2010 Second Quarter Update

As I've gotten a little older, I've noticed that the years tend to go by in rapid fire succession, each one shorter than the last. Case in point, I'm still adjusting to writing 2010 on my checks, and we've blown through half the year already.

Cue a schmaltzy Harry Chapin tune...

What that means for us today is that it's time for our second quarter wrap-up extravaganza. As I've done for the past few quarters, the first set of numbers here are combined numbers from the Lompoc Valley and Central Coast Regional MLS's.

We had very robust sales activity in the quarter, with 132 sold units. That is a 48.3% increase over the second quarter of last year, and it was the biggest quarter since the third quarter of 2005. A big part of that activity was probably attributable to the tail end of that first time buyers' tax credit. The average price per square foot ticked up this quarter for the first time in quite a while. It's been almost 5 years since we've had a measurable increase from one quarter to the next. That's encouraging.

Another potentially positive sign is that we had a much lower percentage of distressed property sales for the quarter. 34.8% of our sales were REO's, 23.5% were short sales, and 41.7% were traditional sellers. Some part of that is due to something that I haven't really been reporting on that we've started seeing - the flip is back in vogue. We have a handful of investors around town who are buying, rehabbing, and reselling properties. I'd have to manually go through to figure out how many, but that's one of the sources we've been seeing for non-distressed sales. In any case, I think that the increase in prices and the decrease in REO percentage is not a coincidence.

Now we're moving on to the numbers that come from the LVAOR MLS only:

We had 166 new listings for the quarter, up 21.2% from 2Q 2009. The trend to more traditional sellers continued, with 42.8% of new listings not in distress. 28.9% of our new listings were REO's and 28.3% were short sales.

Government loans continue to dominate our financing, with 44% of transactions being funded with an FHA loan, 17.4% VA loans, 17.4% conventional, and 20.2% cash. That cash number is down a bit from the last quarter, but it's still pretty astounding.

Things haven't changed much with the time it takes to get a property sold. The median days on market for our sold units was 21, and the median escrow period was 43 days. Both of those are very close to the numbers of the past couple of quarters.

We are still very much in a competitive market for buyers, with multiple offers driving prices up in many cases. 60% of our sales closed at or above the list price, down a little bit from last quarter but still a very telling number.

Looking forward, I'd be surprised if the transaction volume that we saw last quarter holds for much longer. Our pending sales have been dropping somewhat over the past couple of months, and the tax credit is a thing of the past. On the other side of the coin, interest rates are still beyond incredible and prices are still very much in the affordable range for a lot of buyers, so I don't see activity dropping hard. I don't know if the price appreciation that we saw this quarter will continue. That's going to depend on a lot of factors, not the least of which is the local employment picture. I wouldn't be surprised to see a period of a year or two where we see some minor amount of up and down on that price chart. Time will tell.