighborhood of choice to get you the best deal on your new home. Understanding your goals and timing is more important than ever.
No plans to buy or sell: Enjoy my take on this, kick back and relax.
Sources and further reading:
“…The housing market will turn around on a change in consumer perception…”by Pat Kitano, Transparent Real Estate
“…housing is in correction mode…but no need for panic.” by Dick Green, Briefing.com
This is some of the best, most in-depth local market analysis I’ve seen anywhere. The media tends to cover more macro stories, and preferably ones of doom and gloom.
I’m curious if there’s any dichotomy on the coast, as there is here in Silicon Valley, between the good school districts and the not-so-good ones?
Kevin,
Interesting question. Our dichotomy is more with location…e.g. oceanfront vs. subdivision - and both can show up in the same MLS area. Take Area 605 (Wavecrest), sale prices in 2007 ranged from $578K to $1950K - very different houses, of course, but same area, schools, etc. A couple other examples are Casa del Mar/Kehoe and Ocean Colony.
Today, 12/18, the news says Half Moon Bay may have a bankruptcy crisis… I’m wondering what would happen to the local housing market if HMB indeed declares bankruptcy and cedes back to the county?
Hi Pat,
HMB is indeed currently facing an unprecedented challenge and the City’s current Council is meeting frequently to address this issue. I expect all options are being explored. If the City does find itself in that position, you will see many more residents pulling out the stops to prevent such an action. If we do have to go down that path, my unofficial prediction on re is that home values would go down in its wake (like values do following a tragic event) and then bounce back once new local governments regrouped to represent the Coastside were formed. We’re a smart bunch of survivors over here who understand how lucky we are to live here. I like to look beyond the headlines and will in this case also. Also, I think at some point there was talk to incorporate the entire coastside as its own city… As far as unincorporated, look at Montara now, and I see Moss Beach about to be noticed. I am planning on writing a post about this from the re perspective soon. Thanks for the question.