Monday Morning Numbers 12/27/10

I hope everybody had a great Christmas. We had a very nice little low-key celebration ourselves, which is just the way we like it. One last time for 2010 - let's take a look at our market stats:

Active Listings: 122

Contingent Listings: 36

Pending Listings: 37 (19.0% of the inventory)

New listings: 6

Months of inventory: 5.9
Click here for the updated price per square foot chart.

No big changes again this week to report. It seems like I say that a lot, but when you look at it you can see that things have changed considerably since the beginning of this year. We have about 50% more inventory - both in raw numbers and months - than we had at the beginning of the year. We've gone from being a very low inventory seller favoring market to a more balanced level. How will things look a year from now? Hey, you'll just have to wait to find out.

I still have to come up with something to write about for later this week, but I'm sure I'll come up with something. And then I'll see you back here next week for a look at the first market stats for 2011.

Focus On Newer Construction

This week we're taking a fresh look at what's happening with newer construction homes in the Lompoc Valley. As a refresher - what I mean by "newer construction" is resale homes (not sold by the builder) built since 2004.

As I've said a few times here, this is a segment that has been hammered hard with distressed properties. When you think about it, you'll understand why - the big bulk of these are homes that sold at or near the peak of our market, and a lot of them were sold with some pretty risky financing. That's a perfect recipe for distressed properties.

We have a moderate inventory of these homes on the market this morning, with 15 active listings. No surprise, distressed sales dominate these with 4 REO's, 10 short sales, and only 1 non-distressed listing currently on the market.

Sales activity has increased a little bit since I last reported on this segment back in July. We currently have 3 contingent sales (2 REO/1 SS) and 3 pending sales (0 REO/1 SS/2 trad). We've had 8 sold units over the past 3 months (2 REO/5 SS/1 trad). I've been expecting to see the mix of REO's and short sales shift to more short sales. This is probably the hardest hit segment in our market, so it's possible that this is a bellwether of things to come. Or it could just be a fluke of a small data set.

The signals are mixed on what we're seeing as far as a price trend on these. It appears from what I've been seeing that this has been the softest segment price-wise in our market. The median sale price on these units has dropped significantly in recent months, but the average price per square foot has been pretty stable. A combination of these being heavy in distressed sales and at a price point that isn't in our "sweet spot" seems to be a drag on values right now for these units.

Hope you all have a very Merry Christmas! See you back here next week. I'm sure I'll come up with something to share with you by then.

Monday Morning Numbers 12/20/10

OK, here's the deal - if anybody wants my attention today, they need to get me before about 5:30 tonight. Because right about then, I'm sitting down in front of my TV with some 2° Below Ale to watch the Bears play for a chance to clinch their division against the hated Vikings. Seriously - you can call if you want, I'll just let my phone ring. I'm OK with that, because my ring tone right now is "Bear Down, Chicago Bears".

Wait a minute, what does this have to do with Lompoc Real Estate? Not much, I guess, unless I can convince Brian Urlacher to invest in a few properties here. Let's take a look at our market stats this morning:

Active Listings: 123

Contingent Listings: 39

Pending Listings: 38 (19.0% of the inventory)

New listings: 6

Months of inventory: 6.2
Click here for the updated price per square foot chart.

We had a pretty significant decline in our pending listings this week, mostly due to a big week for reported sales with 12. About half of those sales happened a few weeks ago and got reported this week (I say as I shake my fist at my fellow agents who don't report changes in a timely manner). That dropped our months of inventory down a bit, but it also put us at our lowest point for pending sales as a percentage of inventory since March 2009.

Later this week I'll take a look at resale activity on newer construction homes in our market. Until then, Bear Down!

Focus On Short Sales

You know, there's just nothing to get you into the Christmas spirit better than talking about short sales. Assuming that you are the Grinch or Ebeneezer Scrooge... But here we are anyway. Never let it be said that Dennis Trimble let a holiday get in the way of a perfectly good funk.

I've been saying for several months now that I expect that we'll see short sales increasing their share of our market. So far that change has been slower coming than I expected. I still think we're going to see a change, and I'm a little bit perplexed about why we aren't seeing more of these than we are right now. Where are we right now? Let's go to the scoreboard:

Short sales account for 34.6% of our active listings, 89.5% of our contingent listings, 15.8% of our pending sales, and 25% of our sales for the past three months. All of those numbers except for the pending sales is up noticeably since I last reported on this segment in August. But with that pending percentage down, it probably portends a lower level of these as a percentage of sales a couple of months from now.

Success rates have been pretty stable. We remain at a 47% success rate for short sales, which is unchanged from August. I'm not sure if that will improve, or if we've reached a point where things have peaked in that regard. Some of it will have to do with simple supply and demand. If there are enough available non-short sale listings out there, buyers will most likely go to those first. If that inventory dries up, however, buyers will pretty much have to be looking seriously at these. I do think there is still some progress to be made in our industry, both by agents and lenders. There has been some slow progress made so far, and things have improved incrementally, but we still have some work to do.

We still have an enormous negative equity problem in our market, and that's not going away for a long time. We could see a big spike in employment and incomes locally, which would help drive prices up. But don't hold your breath - the most likely way out of this hole is via short sales. It seems to me an inevitability that we're going to start seeing more short sales sooner or later. I guess it might be coming later than I originally thought.

Monday Morning Numbers 12/13/10

Good morning again, boys & girls! Time for another look at some market numbers for the Lompoc Valley:

Active Listings: 124

Contingent Listings: 40

Pending Listings: 44 (21.2% of the inventory)

New listings: 13

Months of inventory: 6.9
Click here for the updated price per square foot chart.

We had a pretty active week of new listings considering that we are heading into the holidays. Inventory ticked up a little this week in both terms of raw numbers and months of inventory, but everything else remains fairly stable. 9 of the 13 new listings are distressed sales this week, with 6 of them being short sales.

Hey, speaking of short sales - I'll be updating you on that segment of the market later this week.

Focus On South Vandenberg Village

This week I'm actually getting around to my mid-week blog post in the middle of the week. What a concept!

We're back around to a look at South Vandenberg Village this time around. For a little background on the area and a description of the homes covered here, check out my first post on the area from early 2009.

For the past couple of years, this has been one of our lower activity areas, and it still is. We have a few more listings up there than we did a year or so ago, but that doesn't mean much. There are 6 active listings here - 2 REO's, 3 short sales, and 1 non-distressed sale.

If you've had a dearth of inventory recently, chances are pretty good that you haven't had many sales either. (Hey, try to find this kind of insight anywhere else!) We only have one contingent short sale and one pending non-distressed property this afternoon. And over the past 3 months, we've seen 2 sold units, both REO's.

As I've said here before, when we have this low level of activity, it really makes it hard to pinpoint a price trend. I can tell you that both of those sold units from the past 3 months needed quite a bit of work, so that would at least on the surface make it look like values have declined a bit.

Next week I'll have an update on short sale activity. Just in time for the holidays!

Monday Morning Numbers 12/6/10

It's December already? Really?

Let's look at some numbers:

Active Listings: 119

Contingent Listings: 42

Pending Listings: 40 (19.9% of the inventory)

New listings: 7

Months of inventory: 6.7
Click here for the updated price per square foot chart.

That little spike of pending listings that we had a couple of months ago seems to have settled back down in recent weeks. For some reason, it never quite panned out to an increase in sold units - quite to the contrary, they've been declining over the past few weeks. I'm not sure what's going on there. If I can find the time, I might try to analyze what happened there.

Later this week I'll have a South Vandenberg Village update.

Focus On Interest Rates

Hey, I'm finally getting around to doing that interest rate post! I had taken a look at this earlier this year, and much to my surprise, rates got even better since then. It's just unreal - take a look at this chart.

Back in February when I last posted about this, rates were in the 5% range. From an historic perspective, that's an unbelievably low rate. Since then, a number of things have happened on a macroeconomic level - most of which are way above my level of understanding - and rates fell into the low 4's. It seems in recent weeks that we've started to see a little bit of movement upward. We were looking at 4-4.125% for a little while there, but now we're bouncing around the 4.375% level on FHA/VA loans.

I've been talking to a lot of folks who bought in the last couple of years, and some of them are either thinking about or have done a refinance on their homes to get a better rate. There's a whole calculation to whether or not it's worth doing. Some of it depends on how long you plan on staying in that loan, and some of it depends on your equity position. But you could save a nice little chunk of change every month. On a $200,000 loan, a 1% difference is $2000 per year, or around $167 per month. That's a big difference in a lot of people's household budget.

I'm actually a little surprised that we don't have more first time buyer activity in our market than we do right now. Sure, the tax credits expired. So what? Everything is on sale, and money is cheaper than it's ever been in my lifetime. I seriously doubt that those tax credits are coming back any time soon. And interest rates in the low 4's - are people seriously going to let that slip away? I think that 10 years from now, a lot of the discussions that people will be having about real estate will center on one of these two points: "I'm really glad that I bought a house ten years ago" or "I really wish I'd bought a house ten years ago".

I know there are a lot of people who have been hammered by this economy and simply can't do anything right now. But there are also a lot of folks who can do something now, but are afraid. I get that, I really do. I bought my first home in 1992. For those of you who don't remember that time frame, we were in a recession, unemployment was high and getting higher (does that sound familiar?). How bad was that economy? We elected Bill Clinton over a sitting incumbent despite a sex scandal during the primaries. Let that soak in for a minute... We had just had a pretty brutal round of layoffs at my place of employment. Was I scared? Hell yes! But I acted anyway, and to this day I'm glad I did. A wise man once said in a song lyric "We can live in fear or act out of hope" (John Hiatt, one of my favorites). I would encourage you to act out of hope.