Glen's East Bay Housing Numbers (Through October 2010)
November 11, 2010 by Glen Bell · View Comments
The October edition of Glen’s numbers is in, and it looks like the East Bay housing market is stabilizing a bit.
- October marked the first month since the beginning of the year that we did not see an increase in inventory. However, we are still 114% greater than where we started, 7,803 homes now listed compared to 3,690 as of 12/31/2009. Typically, we see a drop as the summer ends.
- Although we saw no real change in October for the amount of pending sales, (homes that have gone into contract), they are back to their January levels due to a 22% decrease since 4/30/2010, (the federal and state incentives deadline).
- Our Pending/Active Ratio of .78 now indicates that we are, on the whole, back in a “buyer’s market.”
- Months supply has increased from 1.7 months at the beginning of the year to 3.9 months now.
Is It the Right Time to Buy?
I have to agree with Robert Kleinhenz, chief economist with C.A.R. (California Association of Realtors), in his article from last week, Home Buying Trifecta: Right House, Right Price, Right Rate.
The months ahead offer a prime opportunity to seek the home buying trifecta: finding the right home at the right price for the right mortgage rate. Here’s why:
• First, there is a wider variety of homes on the market now, including a mix of REOs, short sales, and conventional or non-distressed homes for sale. …
• Second, home prices have stabilized or risen in most California markets for at least a year, but still remain well below the peak levels of the last decade. …
• Third, mortgage rates are at their lowest levels in over 50 years, pushing the monthly payment down dramatically….
If you’re looking to buy property in the East Bay right now, you’re doing so in a market that we haven’t encountered in quite a while.
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 the entire copy of Glen’s East Bay Housing Numbers Through October 2010 here.
Glen's East Bay Housing Numbers Through September 2010
October 6, 2010 by Glen Bell · View Comments
The September East Bay Housing Numbers are in and inventory continues to rise in Contra Costa and Alameda Counties as sales remain sluggish.
• We have seen a 114% increase since the beginning of the year on the amount of homes that are now for sale. Typically, we see a drop as the summer ends.
• Pending sales, (homes that have gone into contract), are on the decline, down 22% since 4/30/2010, (the federal and state incentives deadline).
• Sales are down 8.5% since the end of May.
• Months supply has increase from 1.7 months at the beginning of the year to 3.8 months now.
• Finally our Pending/Active Ratio of .78 now indicates that we are, on the whole, back in a “buyer’s market.”
This week I wanted to bring in some recent news sources to help make some sense out of what we’re seeing here in the Bay Area.
1) CAR (California Association of Realtors) released their 2011 California Housing Market Forecast on Oct 4, 2010. They forecast that we would see a small increase in sales and median price for California in 2011 at 2% each.
Here’s a quote from their article that I felt was very relevant;
“The situation in the California housing market continues to be a tale of two housing markets,” said (C.A.R. President Steve) Goddard. The segment of the market under $500,000 has been driven by distressed sales, while higher-priced areas of the state have been constrained by restricted financing options, and increasingly have experienced an increase in the number of distressed properties. Sales in the low end have been constrained by a lack of inventory, putting upward pressure on prices. Multiple offers on lower-end homes have been very common, according to Goddard.
“A lean supply of available homes for sale will drive prices up at the low end, but larger inventories and limited, less attractive financing will cause continued softness at the high end,” said Appleton-Young. “There’s some indication that lenders will accelerate the number of foreclosures coming on market, further adding to the housing supply, but we do not anticipate that lenders will flood the market with distressed properties,” she said.
2) From another article found in the Wall Street Journal blog yesterday, by Dawn Wotapka, titled “Housing Inventory Climbs Again in September;”
“Housing inventories, which typically dip as the summer ends, rose for the ninth straight month in September, indicating that sales remain weak as the downturn drags on.”
“More inventory is the last thing housing needs. Current sellers face a bleak picture: Despite record-low interest rates and falling prices, some home shoppers remain fearful of signing contracts as unemployment remains elevated. Those ready to buy may think that prices will fall further, providing little incentive to act quickly. Given tightened lending restrictions, others want to buy but cannot. Some sellers, meanwhile, can’t trim prices any further without selling for less than they owe. And the foreclosure crisis continues–and some banks have halted foreclosures, further gumming up the works.”
3) A final quote from a DQNews article, Bay Area Homes Sales Drop to 1992 Level; Median Price Slips Again;
“The magnitude of the sales slowdown suggests that, among other things, many would-be buyers are holding off for further price cuts, which would be most likely where an inventory spike meets slackening demand. The trick is to keep one eye on mortgage rates. If they jump, it could erase the benefit of a modest price drop.”
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 also download the entire copy of Glen’s Numbers Through September 2010 here
A Closer Look Into the Fundamental Shift in the East Bay Housing Market
September 9, 2010 by Glen Bell · View Comments
photo credit Angelo DeSantis
While compiling the monthly numbers for August, I decided to take a closer look at sales during the ups and downs we’ve experienced over the past few years. The news we’re hearing today seems to always focus on one or more of these questions:
1. Sales. Are we seeing more or less in our local markets?
2. What’s going on with price?
3. How much of a factor are distressed properties?
I wanted to identify trends in our market without getting into too much detail. I looked at sales of single family homes in Alameda and Contra Costa Counties by focusing on key months.
- Current Month (August 2010)
- End of Year (December 2009)
- Last Year (August 2009)
- “Trough” (February 2009)
- “Peak” (May 2007)
What I looked at was changes in markets that have occurred in; sales, price, price levels and the influence of distressed properties. As we’ve already seen, the “mix” (sales by price levels), and the influence of distressed properties are very important factors.
“Peak” and “Trough” months were identified as such for the San Francisco Bay Area by the California Association of Realtors (based on average median price). Price levels were also suggested by CAR as a means of further breaking down markets to identify what the actual “mix” has been on sales for any given month.
In looking at what is considered our “Peak,” you can see how high price was for both counties compared to the “Trough” and our current market.
Peak (May 2007) to Trough (February 2009)
1) Average Sales Price;
Alameda County, Down 52.5% Contra Costa County, Down 64.5%
2)Median Price;
Alameda County, Down 54% Contra Costa County, Down 69.8%
Although there has been some recovery since the “Trough,” we are still well below the “Peak” of May, 2007.
Peak (May 2007) to Current (August 2010)
1) Average Sales Price;
Alameda County, Down 33.6% Contra Costa County, Down 44.6%
2) Median Price;
Alameda County, Down 36.7% Contra Costa County, Down 56.0%
The Weight of Distressed Properties on the East Bay Housing Market
We gain some additional insight by taking a closer look at what sold, “mix” (price levels), and how much the market has been influenced by distressed property over the last few years.
During the “Peak”, May 2007, distressed properties had very little influence in our market. As we experienced “the credit meltdown” with economic/employment concerns, more and more foreclosures came onto the market increasing inventories adding downward pressure to home values. The “Trough,” (our lowest median price levels), was when distressed properties were at their highest levels.
Alameda County Distressed Sales as a % of Total Sales
Contra Costa County Distressed Sales as a % of Total Sales
“Mix” (Price Levels)
Lower priced home sales were very minimal during the “Peak” with the bulk of the sales coming from price levels above $500,000 for both counties, and even more importantly, looking at houses under the $300,000 price range.
Here are the total sales in Alameda country from the Peak in May ’07 to Now. Notice, the “mix” has changed dramatically.
& here’s the data for Contra Costa County. Once again, notice how the “mix” has changed dramatically.
Take some precaution in making comparisons based on Median Price because the “mix” in sales will always “skew” the numbers. If the “mix” in sales changes from fewer lower priced homes to many as has happened in our market over the past few years, the change will appear to be more dramatic than it actually is. This has led to some recent misleading headlines and interpretations.
In summary, I believe that it is safe to say that the “mix” of sales, based on price levels, has dramatically changed. During the “Peak” sales were primarily over $500,000 with very few foreclosures. Over the past 3.5 years, we’ve seen an increase in the number of distressed properties. The ease of credit and the psychology of the markets prior to the “peak” were both factors that led to an increase in inventories fueled by the number of foreclosures coming onto the market.
We’re now seeing far more activity in the lower price levels, primarily below $500,000. Homes are now more affordable, investment activity has increased, plus federal incentives and low interest rates have been factors at this level.
Glen's East Bay Housing Numbers Through August 2010
September 7, 2010 by Glen Bell · View Comments
The August edition of Glen’s East Bay Housing Numbers is here & at the risk of sounding like a broken record, we’re seeing a continuation of the recent trends. Inventory still rising and the number of pending transactions (listings in contract, but not yet closed) continues to decline.
Taking a look of Pending Listings/Active Listings, this month we’re sitting at .86, which continues the downward trend back into buyer’s market territory (<1.00). It will be interesting to see if this downward velocity continues next month. Based on what we’re noticing with our own listings, my inclination is that we’ll start to see a reduction in the velocity of the downward trend.
So in summary, the August edition of Glen’s numbers shows that inventory is up, pendings are down & the pending over active ratio continues to trend back to the a buyer’s market. I spent a good portion of the weekend compiling some additional data for the past few months in Contra Costa & Alameda counties, which we’ll be publishing in the next few days, so stay tuned for that.
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 also download the entire copy of my numbers through August 31st here.
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
Glen’s July East Bay Housing Numbers
July 9, 2010 by Glen Bell · View Comments
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
Glen’s East Bay Housing Numbers (through May 2010)
June 3, 2010 by Glen Bell · View Comments
The May edition of Glen’s East Bay Housing Numbers show that housing inventories continued to climb at an unusually fast pace, up 64% since the beginning of the year. Since January 1st the month’s supply has increased from 1.7 months to 2.8 months while the pending over active ratio dropped from 1.66 to 1.18.
When comparing these numbers to May of 2009, we’re able to put this in a better perspective.
Last year’s May numbers are similar to this year’s as follows:
1) Active Listings (Homes for sale) are roughly within 2% of last year’s numbers.
2) Pending Sales (Homes in contract) are within 5% of last year’s numbers.
3) We now have a 2.8 month supply, the same as last year.
4) The Pending over active ratio was 1.15 last year, now 1.18.
Although it’s typical to see a swing up in homes coming onto the market from December to May, we haven’t seen an increase of this size so quickly since I have been tracking these numbers (2005).
I think the real question to ask here is not why are we seeing such a huge increase but why were December’s numbers so low?
Government programs and concerns over bank financial statements were an influence. REOs continued to dominate sales while few were coming on to replenish the market. As an REO agent, dealing in foreclosed properties, our assignments dropped off dramatically beginning last fall. Other REO agents confirmed similar circumstances. This is also consistent with what many media sources have indicated.
A comparison over a four month period, between this year and last year, shows a dramatic drop in REO sales. 32% of the sales over the last 4 months have been REOs. For the same four month period last year, 63% of sales were REOs.
This year’s increase was not dominated by distressed properties coming onto the market. Active listings, pending sales, and sales over the last 4 months are all down by about 5% compared to what they were at the beginning of the year.
From what we’re hearing, this may change in the coming months. Foreclosure activity has increased over the last few weeks and we, as well as other agents, are beginning to see new assignments.
All indications are that distressed properties will continue to be a factor for several years.
Glen’s East Bay Housing Numbers (through April 2010)
May 5, 2010 by Glen Bell · View Comments
April is done, the Federal Home Buying Tax Credit has finally expired and the latest edition of Glen’s East Bay Housing Numbers are in.
While there are no drastic changes to report, housing inventories in the East Bay have continued to climb and are up 54% since the beginning of the year. Even with that rise, we’re sitting at 2.6 months supply of homes for sale in the Contra Costa & Alameda counties. This is still well below normal inventory levels in the area and translates into fewer opportunities for buyers.
A flurry of activity prior to the expiring tax credit caused Pending sales to rise even faster, outpacing new listings coming onto the market by almost 2 to 1 over the last 30 days (592 vs 318). It will be interesting to see the effects of the expiring federal tax credit next month in the May report.
The Pending/Active ratio ticked upwards slightly from 1.28 last month, to 1.31 this month, which essentially means that we’re still in a moderate sellers market in the East Bay.
As for distressed sales, the percentage of REOs continue to drop, comprising only 15% of the active listings , down from 17% at the beginning of the year & 35% of the sales over the last 4 months, down from 37% at the beginning of the year.
The percentage of active & pending Short sale transactions also continues to drop. They currently comprise 28% of the active listings, down from 31% at the beginning of the year & 53% of the pendings, down from 59% at the beginning of the year. Closed Short sale transactions as a percentage of the total has increased from 17% at the beginning of the year to the current 20%
If you’re interested in talking more in depth about the East Bay housing market, feel free to call me directly 510-333-4460.
-Glen
Click here to download a copy of my East Bay housing numbers through April 2010
Glen's East Bay Housing Numbers (through March 2010)
April 5, 2010 by Glen Bell · View Comments
East Bay Housing Inventory Increasing.
For the third month in a row, we’ve noticed an increase in inventory. While this is normal for this time of year, the increase of nearly 46% is not; especially in comparison to the last 2 years. Last year we saw a drop in inventory over this same period of time of approximately 20%, while the year before was about even.
Although pending sales, (homes that are in contract) are also increasing, they are not keeping pace with the rise in inventory, (new homes coming onto the market). Months supply has increased from 1.7 months to a 2.5 month supply of inventory.
East Bay Housing Market Driven by Distressed Sales
What is significant is the amount of distressed properties that are still in this market. 57% of the sales in the last 4 months are distressed properties (37% foreclosures and 20% short sales). 72% of properties that are now in contract, (pending sales) are distressed properties, (16% foreclosures and 56% short sales). 47% of properties that are currently listed are distressed properties (17% foreclosures and 30% short sales).
This will vary from city to city, but overall, we’re seeing that distressed properties still play a large role in this market. However, fewer foreclosures have been coming onto the market. Short sales, on a whole take longer to close if at all. This is why we show so many as pending, and less that convert to an actual sale.
Trending towards Normal
There appears to be a developing trend. We seem to be swinging back to what would be considered more of a “normal market.” That is why the ratio between active and pending listings is dropping (from 1.66 to 1.28).
Typically, a ratio of one is considered normal, over 1 is considered a “seller’s” market, and under 1 is considered a “buyer’s” market. However, as you can see, this is not a typical market.
We may be seeing the beginning signs of a market stabilizing. Homes in the lower price range areas, especially in those areas that have taken the biggest “hits” seem to be reaching a “bottom” and are actually rising in some areas. However, with the weakness in the economy that remains, the jobs factor, and the increased number of homes that are in default, the housing recovery would appear to still be a long ways off.
If you’re interested in talking more in depth about the East Bay housing market, feel free to call me directly 510-333-4460
-Glen
Click here to download a copy of my East Bay housing numbers through March 2010
The Bay Area Housing Market Remains Fundamentaly Off Kilter
March 18, 2010 by Andy Kaufman · View Comments
The new Dataquick report for the Bay Area housing market came out today and if you’re looking for some good news, there’s not much in there for you. While prices are still holding their ground, the sales volume is down and financing still hard to get.
“The sales and price data remain choppy, with more ups and downs and inconsistencies than we’d typically see. It’s partly the season – January and February are often atypical and don’t serve as good barometers. But it’s more than that. The market remains fundamentally off kilter. There’s still relatively little lending going on in the upper price ranges, and little adjustable-rate financing, which had been vital to the Bay Area. Investor and cash-only deals remain well above normal, as does the level of sales involving distressed property,” said John Walsh, MDA DataQuick president.
“Despite the widening stability seen in the housing market in recent months, the outlook remains murky,” he said. “Whether prices will firm, or remain firm, will depend largely on three factors: The market’s response as the government reduces its housing stimulus, the economy’s ability to gain traction, and the decisions that lenders and borrowers will make in countless distress cases. The key question is how much more distressed inventory is coming, and when.”
That indeed IS the key question and it’s something that we’re constantly tracking, so stay tuned for more news from the trenches.
DQ News Bay Area Housing Chart (source)
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