2010 Coastside Inventory, Part 1
Inventory is one important indicator to determine how “hot” or “cold” your local real estate market is at a given time. This market, the Coastside, including Half Moon Bay, El Granada, Moss Beach and Montara, has seen an increasing level of inventory over the last 2 years.
When the financial crisis hit in the Fall of 2008, Coastside inventory dropped rapidly, with the lowest level occurring in December 2009 (102) – note graph below of the Half Moon Bay-Coastside inventory pattern in the last (almost) three years. The inventory patterns of 2009 and 2010 were a little different from each other. 2009 trends were like a comfortable shoe, meaning the rise of inventory occurred in spring and drop in inventory followed our usual “indian-summer” Fall weather pattern. This year, a Spring jump in inventory didn’t really happen; the peak finally came in September.
Our 2010 Coastside inventory pattern was consistent with greater San Mateo County in 2010, where the inventory peak was also September. One big difference, however, between greater San Mateo County inventory and the Coastside inventory is the MSI. Maybe this is why we’re noticing more “over the hill” visitors these days! MSI means the “Months Supply of Inventory”. This is an estimate of the length of time for all the market’s active listings to be sold (or absorbed) based on the current homes for sale (active and pending) and the rate that homes have been selling (absorbed) in the past.
Coastside MSI for November 2010 – 15 months (lots of inventory, few sales)
Coastside MSI January to November 2010 – 11.9 months (buyer’s market)
San Mateo County (minus Coastside towns) for November 2010 – 3.8 months (seller’s market)
San Mateo County (minus Coastside towns) January to November 2010 – 4.2 months (seller’s market)
Coastside MSI, December 20, 2010 – 10.2 months* (still a buyer’s market)
*12/19/2009 to 12/19/2010 = 170 SFH closed sales ÷ 12 (months) = 14.17 closed sales per month (absorption rate). If an average of 14.1 homes are sold per month on the Coastside, how long will it take to sell 145 homes (current inventory including pendings)? 145 ÷ 14.17 = 10.28 months.
In tomorrow’s Part 2, I’ll follow this up with more detail and share some “why”.
ACTIVE BUYERS AND SELLERS: While Coastside statistics are useful in watching the market, more detail is needed regarding the hyper-local market of your transaction. Do not rely on this data alone. This is an important topic of discussion to have with your Realtor as you prepare to list or purchase a property.