All segments of the local market are slowing down. The number of listings of single family homes has not really slowed, going to 557 from 564, 574 & 565 previously. Last year listing peaked at 678 in July and dropped every month thereafter through December. This year we have been looking at 84.66% as much inventory starting the summer but, instead of decreasing the number of listings has been stable as you can see. So we now have 89.12% as much inventory as last year at this time. Still, we continue to have stronger total sales numbers in 2011 with less inventory. With condos we now have 137 active listings down from 139, 153 & 170 previously. We had 156 at this time last year. We actually began the summer with more listings this year than last last year and we still have not caught up to the total sales as of this time last year. Houses are stronger in number of sales, condos are the same, but realized prices are under pressure in both markets.
Closed Sales - Closed sales came in at 85 for September, down from 96 and 94 the previous two months. These closed sales came in at 93.56% of List Price & 87.54% of Original List Price which is essentially equivalent to recent months. The Median Sales Price jumped back up to $800,000 which is closer to the average median sales price of $815,000 for the first nine months of this year compared to the $734,500 value for last month. The Average Sold Price was $1,178.497 down from an average of about $1,230,000 the last three months. How did median price rise and average price fall for the month? The short answer is that there were fewer lower price sales and fewer high end sales. Looking into October we have 44 closed sales thru 10/19 so things look to be slowing further.
Market Share Analysis: Here is a look into the number of sales and percentages broken into price ranges:
Price Range Oct. 1-19 Sept. August July June May
Under $800,000 50%(22) 49%(42) 56%(54) 48%(45) 38% (34) 51% (46)
Under $1MM 66%(29) 62%(53) 70%(67) 58%(55) 61% (54) 60% (54) $1MM-2MM 23%(10) 27%(23) 18%(17) 31%(29) 28% (25) 22% (20)
Over $2MM 11%( 5) 11%( 9) 13%(12) 11% (10) 11% (10) 18%(16)
Total Sales 44 85 96 94 89 90
October so far is mirroring September although with lower total numbers. The $1MM-2MM price range has become stronger relative to the other ranges but not really in itself. It is more about fewer lower end and high end sales and almost no sales over $5MM. We have to remember that normal expectation would be for a slowdown moving into the holiday period.
Low End Sales Data (Under $800,000) - Entry level sales are definitely slowing down. Question is whether it is part of overall market slowing that is seasonal or not seasonal or at least partly due to fewer homes selling due to lower FHA loan limits. The low end is still the strongest part of our market. It is good news that the Senate has passed a new law again taking the limits up to $729K. We will have to see if the House will also pass this or, alternatively, that the politics of weakening the current administration is more important than working to improve the economy and housing. Below you will find an analysis of the last nine months activity which creates an average of 47.56 homes sold per month in this segment of the market. We currently have 142 active listings in this price range down from 148 last month and and average of 147 over last five months. This creates between 3.1-3.5 months standing inventory. This part of the market has been looking at these same numbers for at least six months. Normally so little inventory would create increases in price but in this market the prices have declined this year due to the continual addition to inventory of REO and short sale properties. Sellers and agents know that buyers will act aggressively but only if the pricing is exciting to them. As I have stated for months now, unless and until the powers that be respond by offering alternatives to underwater owners besides short sales and foreclosure, we will continue to have declining prices.
SEPTEMBER 20-OCTOBER19 - Sold Properties under $800,000
1-15 days 16-30 31-60 61-90 91-180 over 180 days TOTAL
#of prop: 16 6 11 6 3 - 42
# short sale 3 1 2 - - - 6
#REO 5 1 2 2 1 - 11
# w/price chg 2 2 7 4 3 - 18
AUGUST 20-SEPTEMBER 19 - Sold Properties under $800,000
1-15 days 16-30 31-60 61-90 91-180 over 180 TOTAL
#of prop: 15 7 8 3 8 4 45
# short sale 5 - 3 1 - 1 10
#REO 3 3 2 1 3 1 13
# w/price chg - - 4 2 8 4 18
JAN 19-AUG 20 - Sold Properties under $800,000
1-15 days 16-30 31-60 61-90 91-180 over 180 days TOTAL
#of props: 105 42 57 46 59 32 341
# short sales 19 4 13 11 12 18 77
# REO 23 13 8 17 14 2 77
# w/price chg 1 6 36 39 57 26 165
The data shows that:
1. As we now see month after month, bank-owned and short sale properties continue to make up around 45% of the sales in this part of the market. The 6.25% loss in value thru August this year in this part of market is due to this continuing problem.
2. In last two months more REO properties are closing than short sales.
3. 72% of all listings were into escrow within 60 days in last two months compared to 60% in the first seven months of the year.
Mid Range Sales Data - 35 properties closed in last 30 days in this price range up from 28 and 24 previously and closer to the 44 and 35 in June & July that caused me to start hoping that this critical segment of the market was waking up. Lets keep our fingers crossed that this segment continues to show strength. We do continue to see short sales and now REO properties cropping up in this price range. They are a bit harder to track but at least 6 of the 35 sales last month were either short or REO. This is starting to become a significant factor for this segment of the market. There are currently 171 active properties in this price range down from 178 last month and 191 & 198 previously. If we can stay above 30 monthly sales this segment can come into balance as long as we do not continue to get more short sale and REO properties.
SEPTEMBER 20-OCTOBER 19 - Sold Properties $800,000-$1,600,000
1-15 days 16-30 31-60 61-90 91-180 over 180 days TOTAL
#of prop: 8 5 9 3 5 5 35
# w/ price chg - 1 8 1 5 5 20
MARCH 20-SEPTEMBER 19 - Sold Properties $800,000-$1,600,000
1-15 days 16-30 31-60 61-90 91-180 over 180 days TOTAL
#of prop: 52 14 25 16 44 22 173
# w/ price chg - 2 11 8 33 20 78
Pending Sales - Pending sales (properties going into escrow) dropped dramatically in September to 79 from 111 in August and 96 & 113 previously. The Median List Price for the new pending sales also dropped dramatically to $729K and Average List Price to $1,050,312 which was quite a drop from $$1,220,881 previously. We do have 56 pending sales in October thru 10/19 which does show surprising strength and the median list price for these is up to $807,500 from $749K previously. This is good news. Also 23 of these were in the Mid-Range that is critically important to our market.
Total pending sales now total 168 compared to 173, 176, 190 & 191 previously. We continue to have an orderly market with less than 20% of pending sales taking more than two months to close. We do continue to lose approximately 10% of pending sales to fall through escrows.
Additional pending sales information:
PENDING SALES - Oct. 19 under $800K $800-1M $1-2MM over $2M
Current total pending (168) 104 23 27 14
Avg. monthly sales (last 5 mths) 44.2 10.4 22.8 11.4
# months inventory over 5 mths 2.35 2.21 1.18 1.23
# months inventory(Sept. figures) 2.47 2.55 1.17 1.57
PENDING SALES - Sept. 19 under $800K $800-1M $1-2MM over $2M
Current total pending (173) 100 22 36 15
Avg. monthly sales (last 5 mths) 41.8 12.0 22.0 12.2
# months inventory over 5 mths 2.39 1.83 1.64 1.21
# months inventory(Aug. figures) 1.85 1.69 2.11 1.25
PENDING SALES - Aug. 19 under $800K $800-1M $1-2MM over $2M
Current total pending (176) 94 30 39 13
Avg. monthly sales (last 5 mths) 40.6 10.4 22.2 12.4
# months inventory over 5 mths 2.32 2.88 1.76 1.05
# months inventory (July figures) 2.10 3.00 1.34 1.3
This information shows that the there is a build up of inventory in the entry level and not much inventory of pendings between $1-2MM. Given the increase in recent pendings in the $1-2MM range this should come back to balance. It will be interesting to how the current pending clear in next month as and if the new pendings decrease as we slow down.
SUMMARY (for single family homes) - Remember that when we look at our market we need to look at strength of sales both in terms of numbers and prices. Santa Barbara had a good summer sales season in terms of number of sales and, although now weakening, it is still good for this time of year. We have reasonable levels of fall through escrows. The problem is that realized prices are not at all exciting. My analysis in August showed that all segments are either flat or falling in realized prices through the first eight months of the year. Buyers still rule but agents and sellers have responding generally by listing the majority of properties, especially in lower price ranges, aggressively.
Investment Properties - We only have 42 active properties down from 46 last month and 44 previously. This market continues to be active with many more buyers than sellers. There are 17 pending properties with 12 of them going into escrow since 9/20/11. We have had four new escrows close in last 30 days. The combination of strengthening rents and great interest rates make any reasonably priced property pencil out. The low end of this market continues to be mostly short-sale & REO properties. We need more inventory.
Condo market - There were 39 closed sales and 32 pending sales in September which continues about three months of good news after a miserable first half of the year. So far in October there seems to be a slow down with only 14 closed sales and 14 pending sales through 10/19. In the last 30 days through 10/19 we find 37 closed sales but only 20 pending sales. The median price for September sales was $445,000 and is $435,000 for those that closed in last 30 days. The average median price for the year now stands at $425,000 which is 2.75% below 2010 & 8.99% below 2009. It feels like this market is trying to make a bottom price-wise. It also looks like this market is also slowing considerably as we move towards the holidays. We will know by next month.
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