Last month SD RE Prices up 2.1% sales up 34% . . . is market firming????

[schizo2buyORnot]

I haven’t bought yet . . . but articles like these make me think the bottom may not be far away . . . or worse may have already passed.

San Diego median prices increased 2.1 percent in March to $605,950 from February.

Despite the drop, David Cabot, president of the San Diego Association of Realtors, saw positive growth in the report.

“This is not the doom and gloom many see,” he said.

Cabot pointed out a 35.4 percent increase in number of sales in San Diego in March from just one month earlier. The state saw an 8.1 decrease for the same time period.

In addition, the state saw a 20.8 percent decrease in single-family detached home sales last month from March 2006, while San Diego saw a 19.7 percent decrease for the same period, according to CAR.

“Year over year it is very similar, but month to month San Diego is up,” said Cabot. “The change from February to March was dramatically up.”

He said sales numbers tracked down in San Diego slowed last year after the first quarter.

“So the fact that March of this year was lower than March last year shouldn’t surprise anybody because March of last year was pretty much the high point,”

http://www.sdbj.com/industry_article.asp?aID=69100611.10770402.1467596.515478.5574289.833&aID2=112883

I want to believe the “perfect storm” is coming and prices will dramatically plunge. But at the same time I don’t want my wishful thinking to prevent me from missing the opportunity to get in at a 10-15% reduction (i.e. now). The market is not acting like it is weakening at this point. Sure it has weakened from its high. But it does not appear to be weakening further. In fact it seems to act like it is firming some.

[an]

This is what I’d call a dead cat bounce. Nothing go up or down in a straight line. Every down trend have mini recovery only to have the down trend continue. Same w/ every up trend, there are many profit taking a long the way. Trend don’t usually change course in a year, be it stock or real estate. Unless we all wrong and this is just some profit taking before we resume double digit appreciation. In that case, buy now and your 500k house will be a million dollar house in several years. However, all fundamentals are saying otherwise. We’ll just have to wait and see. Everybody will predict the bottom but they all are just guesses and no one will know they’re right or not until many years after the bottom and looking back. Only then will you know if it’s a true bottom or just dead cat bounce.

[bubble_contagion]

There seems to be a lot of spin on that article. Quoting median prices of detached homes and then overall sales. I only trust data from reliable sources. This article data is from a Realtor who is citing a report made by the California Association of Realtors.

The below sales data is from Dataquick:

02/05: 3,442
03/05: 5,018

In 2005 there was a 46% Month-to-Month increase in sales. Price declines started in 2005.

02/2006: 3,035
03/2006: 4,367

In 2006 there was a 43% Month-to-Month increase in sales. No bottom in 2006.

02/07: 2,863
03/07: 3,218

In 2007 the Month-to-Month increase was 12%, Y-O-Y there was a decrease of 26%.

The median price for March was up, but the price per square foot was down. Interpret the data anyway you like. To me, there is no sign of a bottom yet.

[SD Realtor]

Hang in there schizo… you and I are in the same boat, I am waiting to buy as well… but no we are not at or near the bottom…. Long term trends do not go straight down they have small cyclical rallies on the way down. Spring is always a seasonal rally point for real estate. Don’t focus on hitting the bottom unless you are willing to wait a few years. If you cannot wait that long, (and I know for my family I will not be able to) at least try to hang in there until later in the summer.

SD Realtor

[Bugs]

Oh those kids; they’re always up to some mischief. He’s comparing March to February. Think about that. EVERY March shows an increase of sales relative to the February preceding it.

What he didn’t say was that the volume this March was down by about 20% compared to March of 2006, and that’s saying something. The overall volume of sales in San Diego for 2006 (at 29,000+) was the lowest since 1997 (at 27,200). In other words, 2007 is shaping up to be even worse than 2006. If this keeps up we’re going to pass 1997 and approach on the lows of 1996 (22,800).

The median price is misleading too, because many of the sellers are including all sorts of incentives that get counted in with those sales prices. If those incentives were taken out of those sale prices it would show a very definite decline.

[an]

One thing to add with Bugs comment regarding median, it doesn’t take into consideration of shift in buyers. Lets say last month median is 500k and that 2 people buy @400k, 1 person @ 500k, and 2 people @ 600k. If this month, 2 people buy at the same $500k house at $400k, one person buy the $600k house @ $500k, and 2 people buy a $700k house @ 600k. The median would stay the same, but price have dropped 100k. Also, if only 1 person buy a $500k house @ $400k, 1 person buy a $600k house @ $500k, 1 person buy a $600k house @ $550k, and 2 people buy a $700k house @ 600k, the median would be $550k. Although median will show a rise of 10%, real price dropped $100k. That’s why I don’t care much about median price anymore. They’re for the masses who don’t want to do more research. Median statistic either hide the drop in price or shift in buyers, or both. With the sub-prime fiasco and tightening lending standard for sub-prime, I’m pretty sure there’s less people buying low end house today than before this whole fiasco. That will shift the median up.

[Bubblesitter]

Yes, watch out for those news spinners. Most industries especially housing are seasonal, that is why Y-o-Y (year-over-Year) sales is the key number.

e.g. ACME Flowers issued a press relese today. Flower sales jump 400% January to Feb! An incredible rise in sales from January. News update: ACME Flowers Stock tumbled on analyst downgrade, and after reports that their market share saw a substantial decrease during this year’s busy Valentine’s day season.

This is yet another example of lazy reporting, relying on a single biased source, and honing in on an incorrect number.

[LA_Renter]

How many ways can you put lipstick on a pig??

“So the fact that March of this year was lower than March last year shouldn’t surprise anybody because March of last year was pretty much the high point,”

Now as I recall March 06 sales were well below March 05 sales. I looked to bubble tracking for a reference;

03/07: (3,218)___03/06: (4,367)___03/05: (5,018)

So March of last year was not the high point. In fact looking at it from this angle looks like the YOY decreases are actually escalating.

[Anonymous]

If anyone believes the bottom is here, then go ahead and buy, otherwise, it’s locked out forever.

Lereah has been calling the bottom every month now.

Reasons why RE will go up( or not ) :
1. Paulson and GS is pumping the stock market, so money is
being drained from RE

2. Employment in food services is going up.
Unemployment in high paying jobs (manufacturing, RE related) is going up.

3. Things that go up must come down, except for RE, it
always go up according to NAR.

4. Subprimes are being locked out. No more easy money
100+% loan.

5. Foreclosure is ramping up. Speculators are dieing.
GF is harder to find nowaday.

6. Gary Watts is forecasting 7% home price increase for
2007, (maybe 8% for 2008, 9% for 2009, 10% for 2010
you get the idea).

[temeculaguy]

Asianautica nailed it, median went down and should hold steady because the low end lost a lot of customers and will continue to lose people as the lenders stop giving money to people with bad credit. While there are exceptions, the majority of subprime buyers are in the bottom third of the prices. The middle is up next and will get hit as the move-up buyers fail to materialize. I am in the same boat as affordability has just drifted down to my range but you have to see this play out some more before you panic, even David Lereah in an interview on Monday said it wasn’t the bottom yet. At least let the first half of the summer come and go, by August if it is still moving downward the spin will change to “there has never been a better time to buy” as opposed to “things are stabilizing.”

If Walmart’s sales were to decline 30% but Nordstrom’s went up 2% would any economist declare the economy is fine?

[no_such_reality]

If Walmart’s sales were to decline 30% but Nordstrom’s went up 2% would any economist declare the economy is fine?

Hmm, let me check my Reagan Administration economists. 🙂

[Cow_tipping]

Submitted by bubble_contagion on April 28, 2007 – 12:15am.

The median price for March was up, but the price per square foot was down. Interpret the data anyway you like. To me, there is no sign of a bottom yet.

This means a bigger house sold at the median price right ???
Something similar ???
Cool.
Cow_tipping.

[sdrealtor]

Si!

One problem is how are they calculating the numbers. Is the price/sq ft a mean, is it the price/sq ft of the median house or is it the median of all the price/sq ft data for houses sold in March?

So many data problems……

[unbiasedobserver]

To the realtors or others with MLS access, how are April’s closed sales shaping up?

[5yearwaiter]

Don’t fall into these tactic statistics. I am afraid to see they may start compare week to week and day to day just by bringing up the figures like 100%. I assure the worst is yet to come…. and no one is going to bear the gaoline spike and house prices with the same salaries. just a common sense… however Govt is still battling how to manage this very low level and sacrifise few more billions on this to cover the truth..

5yearswaiter

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