Continuing with my ongoing series of posts about market conditions in various geographical areas within our market, I'm moving on to South Vandenberg Village this week. What we're talking about here are houses in Vandenberg Village on the south side of the highway, not including condos or the newer homes at Providence Landing (those get covered elsewhere).
In the last couple of South Village posts I had noted that there was next to nothing on the market in the area. That hasn't changed. We have two - yes, you read that right, two - houses on the market as I write this. One is an REO, and the other is a seriously overpriced house with a relocation company. This area isn't inventory-thin, it's inventory-anorexic. We don't have any contingent sales here at the moment.
We do have 4 pending units on the market right now. Three of them are REO's and the other one is a traditional seller. Interestingly, the three REO's took a while to get into escrow - on average about 50 days. That's a lot longer than our market average, especially for an REO. But the traditional seller was in escrow in 8 days.
We've only had one sale up there in the past three months. That one was a short sale. It was a nice unit on a perimeter lot with some views, and it got a little more than I might have thought, which is probably a good sign for the neighborhood. If we had a little more data, I'd have a stronger opinion about price trends here, but on the whole, I think that it's probably been stable, and possibly appreciating a little bit.
Wednesday, October 28, 2009
Monday, October 26, 2009
Monday Morning Numbers 10/26/09
Hey, wasn't I just here? Well, I'm back to take a look at our Monday market stats:
Active Listings: 57
Contingent Listings: 61
Pending Listings: 65 (35.5% of the inventory)
New listings: 4
Months of inventory: 3.8
Click here for an updated price per square foot chart.
If you've been reading this blog regularly, you might remember about six months or so ago that I made note that the number of listings under contract (combined contingent & pending) outnumbered our active listings. It's been that way ever since, and as of this week, we now have twice as many listings under contract than we have active listings.
Chew on that for a second. I'll wait.
OK, a couple of other numbers of note in here: 57 active listings? Are you kidding me? It's getting to be like the limbo - "How low can you go, mon?" And for the first time in this cycle, we are under 4 months of inventory. And that's counting the contingent listings as active (which is technically true). If I take those out and just look at active listings, it's 1.8 months.
Anybody have a house they'd like to sell? This market needs some inventory.
Active Listings: 57
Contingent Listings: 61
Pending Listings: 65 (35.5% of the inventory)
New listings: 4
Months of inventory: 3.8
Click here for an updated price per square foot chart.
If you've been reading this blog regularly, you might remember about six months or so ago that I made note that the number of listings under contract (combined contingent & pending) outnumbered our active listings. It's been that way ever since, and as of this week, we now have twice as many listings under contract than we have active listings.
Chew on that for a second. I'll wait.
OK, a couple of other numbers of note in here: 57 active listings? Are you kidding me? It's getting to be like the limbo - "How low can you go, mon?" And for the first time in this cycle, we are under 4 months of inventory. And that's counting the contingent listings as active (which is technically true). If I take those out and just look at active listings, it's 1.8 months.
Anybody have a house they'd like to sell? This market needs some inventory.
Sunday, October 25, 2009
Focus On North Vandenberg Village
Here we are on Sunday night, and I haven't gotten to that blog post yet. Hey, as long as I get it done before Monday morning, I'm OK, right? This week we're back to our area updates with an update on activity in North Vandenberg Village.
We currently have 8 active listings in North Village. Given that our inventory is razor thin, this is actually a little surprising. More surprising - 6 of these are traditional sellers, with one each short sale and REO. I don't know what to make of that... We also have 2 contingent listings up there, both short sales.
There are 5 pending listings here at the moment. And much like the active inventory, it's dominated by traditional sellers with 4 of those, and one REO.
Sales have been a little slow in the area with only 4 over the past three months. In contrast to the numbers above, three of these were distressed sales - one short sale and two REO's. There aren't really enough sales here to form an opinion on price trends, but I'm hoping that by the next time I come back to this area for a post, there will be some more data to work with.
See you back here in, oh, about 12 hours for the Monday thing.
We currently have 8 active listings in North Village. Given that our inventory is razor thin, this is actually a little surprising. More surprising - 6 of these are traditional sellers, with one each short sale and REO. I don't know what to make of that... We also have 2 contingent listings up there, both short sales.
There are 5 pending listings here at the moment. And much like the active inventory, it's dominated by traditional sellers with 4 of those, and one REO.
Sales have been a little slow in the area with only 4 over the past three months. In contrast to the numbers above, three of these were distressed sales - one short sale and two REO's. There aren't really enough sales here to form an opinion on price trends, but I'm hoping that by the next time I come back to this area for a post, there will be some more data to work with.
See you back here in, oh, about 12 hours for the Monday thing.
Monday, October 19, 2009
Monday Morning Numbers 10/19/09
Good morning once again, and welcome to yet another scintillating edition of Monday Morning Numbers! Seriously, you just can't get this kind of excitement anywhere else, short of getting glued to your television to watch a helium balloon float through the sky for an entire afternoon. I'm really happy that I hardly ever turn on the TV during the day. Let's look in on what our numbers for the week:
Active Listings: 64
Contingent Listings: 63
Pending Listings: 63 (33.2% of the inventory)
New listings: 9
Months of inventory: 4.0
Click here for an updated price per square foot chart.
Inventory continues to slide. I was just astounded a couple of weeks ago when we dropped below 70 active units, and I figured it was just a blip that would correct. It still might be that, but we actually dropped still lower this week. Now I'm wondering if we'll go into the 50's or even lower.
Come back later this week for an update on what's been happening in North Vandenberg Village.
Active Listings: 64
Contingent Listings: 63
Pending Listings: 63 (33.2% of the inventory)
New listings: 9
Months of inventory: 4.0
Click here for an updated price per square foot chart.
Inventory continues to slide. I was just astounded a couple of weeks ago when we dropped below 70 active units, and I figured it was just a blip that would correct. It still might be that, but we actually dropped still lower this week. Now I'm wondering if we'll go into the 50's or even lower.
Come back later this week for an update on what's been happening in North Vandenberg Village.
Thursday, October 15, 2009
2009 Third Quarter Update
Where does the time go? I woke up one day a week or so ago and realized that this year is over 75% gone. Yikes. At least that means that we're getting football now...
What that means for this blog is that it's time for an update on what happened in our market in the third quarter of 2009. Starting with this quarter, I have a little bit of a change in the data source for at least some of the stats that will follow. A few weeks ago I joined a secondary MLS. I had started to see more and more properties over the past several months that were selling outside of the Lompoc Valley Association of Realtors MLS. We were increasingly needing to scour sites like realtor.com for listings for our buyer clients. The vast majority of these homes were listed in the Central Coast Regional MLS (CCRMLS). So in an effort to get better access to listings for our buyers and to better expose our listings to a larger pool of agents, I ponied up and paid for another MLS membership.
CCRMLS is a regional MLS that combines listings from 7 different local associations on the Central Coast. We do see a lot of crossover in Lompoc listings that are in both MLS systems, but I found that this year we've been seeing about 5 sold units a month in Lompoc that are only listed in CCRMLS. The big bulk of these sales are REO properties listed with out of town agents. This is a significant enough number that I need to track these sales as well, at least for quarterly reports. The weekly numbers are going to remain LVAOR MLS only for now - it's just too cumbersome to try to combine these every week. For the purposes of this report, all numbers are combined between these two MLS systems unless otherwise noted.
So with that piece of boring technical business out of the way, let's get to the numbers. We saw a total of 116 sold units in the third quarter of 2009. This is a drop of about 7% from the same quarter in 2008. It looks a little better in terms of volume than it did in the second quarter. Year to date, we're down about 8% in total sales (combined MLS data), but the number of total listings has dropped by about 27% (LVAOR only).
Prices remained remarkably stable as well as you can see from this updated Price Per Square Foot Chart. Note that I went back and updated the previous data with CCRMLS data, so some of the numbers have changed very slightly from the previous charts that I've published. I've said this previously, and I'll say it again here for the record: I think we're at the bottom of this market cycle. And I think that we'll be relatively flat in terms of prices for at least another year.
The mix of our sales remains very heavily tilted toward distressed properties. 65% of the sales in the third quarter were REO's, and 10% were short sales. REO sales continue to account for a much higher percentage of sales than they do of total listings - around 50%. The short sale number here is somewhat surprising to me, down from 17% in the second quarter. It'll be interesting to see if that was a statistical hiccup, or the beginning of a trend.
Looking at how buyers are paying for their purchases, we saw conventional financing make a bit of a comeback in the third quarter, accounting for 32% of the sales. FHA and VA dropped a bit of their market share at 34% and 13% respectively, and cash purchases were very close to the second quarter numbers with 19% of the sales (these are LVAOR only numbers). The cash buyers are probably nearly all investors, and I think that increased investor activity might also account for some of the increase in conventional financing.
As should be expected in a low inventory/high buyer activity market, we continued to see short market times for properties. The median days on market for our sold units dropped a bit to 26 days from 29 in the previous quarter. Escrow periods remained very close to the second quarter with a median of 41 days.
Looking ahead, a lot of what happens over the coming months is going to depend a lot on what happens with REO inventory. If it continues to come on at the current pace, we'll likely see our inventory shrinking. This could nudge our values up a little bit, but the key in any real price appreciation will be affordability. I've said before that prices dropped well below the point where we had buyers back in the market in a big way, and I think that we found affordability in our entry level market 20% ago. Does that mean that our prices will rebound to a 2Q 2008 level anytime soon? Probably not. I still think that at some point we'll see some more REO inventory. But if our inventory shrinks much more and interest rates stay in the 5% range, we might get a bit of a moderate bump. Stay tuned.
What that means for this blog is that it's time for an update on what happened in our market in the third quarter of 2009. Starting with this quarter, I have a little bit of a change in the data source for at least some of the stats that will follow. A few weeks ago I joined a secondary MLS. I had started to see more and more properties over the past several months that were selling outside of the Lompoc Valley Association of Realtors MLS. We were increasingly needing to scour sites like realtor.com for listings for our buyer clients. The vast majority of these homes were listed in the Central Coast Regional MLS (CCRMLS). So in an effort to get better access to listings for our buyers and to better expose our listings to a larger pool of agents, I ponied up and paid for another MLS membership.
CCRMLS is a regional MLS that combines listings from 7 different local associations on the Central Coast. We do see a lot of crossover in Lompoc listings that are in both MLS systems, but I found that this year we've been seeing about 5 sold units a month in Lompoc that are only listed in CCRMLS. The big bulk of these sales are REO properties listed with out of town agents. This is a significant enough number that I need to track these sales as well, at least for quarterly reports. The weekly numbers are going to remain LVAOR MLS only for now - it's just too cumbersome to try to combine these every week. For the purposes of this report, all numbers are combined between these two MLS systems unless otherwise noted.
So with that piece of boring technical business out of the way, let's get to the numbers. We saw a total of 116 sold units in the third quarter of 2009. This is a drop of about 7% from the same quarter in 2008. It looks a little better in terms of volume than it did in the second quarter. Year to date, we're down about 8% in total sales (combined MLS data), but the number of total listings has dropped by about 27% (LVAOR only).
Prices remained remarkably stable as well as you can see from this updated Price Per Square Foot Chart. Note that I went back and updated the previous data with CCRMLS data, so some of the numbers have changed very slightly from the previous charts that I've published. I've said this previously, and I'll say it again here for the record: I think we're at the bottom of this market cycle. And I think that we'll be relatively flat in terms of prices for at least another year.
The mix of our sales remains very heavily tilted toward distressed properties. 65% of the sales in the third quarter were REO's, and 10% were short sales. REO sales continue to account for a much higher percentage of sales than they do of total listings - around 50%. The short sale number here is somewhat surprising to me, down from 17% in the second quarter. It'll be interesting to see if that was a statistical hiccup, or the beginning of a trend.
Looking at how buyers are paying for their purchases, we saw conventional financing make a bit of a comeback in the third quarter, accounting for 32% of the sales. FHA and VA dropped a bit of their market share at 34% and 13% respectively, and cash purchases were very close to the second quarter numbers with 19% of the sales (these are LVAOR only numbers). The cash buyers are probably nearly all investors, and I think that increased investor activity might also account for some of the increase in conventional financing.
As should be expected in a low inventory/high buyer activity market, we continued to see short market times for properties. The median days on market for our sold units dropped a bit to 26 days from 29 in the previous quarter. Escrow periods remained very close to the second quarter with a median of 41 days.
Looking ahead, a lot of what happens over the coming months is going to depend a lot on what happens with REO inventory. If it continues to come on at the current pace, we'll likely see our inventory shrinking. This could nudge our values up a little bit, but the key in any real price appreciation will be affordability. I've said before that prices dropped well below the point where we had buyers back in the market in a big way, and I think that we found affordability in our entry level market 20% ago. Does that mean that our prices will rebound to a 2Q 2008 level anytime soon? Probably not. I still think that at some point we'll see some more REO inventory. But if our inventory shrinks much more and interest rates stay in the 5% range, we might get a bit of a moderate bump. Stay tuned.
Monday, October 12, 2009
Monday Morning Numbers 10/12/09
Good morning, happy Columbus Day to the handful of you who actually get the day off... Really, outside of government workers and students, does anyone even know it's a holiday? I'm back from the C.A.R. meetings, and I'm not going back to another one until February. They're interesting meetings, and I kind of like them for the first day or two, but then I just want to come home. But I'm there for the duration. Anyway, let's look at this week's vitals for our market:
Active Listings: 69
Contingent Listings: 60
Pending Listings: 58 (31.0% of the inventory)
New listings: 12
Months of inventory: 4.1
Click here for an updated price per square foot chart.
We have a few more pending units and a few more new listings this week, but aside from that, there isn't a lot of change from last week's numbers. We're coming into a period where sales traditionally slow down, so if some of that minor amount of REO backlog starts to come on the market, we might start to see a bit of an increase in our inventory levels in the next couple of months.
Later this week I have a third quarter update on tap. Should be interesting - I can't wait to see what I have to say. Seriously, sometimes I just don't know what's going to come out of my mouth (or keyboard).
Active Listings: 69
Contingent Listings: 60
Pending Listings: 58 (31.0% of the inventory)
New listings: 12
Months of inventory: 4.1
Click here for an updated price per square foot chart.
We have a few more pending units and a few more new listings this week, but aside from that, there isn't a lot of change from last week's numbers. We're coming into a period where sales traditionally slow down, so if some of that minor amount of REO backlog starts to come on the market, we might start to see a bit of an increase in our inventory levels in the next couple of months.
Later this week I have a third quarter update on tap. Should be interesting - I can't wait to see what I have to say. Seriously, sometimes I just don't know what's going to come out of my mouth (or keyboard).
Monday, October 5, 2009
Monday Morning Numbers 10/5/09
Here we are again. Another Monday morning, another update on market numbers for the Lompoc Valley:
Active Listings: 69
Contingent Listings: 62
Pending Listings: 53 (28.8% of the inventory)
New listings: 5
Months of inventory: 4.0
Click here for an updated price per square foot chart.
Our inventory level continues to drop sharply this week. Even a few months ago when we started to see this trend, I would never have guessed that we'd be below 70 active units. If things continue at this rate, we might see the number of contingent listings outpace active listings. That's just nuts. It doesn't help that we've had a couple of straight weeks of anemic numbers for new listings, and we're starting to eat through some of that unlisted REO inventory now. We're down to about 45 REO properties that haven't yet hit the market, and we've not been seeing many go back to the bank in recent weeks. We may be looking at this type of inventory level for a few months.
I'm not sure if I'll have a "Focus On" post later this week. I'm doing the C.A.R. meeting thing again up in San Jose this week. What that typically means is that we'll get three or four fires on the business front that need to be put out, and Diane will be scrambling to keep everything together while I'm sitting in meetings. I was lucky to find her long before I got into this business, and now I'm doubly lucky to have her.
And if I say nice things about her on here, maybe she won't change the locks while I'm gone...
Active Listings: 69
Contingent Listings: 62
Pending Listings: 53 (28.8% of the inventory)
New listings: 5
Months of inventory: 4.0
Click here for an updated price per square foot chart.
Our inventory level continues to drop sharply this week. Even a few months ago when we started to see this trend, I would never have guessed that we'd be below 70 active units. If things continue at this rate, we might see the number of contingent listings outpace active listings. That's just nuts. It doesn't help that we've had a couple of straight weeks of anemic numbers for new listings, and we're starting to eat through some of that unlisted REO inventory now. We're down to about 45 REO properties that haven't yet hit the market, and we've not been seeing many go back to the bank in recent weeks. We may be looking at this type of inventory level for a few months.
I'm not sure if I'll have a "Focus On" post later this week. I'm doing the C.A.R. meeting thing again up in San Jose this week. What that typically means is that we'll get three or four fires on the business front that need to be put out, and Diane will be scrambling to keep everything together while I'm sitting in meetings. I was lucky to find her long before I got into this business, and now I'm doubly lucky to have her.
And if I say nice things about her on here, maybe she won't change the locks while I'm gone...
Thursday, October 1, 2009
Focus on Condos
I've been writing a lot here lately about how our market is stabilizing, and that we might be seeing the beginnings of some small amount of price appreciation in some segments. Condos are a real mixed bag here. We have a couple of complexes that have been holding up pretty well, but some of our larger ones are struggling, for reasons that I'll lay out shortly. On the whole, it looks like our condos sold for around 5% less in the third quarter this year than in did in the second quarter. If you read my last condo post in June, you might remember that I noted that it looked like we'd actually seen the price per square foot of condos jump about 20% from the previous quarter. I said at the time that it was a very small sample size, and it still is. That number is going to fluctuate too much to read much real meaning into it when we're looking at numbers this small.
Let's take a look at the current condo numbers: We have 12 active units on the market today. Of those, 2 are REO's, 7 are short sales, and three are traditional sellers. We also have 12 contingent units, 3 of which are REO's, 8 short sales, and one traditional seller.
We had some pretty good condo sales activity in the last quarter with 17 sales. 11 of those were REO's, with only one short sale, and 5 traditional sellers in the mix. In a market that saw a bit of a drop in overall sales from the same period last year, we actually had a modest increase from the 14 condo sales in 3Q 2008.
As I mentioned above, we have a couple of our larger complexes that are suffering a bit for price. Lompoc Village and Cypress Woods in particular are not holding their value very well at this point. Both of those complexes, along with a few smaller ones around town, are getting to be more and more difficult to buy with financing. Lending guidelines have tightened across the board, but this is especially true with condos. When we started to see the effects of the foreclosure market, a lot of these associations started to have problems with delinquent dues. Underwriters want to know that they are writing loans on properties that will likely be maintained, and when a significant number of owners aren't paying their HOA dues, it gives them pause.
Another reason that condos are getting to be tougher loan candidates is that some complexes have become too investor heavy. There are some tightening loan guidelines out there on owner occupancy ratios, and we're starting to see some of these complexes become nearly impossible to qualify for financing. As a result, we've begun to see an increasing percentage of cash purchases for these units. 7 of the 17 units sold in the last quarter were cash transactions. Cash usually means investor, meaning that at least in the medium term, the ratios aren't likely to get any better.
There's another factor that I think is likely to retard any immediate price appreciation for most condos. One of the truisms in our business is that buyers don't live in the price, they live in the payment. Houses have become so affordable that most of our first time buyers have started to opt for those instead of condos. Think about it this way - most of our larger, nicer condos are probably in the $180K range right now. But they have HOA dues that are usually in the $200-250 range per month. So when you tack that onto the monthly mortgage, you're looking at a payment that would get you into a $200-210K house. That's a pretty decent house these days, so there's a smaller market for condos.
Because of the affordability of houses and the financing issues, I expect the condo market to lag significantly when we do start to see prices move back up. That's not to say that they aren't still a good value. If you're looking to own but don't want all the maintenance that comes with a house, or if you're looking for a good cash investment but you're limited to the $100K range for that investment budget, condos are still a good option. And even though they'll come back more slowly than the rest of the market, rest assured, they will come back.
Let's take a look at the current condo numbers: We have 12 active units on the market today. Of those, 2 are REO's, 7 are short sales, and three are traditional sellers. We also have 12 contingent units, 3 of which are REO's, 8 short sales, and one traditional seller.
We had some pretty good condo sales activity in the last quarter with 17 sales. 11 of those were REO's, with only one short sale, and 5 traditional sellers in the mix. In a market that saw a bit of a drop in overall sales from the same period last year, we actually had a modest increase from the 14 condo sales in 3Q 2008.
As I mentioned above, we have a couple of our larger complexes that are suffering a bit for price. Lompoc Village and Cypress Woods in particular are not holding their value very well at this point. Both of those complexes, along with a few smaller ones around town, are getting to be more and more difficult to buy with financing. Lending guidelines have tightened across the board, but this is especially true with condos. When we started to see the effects of the foreclosure market, a lot of these associations started to have problems with delinquent dues. Underwriters want to know that they are writing loans on properties that will likely be maintained, and when a significant number of owners aren't paying their HOA dues, it gives them pause.
Another reason that condos are getting to be tougher loan candidates is that some complexes have become too investor heavy. There are some tightening loan guidelines out there on owner occupancy ratios, and we're starting to see some of these complexes become nearly impossible to qualify for financing. As a result, we've begun to see an increasing percentage of cash purchases for these units. 7 of the 17 units sold in the last quarter were cash transactions. Cash usually means investor, meaning that at least in the medium term, the ratios aren't likely to get any better.
There's another factor that I think is likely to retard any immediate price appreciation for most condos. One of the truisms in our business is that buyers don't live in the price, they live in the payment. Houses have become so affordable that most of our first time buyers have started to opt for those instead of condos. Think about it this way - most of our larger, nicer condos are probably in the $180K range right now. But they have HOA dues that are usually in the $200-250 range per month. So when you tack that onto the monthly mortgage, you're looking at a payment that would get you into a $200-210K house. That's a pretty decent house these days, so there's a smaller market for condos.
Because of the affordability of houses and the financing issues, I expect the condo market to lag significantly when we do start to see prices move back up. That's not to say that they aren't still a good value. If you're looking to own but don't want all the maintenance that comes with a house, or if you're looking for a good cash investment but you're limited to the $100K range for that investment budget, condos are still a good option. And even though they'll come back more slowly than the rest of the market, rest assured, they will come back.
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