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

[an]

Just because we’re only up less than 1% from last year doesn’t make it a sign the bottom is coming. There’s a major difference between this time last year and right now: 1)Inventory drop this time last year compare to August, this year, we’re still rising. 2) We’re now at record high inventory again. Doesn’t matter how you slice it, it’s still record inventory. 3) We’re also at record high in month of supply as well since sales are down drastically compare to last year and inventory is “flat” compare to last year. 4) Last year did not have the jumbo/sub-prime issue that this year have. 5) Last year does not have a major reset coming in a month (October is supposed to have $14B worth of loan resetting, IIRC).

The next 2-3 months will be very telling how far this rabbit hole goes. We already taken the red pill, now enjoy the ride.

[Bugs]

S2Buy,

Sometimes you crack me up. In one breath you acknowledge that SD has been the canary market and entered into an oversupply of listings before most other markets in California, and then in the next breath you wonder why – over the last 12 months – it hasn’t increased as much as all the other markets that are just now catching up.

Try this on for size, SD is not getting better; the other markets are just getting worse and are only now joining SD in the decline.

While you’re at it you can consider this – the volume of sales activity in SD is dropping like a rock. At present it looks like August 2007 will end up showing 20% fewer sales than Agust 2006, and 2006 was the worst year for sales we’ve had since 1997.

Even though the number of listings isn’t rising, the ratio of listings to sales continues to get markedly worse. Searching for signs of the bottom by noting a levelling off of the number of listings at the end of the summer is basically a waste of time. If you’re only going to look at a narrow slice of the picture you’d be better served looking at the number of sales that are closing. When we start exceeding an average of 2,600 sales a month here you’ll know that things might be getting close to turning around.

[HereWeGo]

I’d like to see Artifact’s chart replotted with the y axis showing “months of inventory” rather than raw inventory.

[4runner]

Bugs,

Thank you.

[SHILOH]

There have been other posts that claimed there was months and months of inventory….plus, a continuation of building and no buying going on. How could inventory have stabilized?

Friday, August 31, 2007
San Diego County Inventory (Sales)
Tracking San Diego County, California

Population 2006: 3.07 million
1/01/2006 Listing per population ratio 1:220
7/31/2006 Listing per population ratio 1:131

01/2006: 16,161 (2,898)___01/2005: (3,324)
02/2006: 17,262 (3,035)___02/2005: (3,442)
03/2006: 18,261 (4,367)___03/2005: (5,018)
04/2006: 19,480 (3,974)___04/2005: (5,345)
05/2006: 21,175 (4,480)___05/2005: (5,141)
06/2006: 22,588 (4,533)___06/2005: (5,663)
07/2006: 23,385 (3,584)___07/2005: 14,176 (4,765)
08/2006: 23,381 (3,666)___08/2005: 15,240 (5,379)
09/2006: 22,710 (3,207)___09/2005: 16,081 (4,935)
10/2006: 21,692 (3,282)___10/2005: 16,490 (4,155)
11/2006: 19,831 (2,987)___11/2005: 16,072 (3,937)
12/2006: 17,223 (3,613)___12/2005: 14,591 (4,262)

Population 2007: 3.10 million
1/01/2007 Listing per population ratio 1:191
6/10/2007 Listing per population ratio 1:144

01/01: 16,260
01/31: 17,109 (2,772)___01/2006: 16,161 (2,898)
02/28: 17,544 (2,863)___02/2006: 17,262 (3,035)
03/31: 18,638 (3,218)___03/2006: 18,261 (4,367)
04/30: 20,122 (3,436)___04/2006: 19,480 (3,974)
05/31: 21,169 (3,385)___05/2006: 21,175 (4,480)
06/30: 22,268 (3,510)___06/2006: 22,588 (4,533)
07/31: 22,551 (3,106)___07/2006: 23,385 (3,584)
08/10: 22,636
08/20: 23,006
08/31: 23,518

All-time Record high inventory: 23,385 homes, July 2006.
All-time low inventory: 2,301 homes, March 2004.
Previous Record high inventory: 19,250 homes, July 1995.
North County Times 4/12/06

Population 1995: 2.66 million
Listing per population ratio 7/1995: 1:138
Population adjusted record high inventory: 22,174 homes.

[img_assist|nid=4665|title=SD Inventory|desc=|link=node|align=center|width=466|height=350] taken from:
http://bubbletracking.blogspot.com/2007/08/san-diego-inventory-back-to-record-high.html

[Artifact]

HWG – I can do that easily enough, I just need to get the sales data – that would not be a perfect comparison but should serve to give an estimate – anyone know where to get those numbers? I will look myself, but I am sure someone here can find them faster than me.

Edit: Nevermind – I forgot about those data – easy enough now.

[Artifact]

I don’t know why, but the numbers above don’t match exactly with the numbers from the link in the first post. So I replotted the raw numbers and then made a second plot with the inventory/sales number. There was obviously a big jump from Dec 2006 to Jan 2007 that I think must be something funny with listings?

The first plot shows more or less the same trend as my original figure and the months of inventory through July was already higher than any point in 2006 – since we know sales fell in August even without an actual number and inventory grew, I think it is safe to say that once we have that number, it will be higher than th eAugust 2006 number.

[img_assist|nid=4666|title= Raw Inventory Numbers|desc=|link=node|align=left|width=466|height=336]
[img_assist|nid=4667|title= Months of Inventory|desc=|link=node|align=left|width=466|height=336]

[Ex-SD]

schizo2buyORnot: Yes….we’re at the bottom. Go out and buy a $800k house, today! Since you insist on belaboring this foolishness, why don’t you buy several rental properties to fill out your portfolio?

Seriously, you are either trolling or just bored because I don’t get from your postings that you are a stupid person. Only a totally ignorant person or an idiot who cannot read and desiminate information from a variety of credible sources would buy a home in SoCal right now. (The only exception to my statement would be someone who is absolutely filthy rich and won’t miss the large amount of money that they will lose when the bottom really hits)

[schizo2buyORnot]

Ex-SD,

On the contrary . . . I am a very skeptical person who wants to see some hard information to base a crucial decision on (when is the right time to buy a SFH in a decent neighborhood in SD). Anecdotes and pontifications that “the market is going done 50% from here guaranteed . . . .” etc. etc. blah blah blah don’t interest me. Much of what I read here is this type of gibberish, but certainly not all. There is some very good information from some very sound reasoned persons. The problem I think is that aside from this group (the sound reasoned group) there is a healthy group of what I think of as the Piggington “sour grapes crowd” which is to say people who either 1) missed the last boom entirely and are bitter and hoping for a catastrophic decline to rectify their poor judgement of the past, or 2) people who either weren’t financially in a posistion to buy during the early stages of the boom or people (like me) who moved to SD towards the end of the boom and lament this coming to the party late. This leads to a lot of emotion and wishful thinking behind much of their statements. At least with respect to the first group, they totally mis-timed the market on the way up whats not to say their same flawed reason is going to make them mis-time the market when it bottoms and turns WHICH EVENTUALLY IT WILL DO . . . . The key question is when (if only I had that crystal ball I’ve been searching for . . . .). I have lived through various asset market ups and downs in both RE and equities. It is my experience that the actual moment of the turn is discerned by very few and that those few had the discipline to view things in a dispassionate and critical way devoid of emotion. The bottom line is its possible to detect signs or harbingers of a turn (up or down) but very few do it. Everyone else is left with the “damn I woulda coulda shoulda” after the turn is clearly evident and its either too late or very late. I throw up questions to PIGS and do get back nuggets of good info from the PIG crowd, but at the same time have to abide the mindless blather of the “sour grapes” crowd. One leading indicator (for those in Rio Linda that means the turn has not happened yet but a clue that it may be coming) of a turn is stablizing inventory. SD inventory has stablized yet other factors still indicate that bottom is distant. I just want to time the most significant financial decision I probably will make in the future (by a SFH in SD in a good neighborhood) as closely to the bottom as possible . . . . thats all. 🙂

Impatient renter . . . .

In search of a crystal ball . . . .

[Bugs]

I guess stability is in the eye of the beholder. I don’t call a market wherein there are 9.7 available listings for every single sale indicative of a market where prices will be stable. I wouldn’t even call it stable if it dropped to 6 listings per sale.

The raw number of listings may look somewhat stable or in decline, but the relationship between the number of listings vs. sales continues in decline due to the drop in sales activity. 23,000 listings back when we had a 29,000 sale year (2006) actually indicated to a somewhat more stable market than the current 20,800 listings in a 25,000 sale year (2007). Regardless, both ratios are bad news for price stability; they only differ by degree.

[Ex-SD]

schizo2buyORnot: Sorry, but I don’t fit into the sour grapes crowd. I cashed out in the spring of 2005 (made a big, big bundle) and moved to South Carolina.

I’m not sure if you think that when the bottom hits that all of sudden prices will suddenly start climbing again? If not, what’s the rush? When the bottom hits, it’s going to sit there for a good while. You will have plenty of time to find the right property at the right price with a very thinned out group of qualified buyers to compete against for these properties. You can take that to the bank.

[schizo2buyORnot]

Ex-SD,

Congrats on your good fortune . . . I wish misfortune on no one. So I can “take it to the bank” that all of the future buyers which are stacking up on the sidelines (like me) and renting will take a casual nonchalant entry into the market such that I will have days, weeks, months of forewarning and notice before a measurable appreciation trend becomes apparent. That the areas I want my family to live in CV, 4S, Scripps, etc. will not see a significant increase in buyer activity once the collective wisdom assesses that the market has turned. I can absolutely rely (synonymous with “take it to the bank”) that me and everyone else crowding the sidelines of future buyers wont cause anything like a spike up in prices when the market eventually turns. Sorry if I don’t share your degree of certainty about a turn in an asset market my experience to date has been the opposite. The turn is hard to detect.

Ex-SD On a side note if you sold, made your bundle, and live in S. Carolina why do you spend so much time on this blog for “Southern California Housing Bubble News and Analysis” especially as a poster. I don’t detect gloating do I???

Psst! Quick someone pin a star on Ex-SDs forehead for his RE investing acumen and genious for selling and “cashing out” when he did.

In search of a crystal ball . . . .

[JWM in SD]

“There is some very good information from some very sound reasoned persons. The problem I think is that aside from this group (the sound reasoned group) there is a healthy group of what I think of as the Piggington “sour grapes crowd” which is to say people who either 1) missed the last boom entirely and are bitter and hoping for a catastrophic decline to rectify their poor judgement of the past, or 2) people who either weren’t financially in a posistion to buy during the early stages of the boom or people (like me) who moved to SD towards the end of the boom and lament this coming to the party late.”

Last I checked, this is a free site. You get what you pay for (in your case, you got more). Don’t like it, then don’t post.

[schizo2buyORnot]

JWM Your right . . . my point exactly. The site is a mixed bag. Some come for the wisdom of the “sound reasoned persons” and some come to chant “rah rah rah the market is going to crash and burn and then we are going to get into SD SFH at bargain basement prices!!!” . . . (while crossing their fingers and wishing and hoping it to occur.) It’s a big tent there’s room for both you just have to be able to distinguish between the two.

In search of a crystal ball . . . .

[little lady]

schizo2buyORnot,

We all have this information and then some….Apparently you can’t read, because if your following housing tracker, inventories in San Diego are on the rise…

SORRY

[Author]

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