Here are the Glen’s Numbers for the San Francisco Bay Area as of June 30, 2010.
Normal seasonal influence has inventories continuing to rise, up 7.3% over the last month, and up a whopping 76% year to date. Also typical, we’re showing an increase in sales, up 15% over the last 4 month period. What is not typical is that pending sales have actually fallen 5.4% over the last month, and by a total of 10.3% over the last two months.
We would have to assume that in part, this was due to the federal and state incentive programs ending 4/30/2010. Fewer buyers are going into contract now. Keep in mind that the extension is only for buyers who were already in contract by 4/30/2010 allowing them to close at a later date. This will ultimately result in a drop in the number of sales in the coming months resulting in further concerns about the state of housing market here in the Bay Area.
The Month’s supply of homes that are for sale has increased from a low of 1.7 months at the beginning of the year to a 3 month supply now. The long range average for California is 7.2 months as stated by C.A.R. (California Association of Realtors). However, the San Francisco Bay Area tends to fair better than the rest of the state with a long range average considered to be closer to a six month supply of homes for sale.
This is in line with what we are seeing in the ratio between actives and pending. The ratio at the beginning of the year was at a high of 1.66, (low inventories with a high number of buyers going into contract indicating a stronger seller’s market). We are now looking at a ratio of 1.04. This is an indication that our markets are once again approaching what is considered to be “normal,” or what may be referred to as a state of equilibrium, or roughly having the same amount of buyers as sellers.
The question I would have to ask is whether we’re seeing an actual correction back to a “normal market, or are we seeing the beginning of a trend that will witness a move back to a slight buyer’s market with higher inventories and fewer buyers going into contract.
C.A.R.’s indication is that we saw our “trough” in February 2009 for the San Francisco Bay Area. Median prices have increased by 46.2% as of April 2010. Will we be seeing a “setback” in this “recovery?” Let’s see how this pans out in the coming months.
Update: Click here to download an entire copy of my numbers through June 30th
