San Diego Inventories flat year over year . . . other southwest/Calif. markets all higher. Why? Is SD near a bottom?

[schizo2buyORnot]

San Diego has long been touted as the RE “leader” in terms of moving through the RE cycle. To date this has been borne out. First to rise out of mid-90s slump, first to make a top, and first to start heading down. Below are current (this week) year over year inventory of unsold home comparisons for all of the major markets which bear some relation to San Diego. What does it mean and portend that San Diego inventories have stopped rising? Inventories stablizing are one of the first leading indicators of a bottom. Not that the bottom is here but a prerequisite to a bottom occurring. For the last several months San Diego inventory is flat.

San Jose:—————+26.9%
Riverside:————–+26.9%
Las Vegas:————–+23.1%
San Francisco:———-+23.0%
Phoenix:—————-+19.9%
Los Angeles:————+15.9%
Orange County:———-+9.6%
San Diego:————–+0.9%

http://www.housingtracker.net/

Note to all “phantom inventory” adherents: Site some evidence other than sporadic anecdotes to support the, so far unfounded, notion that there is a statistically significant amount of “phantom inventory.”

[waiting hawk]

So who again is going to buy all the houses you see for sale again?

[Arty]

Who cares? Who in their right minds will buy a house today anyway? Or maybe the inventory is flat because all of them can’t sell it and went into forclosure early. :O

[SD Realtor]

Right now it does not mean anything to me. As I have posted before I think you need to see yoy sales flatten out for several months in a row. We have not come close to that yet as sales volumes are still down each month when compared yoy. After that point is reached then I would start to look for inventory to flatten out. Once yoy sales are stable and not declining AND inventory is flat and not rising AND there is not a strong number of distress in the queue then you can start thinking a bottom is at hand.

Also I have strong evidence of phantom inventory. Right now I am doing work for a group up in the bay area. They have sent me several homes here in SD to price out and advise them on regarding possible purchases. This group is considering buying in bulk directly from lenders to then resell. Most all of the homes sent to me are not on the MLS at present. They HAVE BEEN on the MLS but they are now cancelled or expired. Not alot of these homes are in our favorite neighborhoods but there is indeed phantom inventory out there.

SD Realtor

[Fearful]

I think there is a great deal of noise in the inventory numbers. Look, for example at how much inventories fluctuate week to week on the main page. With those figures, one would conclude that the Florida real estate market is in fine shape.

Why there is so much noise in those figures is a question I leave to the more experienced among us.

[JWM in SD]

Nice try schizo2buyORnot but you are going to have to do better than that.

[Artifact]

According to the link you posted, inventory has risen 3.6% in the past month, 11% in 3 months and 36% in the past 6 months. I think we will agree that this has a component of seasonal cycling, but it also shows that inventories are rising, not staying flat as you claim. I am not sure of the “normal” cycles, but the next couple of months will be interesting to see if inventory rises or falls. I think a fall would be normal while a rise would be abnormal.

Given the fall off in sales, the more important number is the increase in months of inventory.

T

[Arraya]

I can count an extra 25-30% inventory with the new construction condos in my zipcode w/o putting much effort into it….

[(former)FormerSanDiegan]

Months of inventory is more important than the raw number.

San Diego is ahead of the other markets. The reduced inventory is the effect of people whoi thought they might want to sell and possibly move up, getting out of the market. What remains is a higher majority of those who have to sell because they are moving, can’t afford it, facing foreclosure, etc, as well as those who inherited their homes, and those who have held for a long time and need to downsize.
We are likely to see a similar effect in the other SO Cal markets next year.

[schizo2buyORnot]

1. The comparison and statement is year over year. Looking at the last month, 3months, 6months etc. Is misleading. What was the inventory at this time last year. (i.e. has the market gotten better, worse, or stabilized in the past year.)

2. For all of the comments on “phantom inventory” and people moving “up and out of the market” etc. etc. etc. Are you saying that these phenomenon are unique to San Diego only and don’t exist in . . . oh lets say Orange County or Riverside??? If you are going to make the argument that “phantom inventoy” (if it exists to any significant degree at all) and “people moving out of the market” as phenomena skewing inventory is only happening in San Diego and not elsewhere please explain why only in SD and not in OC or Riverside. Otherwise the point is still apt and valid . . . namely SD RE inventory is stable yoy for the past 2 months while other markets are higher. This could portend that SD is leading the way, as it has done throughout the cycle, of arriving at the bottom first. Thats all.

Impatient renter . . . .
In search of a crystal ball . . . .

[bubble_contagion]

schizo,

Inventory is at all time high but it is not much higher than last year. Sales have been down y-o-y for every month of 2007. This together with the record number of foreclosures, arms reset and the mortgage industry meltdown of last month clearly indicate that San diego is now at the bottom. Please go ahead and buy with confidence that house or condo that you want.

[Artifact]

Here is a plot overlaying the two years data from the above link.

From a pure statistical view, no they are not very different. But, like I said above, the next couple of months will be interesting. By September of last year, inventory was falling – this year it is still climbing. If that trend continues next month – or inventory stays flat – the difference can grow in a hurry. That of course does not account for the months of inventory either.

T
[img_assist|nid=4662|title=SFR/Condo Inventory|desc=|link=node|align=left|width=466|height=436]

[HLS]

People can see what is going on. Loans are adjusting, they would like to sell, but they see and hear that houses just aren’t selling, so they aren’t bothering to list them.
This wasn’t the situation in 2006.

There are plenty of people who would gladly sell their homes, but cannot afford to at todays price, without a huge loss.

I’m amazed at the number of people who say that they will wait until the market gets better.

The question is, how long can they afford to wait until they list or go into foreclosure.

Some people are bleeding their savings and retirement accounts to continue making their payments but will end up losing their homes anyway, and be near broke when they do.

[NotCranky]

That’s neat ART. Rhetorical question for OP: Inventory went down last year at this time…and significantly. Why wasn’t last AUG. the “bottom”? The other large socal metro areas were behind San Diego with regards to the negative numbers then too. Now if inventory stays flat would it make us think.. hey that is gong to be the bottom because last year inventory went down and the market continued to get worse? We have had big price declines pretty broadly, and sales volume continually dropping, and foreclosures increasing. Any hypothesis that inventory trends prove San Diego is nearing a bottom is just not logical.

[LA_Renter]

“I’m amazed at the number of people who say that they will wait until the market gets better.
The question is, how long can they afford to wait until they list or go into foreclosure.
Some people are bleeding their savings and retirement accounts to continue making their payments but will end up losing their homes anyway, and be near broke when they do.”

That is called chasing the rabbit into the the hole!

[Author]

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