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What is going on?


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2007 Mar 21, 2:17pm   15,667 views  191 comments

by Peter P   ➕follow (2)   💰tip   ignore  

There appears to be a significant drop in inventory on listing sites. At the same time, open house activities appear to be picking up. Could this be the start of a considerable spring bounce? What is going on?

Perhaps we need to brace for some impact.

[Note: This observation has not been confirmed by most participants of this blog. Please do not be alarmed.]

Peter P

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1   Peter P   2007 Mar 21, 2:28pm  

I have not kept a graph. Just a feel from running saved searches.

2   Randy H   2007 Mar 21, 2:35pm  

I get the same feel. In my search set there is a lot of activity, but I think the total inventory is only declining slightly. Lots of new stuff is listing too. I think there's rising churn. Some people pulling their listings, others offering at "more reasonable" prices, and the regulars just sitting there.

I've mentioned a couple times I have an in at one of the larger exclusive agencies. This February blew out last Feb's in total sales volume. Of course, this might be because prices are coming down and volume is increasing. So far I hear March looks to blow the doors off of last March. Again, probably a volume not price factor. But it means people are buying the ~$2m+ homes.

3   Peter P   2007 Mar 21, 2:41pm  

We should definitely "celebrate" the spring bounce with beer! :)

4   Peter P   2007 Mar 21, 2:42pm  

It is true that a lot of people have been on the sideline. These people will just right into the market. It is going to take a while.

5   Peter P   2007 Mar 21, 2:50pm  

Can you site specific areas you’re seeing this in?

I am looking at the San Jose / Santa Clara / Sunnyvale / Mountain View area.

6   Brand165   2007 Mar 21, 2:50pm  

Peter, a drop in listed inventory might not indicate that people are buying. It might just mean that a lot of listings got yanked. I bet that California is going to see a major credit squeeze, considering that money suppliers have cut off the "creative" neg-am and IO loans for subprime and Alt-A.

On the other hand, I do have some bad news from the Fort Collins, CO front. Remember those $250K-600K downtown lofts that I am fond of mocking? In just the last month, it appears that the most desirable buildings have nearly sold out. I don't know who the heck is buying these units, but they are braver than I. But perhaps I might enjoy the luxurious lifestyle by renting up there for a while. We shall see. :)

I have the impression in hallway discussions that many people feel that the subprime thing is "out in the open", and thus can do no more damage to the economy or mortgages. The Dow is surging forward again, and that seems to give people confidence in the economy.

I have never really followed a dead cat bounce in real estate or the stock market. I do suspect that people who are exuberant at the moment could easily be deflated by another fall in the stock market or a spike in interest rates.

7   Peter P   2007 Mar 21, 2:51pm  

Are those school addicts going out in force? When do they have to close before being able to register for school?

8   Peter P   2007 Mar 21, 2:53pm  

Peter, a drop in listed inventory might not indicate that people are buying.

I understand. But a slight increase in buying activity on light inventory will lead to bidding wars and temporarily booming prices.

9   lunarpark   2007 Mar 21, 3:03pm  

My numbers (using mlslistings.com) shows inventory in Santa Clara County is creeping up on a daily basis. Where are you getting your numbers?

However, "prime" areas like Mountain View and Saratoga seem pretty flat. I don't see actual declining inventory in any area that I am tracking.

10   Peter P   2007 Mar 21, 3:06pm  

My numbers (using mlslistings.com) shows inventory in Santa Clara County is creeping up on a daily basis. Where are you getting your numbers?

Probably because I concentrate on newer condos and townhouses. Strangely, prices are not higher than those of last year.

11   Peter P   2007 Mar 21, 3:06pm  

I don’t see actual declining inventory in any area that I am tracking.

Good to hear.

12   lunarpark   2007 Mar 21, 3:09pm  

I lump everything together (condo/SFH). I agree that prices seem around the same as last year. The "bigger" inventory gains (where I only track SFH) seem to be in San Jose (Willow Glen/Rose Garden). Cupertino and Sunnyvale have almost exactly the same amount of inventory as they did at this time last year. Mtn. View has significantly lower inventory YOY.

13   Mike/a.k.a.Sage   2007 Mar 21, 3:29pm  

Does anyone have information about RE agents refusing to take listings, if home isn't priced right?

14   surfer-x   2007 Mar 21, 3:51pm  

Oh fuck yeah, housing is set for a steep run-up, there is a ton of pent up demand coupled with a robust manufacturing sector and ample googlebucks. Fuck just yesterday I bought something from Google, oh, wait a minute, come to think of it, I have never actually paid google anything. But the BA is just so gosh darn special, what with all that great scenery and weather. Oh wait a minute. Oh fuck it. It just goes up doesn't it?

15   Peter P   2007 Mar 21, 3:57pm  

BA is special. Especially ghetto.

16   cb   2007 Mar 21, 4:10pm  

BA is special, when my friends come visit, they always wondered why it is so dark everywhere. Here is a link I took from a RW, it lists the SFH around my area (Santa Clara), looks like some are still getting over asking and DOM is short for some houses. Maybe because we have more street lights than other areas. I tend to think it's mostly falling knives catchers.

http://isvr.net/usr/1014239373/CustomPages/rivermarkSFMarketUpdate.htm

17   Peter P   2007 Mar 21, 4:15pm  

Perhaps my searches have glitches then. Let's forget about this thread...

18   e   2007 Mar 21, 4:31pm  

Perhaps my searches have glitches then. Let’s forget about this thread…

I dunno... my personal driving seems to indicate that levels aren't all that great

19   Jimbo   2007 Mar 21, 5:43pm  

Listings are up, sales are up, prices are down just a tiny bit in Noe Valley.

Sales really have picked up. People have started pricing things at 20% less than last year, igniting bidding wars. Selling prices are down 5-10% from the peak a year and a half ago.

But sales were dead last year and have really picked up. I only closely follow the market here.

I sort of watch a few West of Twin Peak neighborhoods, but not closely enough to really offer an opinion of them.

20   Bruce   2007 Mar 21, 6:33pm  

OT:

John Rubino has posted parts of a Charlotte, NC story about foreclosures flying 'under the radar'.

We often say here that real estate is local. Looks like regulation and oversight may just be local too.

http://www.safehaven.com/article-7190.htm

21   SFWoman   2007 Mar 21, 10:52pm  

In SF there seem to be a LOT of new condos and some TICs that are not listed on the MLS. I think the MLS numbers don't represent everything.

A lot of the newer places have large buyers 'incentives'.

22   DinOR   2007 Mar 21, 11:09pm  

PAR,

(from previous)

Thanks for the Bloomberg link to the Jim Grant interview! Due to the fact that the whole process of "securitizing" of MBS was done behind closed doors the news anchors really had no choice but to let Jim do his thing. Most of us really don't understand how that process takes place (in spite of what we may have thought). He really hammered the ratings services. Good for Jim!

23   Michael Holliday   2007 Mar 21, 11:15pm  

...buzz
...buzz
...buzz

A hand reaches out from a tumble of covers, like a zombie arm from some grade B sci fi flick emerging from the grave...it fumbles for the alarm to shut it off...it seem to have a life of its own, as walks across the nightstand...fingers do the walking, bumping into thinks like the night lamp...probing like antennae

Knocks over cup of Hi-C fruit punch in the process...
Day-old punch, with tiny dead moth floating in it, puddles on the nightstand next to the two-day old Dominos pizza slice, runs down the side, and dribbles in drabs onto the carpet below, making semi-evenly spaced but clearly audible tapping sounds...

Time to get up and face another day in the housing market. Low and behold, housing is supposedly going up again!

Fumbling fingers make their way across the night stand...

Hand touches chocolate chip cookie & grabs it...
Brings it to mouth with closed eyes...
Mouth opens...lip touches tip of rouch cookie...taste is semi-sweet...teeth take a bite...a muffled crunch-munching sound is made with closed mouth...half the cookie crumbles onto the covers...crumbs tumble like quarters out of a jackpotting slot machine...chocolate chips stick to cover...

A shard of morning sunlight makes it through a crack in the blinds & strikes me on the left eye, which opens...

I grab the remote and turn on CNBC...fresh, young, blond-haired chick smiles and says real estate appears to be changing direction. Her infectious smile and enthusiasm bely a deep, more disturbing truth about the housing market in general and the US economy in particular:

Shit is about to hit the fan!

I notice she has a little piece of red meat stuck between her front teeth. Perhaps a bit of breakfast sausage? It bothers me.

I lean forward to get a better look.

The little piece of meat disturbs me because it totally throws off her wholesome look. It is a sign, an omen. A harbinger of dark truth behind a clean, All-American pretense...

24   Peter P   2007 Mar 22, 12:08am  

There also seems to be quite a few unlisted homes on CL.

25   NARB   2007 Mar 22, 12:16am  

M Holliday; "I notice she has a little piece of red meat stuck between her front teeth. Perhaps a bit of breakfast sausage? It bothers me."

High-definition TV changes everything. Actualy, this time it is different because now we get to watch it in high def.

26   PAR   2007 Mar 22, 12:30am  

DinOR, no prob. I quite enjoyed that interview. I'm becoming quite addicted to bloomberg, both video and print. I like Baum a lot.
http://www.bloomberg.com/news/commentary/baum.html

Michael Holiday is the housing bubble's version of Charles Bukowski... Addicted to fruit punch and cookies instead of booze, of course.

27   Brent   2007 Mar 22, 12:30am  

Speaking of fear tactics, could realtors be pointing out to potential buyers that funding is drying up; and that it may again be now or never to get into the market?

28   FormerAptBroker   2007 Mar 22, 12:34am  

Mike a.k.a/Sage Says:

> Does anyone have information about RE
> agents refusing to take listings, if home
> isn't priced right?

Most (but not all) people that don't price their home to sell fall in to two camps, the people who don't want to sell or the people who can't sell.

To use a car analogy:

The person who does not want to sell is like the guy who hired a
professional pin striper to write FOR SALE and his hone number in the back
window of his '57 Chevy six years ago.

The person who can't sell is like the guy who bought the loaded Ford V10
pickup last year and owes a lot more than people are paying got trucks that get 8 mpg in a world of $3.50/gal gas.

There are only two reasons that a real estate agent will take an overpriced
listing:

1. They are desperate and don't have any other listings (and the odds of
getting paid on an overpriced listing are better than playing the lottery).

2. The house is high profile and will get them free publicity (I don't think
that guy that listed the University of Phoenix guys house in Pacific Heights
a couple years back really thought it was going to sell for $65mm).

29   Peter P   2007 Mar 22, 12:38am  

Speaking of fear tactics, could realtors be pointing out to potential buyers that funding is drying up; and that it may again be now or never to get into the market?

If funding is really drying up, who still wants to buy?

30   PAR   2007 Mar 22, 12:41am  

Brent, of course they are. Just like they are telling people that interest rates are still hanging around the lowest they've been in 30 years. It's perverse logic too, when you consider all the news about people getting in over their heads. "Quick, you better get into a toxic loan that you can't really afford before someone comes to their senses and no longer offers it to you!"

31   PAR   2007 Mar 22, 12:43am  

Funding isn't that dry... yet.

32   Brent   2007 Mar 22, 12:46am  

Peter p-

That's a higher altitude question than most can answer. Remember the Red Bull fortune is based on creating the fear of being grounded, and our current political duopoly thrives on the fear of throwing away one's vote.

33   Peter P   2007 Mar 22, 12:57am  

Fear is really interesting.

34   DinOR   2007 Mar 22, 1:14am  

I'm hardly the first to notice all the "phantom" inventory out there and C/L is but one example. Here in the Portland market we have Hasson Realtors, a 1% shop that seems to be real popular with the Portland DIY crowd.

Just last night I'd seen a home just outside of Salem, OR that had all the tell tale marks of a flip gone bad. Originally built in 1935 this 1,000 s/f wonder was given a quick "once over" and priced at 300K. (Now it's posted on MLS as a "new" listing) and priced at 240K. What makes it noteworthy is this 20% reduction comes in the lower end of our inventory. Most everything else is priced between 400 and 600K.

35   Randy H   2007 Mar 22, 1:20am  

I'm looking at a hot sheet for top end homes in SF/Marin. Just for one office; may not be representative of others.

New listings: 19
Canceled listings: 3
Expired listings: 15

Sold: 4
Contingent: 1
Pending: 16

Price reduced: 18
Price increased: 5

Dropped: 7

The sold $ in 3 of 4 is less than list $, but only slightly. Biggest delta is $45,000 on a $2.795m home. 1 of 4 went over by $15,000 (on a $3.125m).

--
Question for experts:

What does it mean when a homes sells and is recorded twice in the same day. Example: 3/1/07-$1,900,000 then 3/1/07-$1,300,000 recorded the same day to the same owner? The home was listed at $1,985,000.

36   netdance   2007 Mar 22, 1:26am  

One data point:
http://www.housingtracker.net/askingprices/California/SanJose-Sunnyvale-SantaClara/

They show *really* big changes.

But it's probably just a blib. Looking around, there are similar blips in Chicago, and last week, in Jacksonville.

37   netdance   2007 Mar 22, 1:28am  

Btw - that data comes from Realtor.com, so I think Peter and housingtracker are getting their bad data from the same place.

no noticable drop in MLSListings.com. Unless you count prices - those are dropping noticeably.

38   Peter P   2007 Mar 22, 1:51am  

But it’s probably just a blib.

Could the blib be explained astrologically? :)

39   HARM   2007 Mar 22, 1:57am  

@PAR,

Thanks for the link --the Rentometer is pretty cool!

40   Glen   2007 Mar 22, 2:34am  

Randy,

Not sure of the answer to your question, but I have a theory. Could it be that the $1.3M refers to the reconveyance of the prior deed of trust (eg: seller's lien), which would record at close of escrow, along with the new deed of trust (buyer's lien)?

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