Months Supply: price drops are neighborhood specific

[powayseller]

Thanks to SD Realtor and Bob Casagrand, for shedding further light on the importance of *not* lumping all housing together. Housing desireability, and thus rises and drops, vary by zip code, by neighborhood, and even by models within a neighborhood.

DOM is not a proxy for demand, as this number is not accurately represented in the MLS.

Months supply seems to be the best indicator of demand. Oceanside has 12 months supply, so expect huge price drops over there.

So for any of you realtors on this forum, what are the ranges of months supply in San Diego? What is the correlation with rising months supply and price drops?

[SD Realtor]

Hi PS –

Right now mom is changing diapers on number 1 and I am feeding number 2. If I have time later on tonite I will see if I can give you a few numbers for a couple of zip codes…

BTW let’s also thank John H who posted some EXCELLENT information on months of inventory. As stated (by both you and him) I think it is a much more accurate method to gauge individual areas.

[Bugs]

I’m having a deja vu day. First it was the “Clairemont flipper” thread and now it’s this. As I recall, sdrealtor brought this to our attention some months ago and we discussed it then. At the time we were looking at 6 and 7 month supplies in the ‘burbs and more in the outlying areaa like Alpine and Valley Center.

I think it’s a good topic to keep track of and update.

[powayseller]

Regarding John Hokkanen’s Post Reported Market Times, he explains his method of getting months of inventory.

He wrote
“What I like about the months of inventory approach is that you can see how different price brackets in different areas are faring. I’ve run the numbers for many areas in North County, and there are some clear breaking points. In most of the coastal areas (Oceanside, Encinitas, Carlsbad, etc.), the inventory for any bracket under $1M is under 10 months, usually around 7-8. Above $1M, things begin to soften (e.g., Encinitas goes to 16 months of inventory above $1.25M), but, for the most part, things are delayed but not in a crisis situation.

HOWEVER, if you compare the months of inventory to the inland markets, things change pretty dramatically. For San Marcos and Escondido, the over $1.25M price bracket yields around THREE YEARS of inventory. That number is GROWING because the sales rate has, since March, declined for the most part. ” – John Hokkanen

John, could you post more months of inventory by zip code, and also, for neighborhoods within zip codes if there happens to be a difference for certain tracts?

[SD Renter]

I just checked the MLS for three Vista ZIPs and came up with 8.4 months of inventory. I’m glad to know about this. I had assumed everywhere reflected the 6 months of inventory reported by CAR.

The SD MLS is owned by Sandicor. Who owns Sandicor and how can we lobby them to modify the MLS software such that agents can’t reset with zero days on market?

Ok, that was hijacking the thread. Ignore it. This is just my first post on Piggington, and I got overexhuberant(sp?).

[powayseller]

We all hijack threads around here, no problem. This topic is interesting enough that you could start a thread on it. Many people have asked the same question.

[SD Realtor]

Someone can feel free to modify this particular posting and make it it’s own thread.

SD Renter Sandicor does own the MLS but SDAR monitors and enforces the rules. When you take a listing you (the agent can edit the listing at any time. Recall your broker owns the listing and can do the same)

You cannot simply change the market time ad hoc. When you first enter the listing information the user interface is a template. Most all of the entries are pull down tabs. Some of them you can type in fields such as in the remarks or supplements. Anyways one of the fields you fill in is the expiration date.

Now once your listing goes active the market time will never reset to zero until the listing expires. Once the listing expires the listing goes from active to expired status. At this point only the broker may move it back to active status, AND the market time will not go back to zero.

HOWEVER, if the listing agreement has been renewed or a new one is put in place, the agent may submit a new listing on the MLS and that WILL have a market time of zero days.

Alternately the listing may be moved to the cancelled status. This means that either the broker or the seller cancelled thier listing agreement. Again, the listing will now move from active to cancelled status. Only the broker may move it back to active at this point if the two parties reconciled and market time would resume and NOT revert to zero. However once a new listing agreement is signed whether it is with the same broker or a different brokerage, the listing would be entered as a new listing on the MLS and market time would go to zero.

Anyways just letting you guys know how it works.

[PerryChase]

Thanks SD Realtor. What does the “inactive” i see on Zip Realty mean?

[SD Realtor]

Perry I am not sure what inactive means on Zip. The categories for our (Sandicor) MLS are

active – actively for sale (or in escrow with 72 first right of refusal, sales contingency)
pending – in escrow
sold – closed escrow and sold
expired – listing period of the contract has expired
cancelled – broker and seller mutually agreed to cancel the contract
withdrawn – seller is still under contract with broker but the home is not actively for sale

For the sake of zip I bet inactive is expired, cancelled or withdrawn.

*****

Also remember, Zip, Realtor, Housevalues, all of the on line providers get downloads daily from each MLS that they advertise. There is always a time lag. Usually it is only a day or two but I have seen 72 hour lags at most.

Finally even when you go to a brokers site, big guy, little guy, full service or limited service, all of those listings are provided by a service called IDX. IDX also receives thier downloads from the MLS in the exact same manner as the sites we listed above.

In ALL cases some of the information is distilled by the MLS before being downloaded. This of course is the CBB, confidential remarks and a few other but less important items.

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