Thursday, May 03, 2007

Agent Bubble Sales Data Graphs: April 2007

We are only onfour months into 2007, and it's shaping up to be the strangest year in Real Estate History in this town. I mean, when was the last time February was the peak month for sales volume, price, and y-o-y change? Could the subprime meltdown have anything to do with this? We at Sacramento Real Estate Statistics are not foolish enough to call an annual peak a third of the way through the year, but we are keeping our eye on it.

**Edit**

An astute reader was too polite to write put this in comments:

Max-

You said: "when was the last time February was the peak month for sales volume, price, and y-o-y change?"

Actually, according to AB's data, sales volume peaked in March:

Jan: 806
Feb: 807
Mar: 1057
Apr: 874

Am I missing something here? The pattern of sales volume in 2007 is looking a lot like 2006, when volume peaked in March and declined the rest of the year (see last month's SAR graph).


He is right, of course. I misinterpreted my own graph. That's what I get for posting before 5AM.

Wow, two screw-ups in a week. I think that's a record.




8 comments :

Bubble Sitter said...

Agent B.,

Your observations are interesting because there did seem to be more activity in the initial stages of 2007. I thought it was a dead cat bounce, but there was no certainty, even when the odds of further price depreciation is likely.

I must say now, it is getting very interesting out in the market. The lenders who are starting to build up REO portfolios have decided to cut and run, while the running is good. It is like they have decided a $300,000 house today is a $250,000 house by the end of the year, so take $275,000 now. They must know the builders can produce for much less than their foreclosed loan balances. It will get very interesting from here.

The other factor affecting inventory is a lot of "pending sales" are cratering and getting tossed back into inventory. The reason is usually....."could not qualify for the loan". You have not heard that statement since 1997.....

AgentBubble said...

bubble sitter,

Yes, the market is definitely shaping up to be very interesting this year. There are so many variables that are coming into play that many of us simply overlooked. I'm betting on the builder to come out on top over the reseller and banks when the year is over.

Lander said...

Only HAL9000 posts before 5 AM :)

Max said...

Yeah, it hasn't been a good week. Too many distractions. I've said it before: I wish this blog paid so I could quit my day job. :)

Sippn said...

Only 2 screw ups? You must not be married!


5 am puts you in the "over 40" crowd, unless you were just coming home.

Yea I think the subprime meltdown definately screwed up what could have been a 1st quarter soft landing...

Seeing independent mtg brokers shrinking and dealing with losses from loans they underwrote poorly, while also seeing the major lenders expand and hire in our market.

AgentBubble said...

Here's a post I added on another blog:

April sales are definitely down compared to March. I just ran stats from MLS for the 4 county area and came up with the following:

Mar 07 - 1809 sales
Apr 07 - 1498 sales

17% drop in sales from a month ago.

Just for comparison, here are the figures from the same months for 2005 and 2006:

Mar 05 - 3314 sales
Apr 05 - 3245 sales (2% drop)

Mar 06 - 2366 sales
Apr 06 - 1987 sales (16% drop)

Also worth noting is that June has been the biggest sales month for the last 2 years I've been tracking data...

Darth Toll said...

"Yea I think the subprime meltdown definately screwed up what could have been a 1st quarter soft landing..."

But was a soft-landing ever really in the cards, or are we seeing the inevitable shakeout from years of improper lending and speculative excess? I consider the subprime developments to be a small part of the self-reinforcing negative feedback loop. Some would call it an endless series of dead-cat bounces.

Inventory builds up, prices soften leading to more foreclosure and more inventory and further price deflation. Rinse and repeat, with seasonal peaks and valleys thrown in for good measure and to make things a little more complex.

Now analyze this vicious cycle from the lender prospective and the subprime shakeout is just the first wave. High-risk borrowers at the margin are the least stable and the first (but not the last) to go.

I've been saying since 2004 that all it would take to kill the housing bubble would be for prices to simply stop rising. Once that happenes, the Ponzi scheme implodes and the psychology of the mania is permanently broken. For someone to believe in the possibility of a soft-landing, that person must also deny the existence of a bubble, otherwise a soft-landing must be a Red Herring.

Anonymous said...

Max,

very hard to see a trend in the way you present multiple data on the same graph.

Just one example :

when a house dropp in price it just move to another color on your graph while all the lines remain stright (no down trend)

please make an effort to create a clearer presentation. Less data more clarity.