Glen’s East Bay Housing Numbers – Through March 2012
April 10, 2012 by Glen Bell · View Comments
East Bay Inventory Continues to Drop in March. Buyers are now in Search of Homes in a Competitive Market Place.
- Inventory for the East Bay (the 38 cities tracked) is now at its’ lowest level since January of 2006. As of 3/31/2012, there are 3,294 homes listed active for sale. To give you some perspective; the low point since I have been tracking numbers was in July 2005 at 2,607. The high was in July 2007 at 13, 053.
- The month’s supply for the combined 38 city area is now at 1.5 months. Historically, a 4 to 5 months supply is considered normal for this area
- Our Pending/Active Ratio has climbed to 2.26, signaling a strong seller’s market. This is the first time this ratio has been above 2 since I started tracking numbers. Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal.
- Distressed properties, (REOs and Short Sales), are still a large part of our local markets but declining somewhat. 40% of the active listings, 69% of our pending sales (primarily due to the large number of short sales – 54%), and 57% of the sales over the last 4 months are distressed properties.
One question that may come to mind is that if inventory is so low, with multiple offers more frequently in all price ranges, why the sales numbers not reflect that. Shouldn’t we be seeing shorter Days on Market and shouldn’t the Sales Price % of List Price be higher due to upward pressure on prices? The answer really has to do with the time frames being compared. The Active and Pending numbers are as of the end of March. Sales numbers are being pulled from the previous 4 months with properties that went pending 30 to 60 days prior to that.
In other words, the sales numbers are still reflecting what was going on in the market as much as 6 months ago, whereas the Active and Pending numbers are reflecting what is going on in the market right now. The sales numbers will eventually catch up and reflect what we’re seeing now as being a seller’s market, but it may take a few months before we actually see that and read about it in the newspapers.
As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can download an entire copy of Glens Numbers through March 2012 here.
Other Recent News
Lack of inventory means stiff competition for buyers - Sunday, April 8, 2012 – James Shinbori, Paragon Real Estate Group
There continues to be a historically low number of listings and a growing number of highly qualified, motivated buyers. This year, there have been around 30 percent fewer properties available to purchase than in recent years. The drastic lack of inventory and surging buyer demand has resulted in a very competitive market for buyers. Neighborhoods that are appealing to tech buyers are experiencing the most competition.
Bay Area February Home Sales at Five-year High – DQ News – March 15, 2012
Last month’s Bay Area home sales bounced up a bit more off bottom, fueled in large part by investors with cash who were buying discounted properties in the lower half of the price spectrum. The median price paid for a home dropped year-over-year for the 17th month in row, a real estate information service reported.
“The market is still strange, just a little less strange than it was. We also need to keep in mind that, when it comes to statistical trends, February is the least typical month of the year. Over the winter you’re left with a higher concentration of investors and people who must buy or sell because of a major life event. In the spring, when many traditional buyers return, we’ll get a much better read on the market. Meanwhile, many potential buyers are still waiting for the lending spigot to open more. Drum-tight credit conditions continue to undermine housing, along with negative equity and the various uncertainties plaguing would-be buyers,” said John Walsh, DataQuick president.
The low point of the current real estate cycle was $290,000 in March 2009. The peak was $665,000 in June/July 2007. Around half of the median’s peak-to-trough drop was the result of a decline in home values, while the other half reflected a shift in the sales mix.
California pending home sales climb from previous month and year; tight inventory in distressed market persists – C.A.R – March 26, 2012
“A lack of inventory in the bank-owned (REO) and short sale market was a contributing factor to the decline in share of distressed sales in February,” said C.A.R. President LeFrancis Arnold. “In fact, REO inventory declined 24 percent in February from the previous year, while short sale inventory dropped 17 percent during the same period.”
Home Prices to Increase Modestly by Year-End: Clear Capital – 4/4/2012
Clear Capital’s forecast indicates the Western region could be turning a corner. The three-month numbers show the region gaining 0.2 percent, and pushing that to a positive 1.0 percent by year-end.
Glen's East Bay Housing Numbers Through July 2010
August 5, 2010 by Glen Bell · View Comments
This market has seen some dramatic swings over the past 3 years.
To put this in perspective, I’ve attached some slides borrowed from a presentation by Leslie Appleton-Young, Vice-President & Chief Economist for C.A.R. (California Association of Realtors).
Included are the following (3) slides:
- Median Price of Existing Detached Homes
- Peak vs. Trough Price
- Trough vs. Current Price – May 2010.
The first slide takes us on a wild ride from the Median Price Peak for the San Francisco Bay Area of $852,713 in May of 2007, down to the Trough we saw in February 2009 at $399,040, followed by some recovery at $592,930 as of May 31, 2010.
The other two slides demonstrate how our region, the San Francisco Bay Area has stacked up to others in the state.
Does this mean we’re seeing recovery for the Bay Area Real estate markets?
According to C.A.R.’s 2010 Market Outlook (as of 6/18/2010), California will see a small decrease in sales during 2010, down 4.7% from last year, but a 9.1% increase in median price.
Let’s take a closer look at what’s happened since December of 2009 to today.
I try to look for trends in the 38 cities that I follow, (in Alameda and Contra Costa Counties). December’s numbers showed inventories at their lowest levels since I started tracking these numbers back in 2005.
(Click on images to view the larger versions)
Here are the East Bay housing highlights since December:
- 94.4% increase in inventory, (Active Listings) – From 3,690 to 7,164
- 6.2% increase in pendings, (listings that have gone into contract) – From 6,133 to 6,517
- 45.2% drop in the Pending/Active ratio – from 1.66 to .91
- Month’s supply has doubled – From a 1.7 Month supply to a 3.4 month supply.
So, as a summary, we normally see an increase from December into early summer for both the number of homes that come onto the market and the number that go into contract. This year had an unusually high amount come onto the market. Distressed sales contributed 46% of this market, (REO/Foreclosures and Short sales). This has become slightly less of a factor since the end of last year where 54% were distressed properties.
Pending sales increased as well through April, but since have dropped off. We have seen a 12.8% drop in pendings since April 30, 2010, perhaps indicating the influence of the federal and state incentive programs.
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 3.4 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 range of between a 5 to 6 month supply of homes for sale.
This is in line with what we are seeing in the ratio between active listings and pending sales. 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 0.91.
So what’s in store for the East Bay housing market?
It’s difficult to make a blanket prediction for the entire Bay Area due the many differences in local markets. Lower price ranges vs. med to high end markets are behaving differently. Demand is also determined on a city by city, even neighborhood by neighborhood basis. We’re seeing more properties come onto the market, sitting longer and experiencing more price reductions in the mid to high end ranges. Even with that, there’s still not enough inventory for investor and home owner demand in the lower price range areas.
A few months from now, I think we’ll be talking about a modest decline in sales numbers along with a continued increase in inventory, with the pendulum continuing to swing from the brief seller’s market we experienced in early spring back into a buyer’s market with opportunities, as long as the rates stay low. If rates start to rise however, I think the market will suffer and we’ll see the additional 2-8% decline in home values by next July that Moody’s recently forecasted.
I’m always available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can also download the entire copy of my numbers through July 31st here.
–Glen Bell
Equal Housing Opportunity. Equal Opportunity Employer.