Monday Morning Numbers 5/30/11

Good morning again. Every year on Memorial Day I have to say something about this - I think that we as a nation seem to have lost perspective on this holiday. We've turned it into some big "start of summer" three day weekend where we can get together with friends and have a few beers and grill up some steaks, or go out to the mall to take advantage of the great deals on their holiday weekend sales. And I have a problem with that. Not so much with enjoying the time off work, but with losing sight of what this holiday is actually commemorating. Over the years we've asked a lot of our military, and they've always answered the call. By all means, have a few beers and fire up the BBQ, but also take some time today to think about the young men and women that have made the ultimate sacrifice for our nation.

OK, let's look at some numbers:

Active Listings: 139

Contingent Listings: 39

Pending Listings: 57 (24.3% of the inventory)

New listings: 11

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

Inventory is down slightly from last week, and we're below the 6 month level for the first time since the beginning of this year. Aside from that, there's not much of note in the numbers this week. I still haven't figured out what I'm going to cover later this week, but when the muse comes to me I'll bang something out.

Focus on Mission Hills

This week the wheel turns again and lands on Mission Hills. For a little background on the area and a description of the homes here, you can take a look at my first post on it from way back in March 2009.

For a while there, Mission Hills was much like South Vandenberg Village in that there was almost no inventory and very little activity. Things have picked up a little bit, but it's still a pretty low activity area. We have 6 active listings up there this afternoon, with 3 REO's, 2 short sales and one non-distressed listing.

Sales activity has been stable and pretty much in line with the inventory. We have 2 contingent sales in the area (1 REO/1 SS) and only one pending sale, a non-distressed property. We've seen 6 sales over the past 3 months (2 REO/3 SS/1 ND). A look at those sales shows that for an area that has a pretty homogeneous house inventory, there is a very broad range of values. We had a couple of fairly nice units selling at or near the $200,000 level, and a couple of rougher ones selling in the $100-130K range. These are pretty much the same levels that we've seen up there for the past year or so.

Come on back next week and I'll come up with something new to say. Or maybe I'll just say the same old $#@&. You'll just have to check in to find out.

Focus on Foreclosure Activity

Since I didn't quite get to this last week, I'm going to try to double up this week on posts if I can find time. It's been a little while since I updated you on what's going on with foreclosure activity in our market, and since its such a key driver of this market, I probably should just do this once a month.

We've seen some fairly stable activity in foreclosures for the past several months by most of the metrics that I use. If you'll take a look at this chart, you'll see that we bounce around a little bit in most of these measures, but there's no real identifiable trend line. We've seen a bit of a drop in the number of new Notice of Trustee's Sale (NTS) filings, but Notice of Default (NOD) filings have been up a bit in recent months. If you look at it, you'll see that you can usually see that NTS trends follow NOD trends by a few months, so it wouldn't be a big shock if we saw an increase in NTS filings in the months ahead. In fact, we might be starting to see that already. I look at the notices in the paper and it looks to me like we're seeing more new filings so far this month.

The red line on that chart shows how many total unresolved sales we have at the end of each month. That dropped off pretty sharply over the past couple of months, but if we are seeing an increase in NTS filings, that should start to edge back up again.

We have about 65 unlisted properties that have gone back to the bank now, which is pretty much in line with what we've seen for the past couple of years. That's at a point where - for reasons unclear to me - we usually get a little bit of a run of REO listings. We'll see if that holds this time.

A preliminary look at the sales for the second quarter (mind you, we're about halfway through that) we appear to be seeing a lower level of REO's as a percentage of sales - around 35% vs. a little over half for the first quarter. That's probably going to be a good sign for prices in the quarter, but that could also shift between now and the end of the quarter if we do get an influx of REO listings.

When I look into my slightly cracked crystal ball, I really don't see any reason to expect any big change one way or the other with the level of foreclosure activity that we have now. Our employment picture locally is in what feels like some kind of permafunk, and we still have about 40% of the properties in our market in a negative equity situation. Short sales seem to be slow in making inroads and have been pretty stagnant in terms of success rates. So until some of these other factors improve, we're going to see foreclosures at about the same rate we're seeing now. Wish I had better news for you.

Monday Morning Numbers 5/23/11

Well, it looks like Saturday came and went, and no apocalypse. Good that I didn't liquidate everything I own and head off to a beach in Jamaica for the last few weeks of the year, which was the first thought I had when I heard that prediction. On the other hand, sometimes that sounds good even when the end isn't purported to be imminent. Let's take a look at this week's market stats:

Active Listings: 143

Contingent Listings: 35

Pending Listings: 59 (24.9% of the inventory)

New listings: 9

Months of inventory: 6.4
Click here for the updated price per square foot chart.

Most weeks lately I've been remarking that there were no big changes from the past week in these numbers. But this week is kind of ridiculous - there were very small changes to three of those numbers from last week. It would appear that we've hit another plateau for the time being in our market activity.

I got bus last week and didn't get to that foreclosure activity update, so I'm going to try to crank that out this afternoon if I can and work in a post later in the week on Mission Hills activity.

Monday Morning Numbers 5/16/11

I've been doing a bunch of yard project stuff over the past few weeks, and boy is my back screaming at me this morning. Getting old sucks. So let's do something that requires just a little less physical strain. Let's run some market numbers:

Active Listings: 142

Contingent Listings: 35

Pending Listings: 59 (25.0% of the inventory)

New listings: 9

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

Inventory is down slightly this week, and pending sales are up slightly. Aside from that, there really isn't anything noteworthy in these numbers this week. We might be trending very slowly to a lower inventory, higher activity market but it's too early to say for sure.

Later this week I'll have an update on foreclosure activity in our market.

Focus on South Vandenberg Village

This week we're taking a look at the market for houses in South Vandenberg Village. As a reminder, when I cover this neighborhood I'm not including condos or the newer homes in Providence Landing. I cover those separately. For a little background on the area, go back to my first post on the area from 2009.

For what seems like a very long time, I had almost nothing in this area to report. We had very little activity of any nature here for over a year. I'm not sure why that was, but there weren't a lot of listings here, which of course means not many sales. It appears that might be changing, and we have a little bit more activity there now.

We have 7 active listings on the market up there this morning. Only one of them is an REO, and there are 3 each short sales and non-distressed listings. That's still not a ton of inventory, but last year there were times when I reported on this area and only had one or two listings.

Sales activity has been pretty much what we would expect for the level of inventory based on our market norms. We have 2 contingent sales in the area (1 REO/1 SS) and 3 pending sales (2 SS/1 non-distressed). Over the past three months, we've had 4 sales in the area (3 REO/1 non-distressed). There really aren't enough data points here to identify a price trend, but since 3 of the four sales were REO's I would expect that the trend has been somewhat down.

Next week I'll update foreclosure activity in our market.

Monday Morning Numbers 5/9/11

Good morning again. I spent most of last week up in Sacramento at the California Association of REALTORS® spring meetings. I gotta tell you, we're getting to be a pretty frustrated bunch of people about short sales. If you read my little rant about them a couple of months ago, you might have some insight into why. So rather than go back into that again this morning, I'm just going to get into some numbers:

Active Listings: 147

Contingent Listings: 35

Pending Listings: 55 (23.3% of the inventory)

New listings: 13

Months of inventory: 6.5
Click here for the updated price per square foot chart.

We had a little more normal number for new listings this week, and as a result our raw number of active listings moved up a little. But we saw a very small decrease in our months of inventory because we had a little bit of an increase in reported closings last week. But for the most part, there's not a lot of change from last week.

Later this week I'll get you that update on South Vandenberg Village.

Monday Morning Numbers 5/2/11

Seen the news yet this morning? If you haven't, stop reading this and go turn it on. You'll be glad you did... Just make sure to come back later. Let's take a look at this morning's market stats:

Active Listings: 142

Contingent Listings: 33

Pending Listings: 55 (23.9% of the inventory)

New listings: 6

Months of inventory: 6.6
Click here for the updated price per square foot chart.

Our inventory is down a little this week, partly because it was a slower than usual week for new listings, and partly because we continued to see a slow increase in pending sales. I'll probably do an REO update in a couple of weeks, but I wanted to share something with you this morning before that. One of the numbers that I track regarding foreclosure activity is the number of unresolved trustee's sales in our area. I look at it at the end of every month, and at the end of April we had 105. That's the lowest that number has been in over two years. If that trend holds, it could be a very positive thing for our market.

I may not have time to get to a mid-week post this week, but if I do it'll be an update on South Vandenberg Village.

Let's do a little negotiating

I've been trying to get to this post all week, and then I took a look at today's Pearls Before Swine strip, and it just seemed all too appropriate. I love Pearls - cynical & twisted humor like that is right up my alley. Anyway...

We live in a unique culture in the world in a lot of ways, and one of the ways that we are unique is that we really don't negotiate all that much, at least where it concerns buying things. We negotiate on houses and cars, and most of the rest of the time we just pay list. In most other cultures, they negotiate nearly everything. It's just ingrained. I'm not sure how we came to be so different. It probably has something to do with living in the Land of Plenty - but if our economy doesn't recover soon maybe that aspect of our culture will change.

The thing about negotiation is that it's much more art than science. There really isn't any one-size-fits-all approach to it. No two scenarios are exactly alike, and a big part of being successful in a negotiation is having a good grasp on the entire scenario. Here are some of the things that I've learned either from experience or from listening to experts that might come in handy with your next negotiation.

It's a zero sum game.

At least where the money is concerned, every thing that you win, your negotiating counterpart loses. And it goes the other way as well. Understand this going in. When you are talking strictly in money terms, there is no such thing as win-win. If you give a dollar, they win a dollar. It's very simple math. However...

It's not always about the money.

One of the mistakes that a lot of people make in a negotiation is to overlook that there are two components to a purchase negotiation - price and terms. I once had a trainer demonstrate this by saying that we could decide which we wanted - price or terms. We'd pick one, he'd pick the other, and he'd come out on top. So one of the students was going to sell him something - I forget what it was, and he said "OK, name whatever price you want". She offered up a million dollars. He said "OK. A dollar a year for a million years and I take delivery today." That's obviously an extreme, but you get the point. It's important to understand that sometimes it's possible to come out better at a lower (or higher) price if the other terms are right.

Know if you are competing.

If you're buying a house and there are other offers on it, you probably don't want to stake out a negotiating position on it. But if it's something that's been around for a while and there aren't any offers, you might take a shot. But one thing to keep in mind - a good listing agent will know who else has been showing the house. And when an offer looks imminent or has come in, we'll usually make a few phone calls to see if we can shake out a competing offer or two. I've seen this movie a few times, and I can tell you that it's not all that unusual for a house to sit on the market for 4-5 months without an offer, only to get three in the space of a week. On the flip side - if you are selling, it behooves you to know what other houses are on the market that could be competition for a buyer. If you have a lot of similar houses competing for buyers, you might want to take a little less of a hard core stance. But if there really isn't much else like your house out there or if you're in a thin inventory market, you might see if you can squeeze the buyer a bit in a negotiation.

Shut up and listen.

This is probably the best simple piece of all-purpose advice that you can get or give on almost any topic. It's much easier to hear what the other side is saying if you aren't in broadcast mode all the time, and you might pick up some valuable information from them that you can use to your advantage. On the other hand, if you insist on running your mouth, you might very well give away something that could compromise your position. A corollary to this rule is...

Never tell anybody your bottom line.

If you're buying or selling a house especially, don't tell anybody how high or low you are willing to go to get the deal done. Nobody. Not your agent, not your co-workers, don't even tell your mother. People can sometimes let something slip inadvertently, and word can get around in a hurry, especially in a small town like this. And if you're on Facebook or Twitter, don't even think about posting anything about your transaction there. I'll tell you this without apology - if I'm on the other side of a deal from you and I learn information that will help my client get a little bit better deal, I'm going to use it with extreme prejudice. Anything you say can and will be held against you in a negotiation.

Know what you want.

This sounds easier than it really is. Sometimes you have to stop and think for a minute - "What is it that I really want or need to accomplish here?". You can't map out a strategy if you don't have a goal in mind.

Walking away is always an option - but you better be sure.

Look, if it's not right, it's not right. Sometimes saying no is the best option that you have. But before you do - make good and sure that "No" is the right answer. Sometimes you can walk away from a deal and it'll all come back together and you'll get a better deal for it. But I've also had buyers walk away from a deal hoping that they can revive it a week or two later after they've let the seller sweat a little, only to see another buyer jump in and get the house that they really wanted. And I wish I had a nickle for every time I saw a seller bounce an offer that would have netted them much more than they wound up getting later.

I hope that you find a few of these tips useful. Botching a negotiation can be very painful and expensive, but doing it well can be extremely rewarding.

Monday Morning Numbers 4/25/11

Good morning again, hope you had a good Easter weekend. We also had the Spring Arts Festival over across the street from us this weekend, and I can't help but wonder if doing that on Easter weekend was good or bad for the turnout. I didn't make the connection that they coincided this year until late last week, and then I was a little surprised that they didn't adjust the festival schedule. Go figure. Let's take a look at this week's numbers:

Active Listings: 150

Contingent Listings: 30

Pending Listings: 52 (22.4% of the inventory)

New listings: 10

Months of inventory: 6.8
Click here for the updated price per square foot chart.

Another week with very similar looking numbers. Nothing new to see here, move along...

Later this week I'll be back with a few tips on negotiation.

Focus on North Vandenberg Village

In case you never noticed - and I'd be shocked if you did - I have a sequence that I use for the areas that I cover in this blog. And way back in the beginning when I started writing this blog, the very first area post was North Vandenberg Village. So we're starting the cycle over again. As I tell you every time I do one of these, if you'd like to go back and get some background on the area, go back and take a look at the first post I did on it back in 2009.

I was just looking at this area for a buyer client recently, and the first thing that popped off the screen at me was the inventory level. We have 16 active listings up there this morning. That's a pretty big number for that neighborhood. The good news is that it's not dominated by distressed sales. None of them are REO listings, and 5 of them are short sales leaving us with 11 traditional sellers. We only have two contingent sales at the moment, both short sales.

Sales activity is relatively low considering the inventory. We only have 3 pending sales in the area right now (1 each REO/SS/Trad). Over the past 3 months we've seen 7 sales, which have been a little heavier in distressed properties (3 REO/1 SS/3 Trad). The 3 REO's that sold were all considerably lower than price than the other sales - and from what I saw of them they were pretty beat up.

The small number of sales here makes it a little more difficult to nail down price trends, but from what I can see, it looks like these non-distressed sales are pretty close in value to what we had been seeing in the previous three months, but the increase in bank owned sales in the area were a drag on prices. It's very similar to what I reported last week about the first quarter of this year - price trends appear to be down at the moment driven by an increase in the percentage of REO sales. If there's encouraging news for North Village, it's that the current inventory isn't heavy in REO's, so when some of those wind up selling down the line, it should help shore things up.

I'm sure that I'll come up with something to write about next week. I'm just not sure yet what that is.

Monday Morning Numbers 4/18/11

Good morning again. It's time again for a look at our Lompoc market stats:

Active Listings: 153

Contingent Listings: 30

Pending Listings: 51 (21.8% of the inventory)

New listings: 10

Months of inventory: 6.6
Click here for the updated price per square foot chart.

In case you missed the first quarter update I did on Saturday, I should warn you - that chart is a little scary this quarter. This week's numbers look an awful lot like last weeks numbers, although the number of new listings is down just a bit. Half of those new listings were REO's this week, and only one new short sale.

Later this week I'll have an update on activity in North Vandenberg Village.

2011 First Quarter Update

Warning: Reading the following post may be detrimental to your health. Especially if you derive any portion of your income from the sale of real estate in the Lompoc Valley.

OK, now that we have that out of the way, let's take a look at the train wreck that was the first quarter of 2011 in the Lompoc Real Estate Market. Seriously, this was not a good quarter for real estate sales by just about any measure that I can pull out of my statistical bag of tricks. So let's not even bother to try to put lipstick on this pig, and call it what it was.

As I've done for the past several quarters, I break out some of these stats out into numbers that are combined from the Lompoc and Central Coast Regional MLS systems, and then later I'll get into some stats that are Lompoc only. Here are some combined stats:

We had a total of 95 sold units in the first quarter of the year. That is down 7.8% from the sales activity of the same quarter in 2010. Distressed sales made a comeback after a few quarters of more traditional sales, with REO's accounting for 49.5% of sales, and short sales up to 23.2% I've been waiting for that short sale percentage to increase, and it looks like it's starting to move that way.

As you might expect, when we have an increase in REO's as a percentage, our prices suffered. Our price per square foot dropped 9.9% from the previous quarter, down to a new low in this cycle of $128. If you really feel brave, you can take a look at this updated chart. Our median price for detached units took even a larger beating, a 19.5% drop to $184,900. Yikes.

I've said this here many times, but I kind of think that it needs saying again: We are working with a very small sample size here, even when looking at an entire quarter. Things can get skewed a lot by what kind of properties sell, and when half of them are REO properties you can get some pretty funky results. And I looked through the list of properties that sold, and I can tell you that there are a lot of pretty rough houses in that mix. So take these number as data points, but not necessarily as the final authority in how things are going. For instance, it would be hard to convince me that any individual house lost almost 10% of its value last quarter (let alone 19.5%).

Now let's move on to the numbers that are only from the Lompoc MLS:

Looking at the way buyers were financing sales during the first quarter, we see that 17.9% were sold with conventional financing, 34.1% were sold with FHA financing, 23.5% were VA loans, and 22.4% were bought with cash. Cash had dropped off a bit last quarter, but given the type of houses that sold and the price levels, it's not surprising to see that number move back up.

If you've been checking on this blog on Mondays to track our market, you'll know that our inventory has been edging up. One thing that goes hand in hand with that is increased market times. We're up to a median of 50 days on market for our sold units last quarter. We're still at 49 days for a median escrow period, the same as last quarter.

So what does all this mean? Are we in a double dip market decline? I really don't know. I do see a few things that give me a little hope that our second quarter will be better. For instance, of the 95 sales that we saw, 41 of them came in March. Our pending sales have been increasing in recent weeks as well, and the median list price for the pending single family house sales is in the 220K range. So maybe last quarter was just a blip. Maybe it was a harbinger of another ride down the slope of declining sales and values. We'll have to wait to see. I'm getting out of the prognostication business. I don't have a freakin' clue what's going to happen anymore.

Monday Morning Numbers 4/11/11

Good morning once again, and thanks for checking in. Here we go with another round of weekly market stats to go with your morning coffee:

Active Listings: 152

Contingent Listings: 31

Pending Listings: 50 (21.5% of the inventory)

New listings: 16

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

Most of these numbers look pretty close to last week's set, but we continue to see an edge up in our pending sales. That's a good sign. We might be seeing some return to a more traditional seasonal cycle in our sales. We'll see - the past few years have been out of whack with the REO market driving things.

Later this week I'll have a first quarter wrap-up for you. You might want to check it out in the evening with a stiff drink. Maybe I'll write it in the evening with a stiff drink... It wasn't a pretty quarter for our market.

Inside the Life of a REALTOR® - Sales

Remember a few years ago when they had that special on some channel with a magician who was going to reveal the secrets of the profession? I guess they made some big show of hiding his identity to make sure that his colleagues didn't hunt him down and, oh I don't know, saw him in half or something. I didn't watch it, but I remember a little bit of talk about it.

I'm pretty sure that I'm not going to get sawed in half over this post, so I'm not going to put on the hood of secrecy or whatever it was they did for that guy. But I'm going to tell you a couple of things about the "dark arts" of my profession that maybe you didn't know before. Or maybe you did...

First of all, I'm in sales. Duh - big shocker there, right? But something I bet you didn't know - you probably are too. Even if "sales" isn't part of your written job description, you're probably in sales more than you know. Because when you strip it down to its essence, sales is getting people to do something. In the traditional sense of the word, we use it to mean getting somebody to buy something. But I've come to observe over a period of time that sales encompasses a lot more than that. Teachers, cops, doctors, you name the job - there's probably some level of convincing people to act in a certain way. Parents? Check. Attorneys? Oh, hell yes. Politicians? Please...

Sales in my profession might be a little different than you think. For instance, what do figure that I sell? Houses? Think again. I had a mentor a handful of years ago who observed that in all of her years in real estate, she probably never sold a single house. Never mind the fact that she'd probably worked on tons of transactions. The truth of the matter is, houses sell themselves. I can get clients matched up with houses pretty well, but at the end of the day I can't convince someone to buy a house that they don't want. What I'm really selling a client is me. I sell them my time, my energy, and my expertise. I'm selling them on the notion that they should want to have me working on their behalf in the middle of a real estate transaction.

That sales skill set - selling yourself - is a difficult skill to master. There are many in our profession that do it a lot better than I ever will. The people who do this the best are the ones who get the lion's share of the business. What you, the consumer, need to understand about this is that the skill set of being able to sell yourself is entirely separate from the skill set that is required to watch out for the best interests of a client through a real estate negotiation and transaction. Those aren't mutually exclusive skills, and I know several of my colleagues who do very well with both aspects. But sadly, I also know several who have one but lack the other.

Real estate agents who are good at looking out for their clients but lack the skills required to sell themselves don't last long. They lose business to their competitors that do a better job of convincing the client to work with them. This business is brutal - absolutely merciless - to people who lack the ability to sell themselves.

On the other hand, agents who are good at selling themselves can thrive even if they lack the skills or inclination to look out for the best interests of their clients. They know all the right things to say to get their clients to act, whether or not it's a good move for them. (I could write a whole article on sales scripts, and maybe I will someday.) It's an unfortunate reality, and some of those agents are very successful and have been for years.

So what do you do? Well, my advice is that when you are looking for the services of a real estate agent, talk to people you trust to get a referral to someone that they would use. The best agents - the ones you want to use - will be the ones who get rave reviews from their past clients. If you ask a friend or family member who they used for their transaction last year and the answer is "Oh, it was some guy over at XYZ Realty - dang, what was his name again?" - keep looking. If you get a response something like "Oh, that was a horrible experience! Never again!" get that name too. Chances are really good that they'll remember. The agent you want to use will be somebody who has stayed in contact with their clients after the transaction was over. The other ones - the ones who just railroad clients through a deal regardless of anything else are too busy to stay in contact. They've moved on to the next thing.

Next week I'll wrap up the first quarter activity in our market. I haven't pulled all of the numbers yet, but it may not be pretty...

Hey, this isn't www.lompocliving.com!

Well, it is for now. We're in a transitional phase with our website, so for the time being we've forwarded our website address here. You were just going there for the blog anyway, right?

Monday Morning Numbers 4/4/11

Geez Louise, it's April already. Yikes. Let's take a look at this week's market stats:

Active Listings: 147

Contingent Listings: 35

Pending Listings: 43 (19.1% of the inventory)

New listings: 12

Months of inventory: 6.6
Click here for the updated price per square foot chart.

The only significant change that we saw this week was in months of inventory, which dropped sharply from last week. Our raw inventory number only dropped off a little bit, but we had a big week for sold units at the end of the month, which affects that rate number. We'll see if that stays close to where it is or if it climbs back up again in the next few weeks. We also saw a slight bump in our pending sales.

Later this week I'm going to have another look inside the life of a real estate agent. I haven't done one of those in a while. I can't wait to see what I have to say...

Focus on Condos

This week we're taking a look at our condo market. I use "condo" as a general term to indicate a unit that shares a wall with a neighbor. If you want to nitpick about it, a lot of what I'm including here aren't, technically speaking, condos. That's OK, nitpick away. It's my blog and I've got a thick skin... Oh, and I also don't include Country Club "cluster homes". Those are kind of a unique animal, and they'd significantly skew the numbers.

We have a lot of condo inventory available today - 21 active listings. These are heavy in distressed sales, with 8 REO's, 5 short sales, and 8 non-distressed. The 8 non-distressed are kind of interesting, though. Of those, at least 4 are owned by investors who picked them up at a foreclosure sale to flip. So in reality, we could very easily have as many as 12 REO condos on the market if we didn't have the flip investors.

Sales activity has been pretty steady in recent months for these units, despite some challenges with getting financing on them. We have 8 contingent sales, dominated as per usual by short sales (1 REO/7 SS). There are 5 pending sales as well, and these are almost all REO's (4, with one investor flip property as well). We've had 9 sales over the past three months (5 REO, 1 SS, and 3 non-distressed). Again, it appears that all 3 of the non-distressed sales here were investor flips.

Until I took a look at these numbers, I really hadn't picked up on just how heavy our condo market is with investor flips. It kind of makes sense if you think about it. These are typically lower price points than houses, ergo they come with less risk. Mind you, they come with less of a payoff at the end as well, but a lot of these investors aren't trying to hit a home run with every investment property that they pick up.

Values on condos appear to be holding pretty steady over the past few months, with a slightly lower median sale price but a slightly higher average price per square foot. I don't think that any segment of our market fell harder than this one, so it's good to see things settling down. We still have a lot of challenges in the segment, especially financing problems, but we found a price level that seems to work well for this market.

Monday Morning Numbers 3/28/11

Good morning again. Remember last week when I said that my brackets were shot? Well, hey, now everybody's brackets are down the tubes! I was ahead of my time! Let's take a look at this week's market stats:

Active Listings: 153

Contingent Listings: 34

Pending Listings: 40 (17.6% of the inventory)

New listings: 17

Months of inventory: 7.4
Click here for the updated price per square foot chart.

Another big week for new listings has pushed our inventory up again. Of the 17 new listings that hit the market last week 7 of them were bank owned properties, which might be an indication that we're seeing some of the small influx of those listings that I thought we might see a few weeks ago.

I didn't have a late week post last week, as you might have noted. I started to write something, but it turned out to be a half-formed thought that wasn't going anywhere. I usually don't let that stop me, but this was going to turn out to be a pretty pointless ramble, so I killed it off. I'll go back to the rotation of neighborhood/market segment posts and cover condos later this week. Maybe by next week I'll figure out how to say what I was going to say in some intelligible form.

Monday Morning Numbers 3/21/11

I don't know about you, but my brackets are completely shot. I will at least lay claim to having Richmond & Florida St. in the Sweet Sixteen. Of course, I also have to lay claim to having Pittsburgh and Purdue in the Final Four... Oh, to hell with it, let's look at some numbers:

Active Listings: 142

Contingent Listings: 35

Pending Listings: 40 (18.4% of the inventory)

New listings: 11

Months of inventory: 7.3
Click here for the updated price per square foot chart.

For the first time since April 2008 we are above 7 months of inventory. A big part of that is due to slow first quarter sales so far this year, although our raw inventory is up quite a bit from what we've seen for the past couple of years. The silver lining here might be that our pending sales have started to edge up over the past couple of weeks.

I still haven't figured out the topic for later this week. When inspiration strikes me, I'll come up with something and bang it out for you.

Focus on Country Club & Mesa Oaks

This week we're updating activity in our two traditional high end neighborhoods, Mesa Oaks and the Country Club. For a little background on these areas and a description of the homes included, go back and check out my first post on them from a couple of years ago.

It's kind of funny - last time I reported on these areas I noted that it appeared that we had some increasing inventory despite an overall market trend to lower inventory. This time around, we've switched that. Now we have a somewhat decreasing inventory level despite an overall market trend to increasing inventory. As of this afternoon we have 11 active units on the market. Distressed properties aren't a big chunk of that at the moment with no active REO listings (although one did just expire and will probably come back soon) and only 3 short sales, leaving us with 8 traditional sellers on the market.

Sales activity has been a bit better than it was last time I reported on the area. We only have one contingent sale at the moment - an REO. There are 4 pending sales, one of which is an REO and the other 3 traditional sales. We've had 6 sales in the area over the past three months, and this time it looks like we're a little heavier on distressed properties (3 REO/1 SS/2 Trad). Comparing the past three months with the previous three months, it appears that we've been pretty flat in prices, but that's based on a pretty small sample size.

Next week I'm thinking I'll have to get outside the box and come up with something new to write about. I'm just not sure what that's going to be yet. You'll find out when I do, I guess.

Monday Morning Numbers 3/14/11

Good morning once again! Anybody have any tips on filling out brackets this year? Because I looked at them last night, and I could see any number of toss-up games this time. Should be a crazy few weeks. Let's take a look at this week's market stats:

Active Listings: 140

Contingent Listings: 38

Pending Listings: 36 (16.8% of the inventory)

New listings: 14

Months of inventory: 6.8
Click here for the updated price per square foot chart.

Our inventory continued to increase this week on another strong week for new listings. We've had 31 new listings over the past couple of weeks, which is the highest two week total we've seen in quite a while. Of those, 9 were REO listings. On the surface that doesn't sound like a lot, but that's a higher percentage than we've been seeing so far this year.

Later this week I'll cover Mesa Oaks & Country Club activity.

Focus on Foreclosure Activity

Hey, remember a while back when we were hearing about this huge wave of foreclosures that were set to hit? And remember me telling you that I really didn't think it was all that big a thing locally? Well so far, it appears that I'm right. I like it when that happens.

Foreclosure activity has been relatively choppy over the past few months - we'll frequently get a month where one of the indicators is up, then a month where it drops off. On the whole, we've been fairly stable. There are a couple of things that might indicate a bit of an increase in new REO listings coming on the market. Let's start with a chart.

I've published this chart periodically over the past couple of years, so it might look familiar if you've been reading this blog. If you look at that red line that stands out from the rest of it, you'll see that our unresolved trustee's sales have gone back up to around the peak level after dropping off a few months ago. That's one of the key indicators that I look at when I'm trying to forecast what we're going to see in terms of REO listings over the next several months. That trend would indicate a potential increase in foreclosures ahead.

One of the other things that I keep an eye on are properties that have gone back to the bank but have not yet been listed. I kind of wish that I'd started running that number monthly a while back so I could chart it. But I didn't - it's so unlike me to miss an opportunity to chart something - because it's a little bit of a chore to reconcile that list regularly. But I can tell you that if I did chart that number, it would be a pretty flat chart. Since I started looking at it back in March 2009, that number has tracked very steadily between 55-65 units. As of today, we're at 64 units, which is on the high end of the scale. What I've usually seen when it gets to about that level is a small spike in REO listings over a few weeks. So there's another indication that we could see a few more bank owned properties coming in the shorter term.

As of this afternoon, REO listings only account for about 19% of our combined active and contingent listings, and about 40% of our pending listings. Both of those numbers are pretty close to where they've been for a few quarters now. And year to date, only about 23% of all new listings that have come on the market have been REO's. That remains pretty close to where it was when I last looked at these numbers back in September, and down significantly from a couple of years ago.

Even though I'm seeing what looks like some potential for a modest increase in REO listings in the next few months, I still don't see the big wave coming at us. I should caution, however, that we still have a significant equity shortfall in our market, with still around 40% of our homes having more debt than value. But I've said this repeatedly and I'm sticking to it: We're more likely to see a big increase in short sales ahead than REO's.

Monday Morning Numbers 3/7/11

Good morning, Happy Monday, and laissez les bon temps rouler! (Mardi Gras is tomorrow, for those who don't know.) Let's take a look at our market stats for this Fat Monday:

Active Listings: 133

Contingent Listings: 40

Pending Listings: 33 (16.0% of the inventory)

New listings: 17

Months of inventory: 6.6
Click here for the updated price per square foot chart.

A pretty big week for new listings brought our inventory level back up to about the level it had been two weeks ago. It was kind of an odd thing to watch as it developed - for about 2-3 days, we got a big influx of listings, then it stopped for a couple of days. Distressed properties make up the bulk of the new listings with 5 REO's and 7 short sales in the mix.

Speaking of distressed properties, the topic for later this week is foreclosure activity. I'm waiting for some numbers that I typically see around the 10th or 11th of the month, so it might be Friday or Saturday before I post that. Make sure you check back in late in the week.

Focus on North Lompoc

This week we're back around to taking a look at a market area, specifically the north side of the city. For a little background on the area, refer back to my first post on the area from a couple of years ago.

We've been gaining a little bit of inventory in this area in recent months. As of this afternoon, we have 14 active listings - 2 REO's, 6 short sales, and 6 traditional sellers. We also have 8 contingent listings, and as per usual they are dominated by short sales (7 of those and one REO).

Sales activity has slowed considerably since I last reported on the area back in September. We only have 4 pending units in the area (0 REO/1 SS/3 Trad), and we've had 7 sales in the past three months (2 REO/4 SS/1 Trad).

Because sales have dropped off as much as they have, it's a little difficult to nail down a price trend. On a pretty small sample, it would seem that we're seeing a slight decline in prices in the area.

Next week I'll get out an update on foreclosure activity in our market.

Monday Morning Numbers 2/28/11

Been fighting a cold for the past several days. The upside is that I get this real deep, sexy Barry White voice going on in the mornings. "Can't get enough of your love, baby." Yeah, OK, maybe that doesn't work so well for me... Let's stick to what I do - here are this week's numbers:

Active Listings: 124

Contingent Listings: 41

Pending Listings: 36 (17.9% of the inventory)

New listings: 8

Months of inventory: 6.1
Click here for the updated price per square foot chart.

A week ago active listings jumped up a bit and pending listings declined. This week it appears that we've gotten back to about where we had been before for the past several weeks. Our pending listings are still kind of weak as a percentage of the total inventory, so we'll want to keep an eye on that.

Later this week I'll be back with an update on North Lompoc.

Getting Through the Loan Process

If you believe everything you see on TV, you'd think that nobody can qualify for a mortgage anymore. And if you've read this blog for any period of time, you've probably heard me say repeatedly that you shouldn't believe everything that you see on TV. The fact is, people are still qualifying for loans all the time. I guess the key thing here is the word "qualifying". There was a time not that long ago when you really didn't have to do much to qualify for a loan. And of course, we all know how that turned out...

So you wanna buy a house, and you don't have a couple of hundred thousand in the bank. Here are a few ideas on how to best get through the lending process so you can get from Point A to Point B:

#1 - Use a local lender.

No, wait, that didn't come off quite right - let's try that again:

Use a local lender!

Much better. One of the most common mistakes that I see from buyers is their insistence on using an out of town lender. They figure that they'll get a better rate (they won't) or that they'll do their friend/cousin/cousin's friend in Omaha a favor and shoot him some business. Maybe they have an out of town bank or credit union that they've always done business with and feel some sense of loyalty. In any case - you want to blow up your deal? This is a real good way to go about it. Out of town lenders are much less responsive, and they typically aren't clued into the local processes and customs. And when things start to get a little sideways - and trust me, that can be very common - you're going to want either yourself or your agent in close contact with someone who is competent. And not of small import here is the fact that the local lender relies enormously on repeat and referral business, and at least in this part of the world that is reflected in their performance. You think that some internet lender cares much about referral business?

#2 - Know your credit. Do you pull your credit report periodically to scan it for potential red flags and incorrect entries? You should. As qualification requirements have gotten tighter, credit scores have become more and more critical. And there are specific cut-off points for most loans, and even a couple of points one way or another can be the difference between qualifying or not.

#3 - Don't argue with the lender, just provide whatever he/she asks for. Even if you already gave it to them a few weeks ago. Give it to them again. And be ready to do it again in a few weeks. And don't be shocked if they come up with something new to ask for a few times through the process. Like I said, we aren't in the 2004 market anymore, so the lenders are really ratcheting down the qualifications these days.

#4 - Lock up your credit cards after you go into escrow. You should get this advice from your agent and lender as well, but just in case they missed telling you this... You need to know that your credit will get pulled again late in the game, right before the loan funds. And if you've gone out and bought new furniture for the new house on credit during escrow, you might just tip your ratios and/or credit score over into "no loan for you" territory.

#5 - Use a local lender. I know I said that already, but it's important enough to repeat.

None of this stuff is brain surgery. Some might argue that things have tightened up a bit too much over the past few years, but I'll be honest: I'd rather be here than where we were back in the days when all you had to do to get a $500K mortgage was fog a mirror in the presence of a loan officer. This is sustainable. This is healthy. Owning a home is something to be earned. It isn't a birthright.

Monday Morning Numbers 2/21/11

Good morning everyone. We got pulled out of town for most of last week, so I'll have to get you that post on surviving the loan process later this week. Not a pleasure trip, I'll just leave it at that. At least it appears that we missed the nasty weather. Let's take a look at this week's market stats:

Active Listings: 131

Contingent Listings: 37

Pending Listings: 33 (16.4% of the inventory)

New listings: 12

Months of inventory: 6.4
Click here for the updated price per square foot chart.

We had a moderate spike in our inventory and a dip in our pending sales last week. Those were the first noticeable changes that we've seen in several weeks, and coming weeks will tell us if those numbers were temporary blips or the beginning of a trend.

Like I said, come back later this week and I'll get you that post on the lending process.

Monday Morning Numbers 2/14/11

Happy Valentines Day! Hope everybody gets a chance to spend it with someone special. Let's take a look at our numbers for this week:

Active Listings: 122

Contingent Listings: 38

Pending Listings: 41 (20.4% of the inventory)

New listings: 9

Months of inventory: 6.3
Click here for the updated price per square foot chart.

Our months of inventory edged up a little bit this week due to slower sales, but the raw inventory numbers haven't changed much for several weeks now. Come back later this week and I'll talk about some tips to help buyers get through the loan process.

Focus On Central Lompoc

This week we're back into looking at a neighborhood, and we're back around to Central Lompoc. For some background on the area, take a look at my first post on the area from a couple of years ago. Good grief, have I been writing this blog for two years now?

We have an interesting mix of numbers here this time around. We have 20 active listings on the market this afternoon, and unlike what I've been reporting for the area in the past, only 4 of these are REO's. 7 are short sales, and 9 are non-distressed. We do have 9 contingent sales in the area, and all of those are distressed (1 REO/8 SS).

Sales were slow for a while here, but appear to be picking back up. We have 13 pending sales now (4 REO/4 SS/5 Trad), again pointing to a little bit of a slowdown in distressed property activity here. But over the past three months, we've only had 13 total sales (8 REO/3 SS/2 Trad).

It would appear from the sold units in the past three months that we're seeing a little bit of a decline in values. But some of that is due to a lower overall level of sales than we've typically been seeing here and a higher percentage of REO sales over those three months. We sold just about half as many units here in the past three months as we sold in the previous three months, and any time you get a spike in the REO percentage of sales, you're almost bound to see some decline in values. On the other hand, with a lower percentage of our current active and pending listings being REO's I would expect to see some rebound in values a few months from now.

I still haven't figured out next week's topic, but I'm sure I'll come up with something between now and then. See you here next week.

Monday Morning Numbers 2/7/11

Well, that was a lackluster ending to the NFL season. An OK but not great game (and as a Bears fan I'm wired to hate the Packers). Probably the lamest batch of ads that I can remember. And that halftime show? Well, I'll just say that I'm probably not the target audience. And now we gotta wait 7 months to see any meaningful on-field action, if they can figure out the labor agreement thing.

OK, let's get to what you came here for:

Active Listings: 121

Contingent Listings: 38

Pending Listings: 39 (19.7% of the inventory)

New listings: 12

Months of inventory: 6.0
Click here for the updated price per square foot chart.

Another week, another similar looking set of numbers. We did see some more new listing activity this week, and it's interesting to note that out of those 12 new listings, there wasn't a single REO. I suspect that we'll see a minor run of REO listings sometime in the near future, because my running list of unlisted REO properties has edged up to the mid-60's. That's on the high side of where it tends to be. In the past when it gets up to that level we usually get a little bit of a run of them.

Later this week I'll take a look at activity in the central part of town. That's usually a good one to check in on because it's probably our highest volume area, and I can do a better job of spotting market trends.

A short sale rant...

If you've been reading this blog - or any other real estate resource - for the past couple of years, you've been hearing a lot about short sales. I've been telling you for a while that we're seeing a slow increase in the market share for short sales, and I've been expecting that to continue. And now, I'm going to spew a little bit of bile on the subject.

One of my pet phrases when I'm trying to work with an intractable short sale lender is that I'm performing what I like to call a "Cranial-Rectal Extraction" (CRE) on them (well, not to them directly - that wouldn't be very tactful or productive). I've had some success doing that in the past, but it seems that more recently, but with some of these, we're gonna have to break out the jaws of life to get that done.

Look, I've said this before, and I'll say it again - short sales aren't the absolute hopeless mess that they were in 2007 and 2008. But you know what? The progress being made by the major lenders has been pathetically slow. We've been in this mess for a long time, and they've had 3 or 4 years to figure out how to deal with this and fix their processes. And they haven't. I keep hearing things from them that they're improving their processes, and frankly I'm reminded of those Domino's ads that were running last year. You remember those? The ones where they acknowledged that they were making some crappy pizza in the past, but now they've reworked their recipes and they're making some really good pizza now?

Well, you know what? When it comes to short sales, the major loan servicers are still making some pretty crappy "pizza".

It's not just me. I spent most of last week down in San Diego at the California Association of REALTORS® Winter Meetings, and short sales were probably the biggest topic of discussion. And the discussions that I heard at various meetings weren't exactly filled with nice things. From senior leadership all the way down, I was hearing a lot of frustration with how these things are working. I heard more than one of my fellow directors making noise about pulling all of their business - everything from loan referrals to their own personal banking - from banks that shall remain nameless in this space. I heard one or two of them echoing something that I've had occasion to ponder myself: they were about to make a personal business decision to swear off ever touching a short sale where (insert name of your least favorite lender) is involved.

I know, I know... These are complicated transactions, the loan servicers have to answer to the investors that actually own these mortgage notes (and there are tons of those). And there are also second lien holders and mortgage insurance companies to deal with on these transactions. And I don't care. I'm tired of hearing that they're getting better, and I'm even more tired of hearing why they can't fix things.

I've made this point here before: About 40% of all the homes in our market are in a negative equity position. We aren't alone, and in fact there are several areas where that number is much worse. And the primary way we're going to get out of that hole is through property transfers of these negative equity properties. That can happen one of two ways - short sales and foreclosures. And consider for a minute that at least from what I can see, foreclosures sell for about 15-20% less than non-foreclosures. And yet somehow, it seems that we're still seeing way too many situations where short sales get honked up and the property gets foreclosed. And that's not good for anybody.

So what to do? Government intervention? Yeah, that's gonna work... But on the other hand, the free market has failed us horribly on this count, and I can't help but think that if our political leadership could come up with some useful way to standardize the process and hold the banks accountable, at least it couldn't get worse. I suppose that those of us in our industry are going to have to keep engaging the banks, both at a leadership level and down here where the rubber meets the road. And keep working on that CRE - even if we have to break out the power tools.

Monday Morning Numbers 1/31/11

Good morning! It's good to be home. I like San Diego, but being on the road without Diane gets to be old pretty quickly. Let's take a look at our market stats for this fine Monday morning:

Active Listings: 118

Contingent Listings: 35

Pending Listings: 40 (20.7% of the inventory)

New listings: 6

Months of inventory: 5.8
Click here for the updated price per square foot chart.

Another week with very minimal change in our market stats. New listing activity was slow for the second consecutive week. We're on another one of those plateaus that we seem to find pretty frequently. I suspect that we won't stay this low in listing activity indefinitely, but we're coming into a period where we typically see more sales activity as well.

Come back later this week, and I'll have a few choice words about short sales. I'll try to keep the language family friendly.

Focus On Southside Lompoc

Greetings from beautiful & sunny San Diego. At least I'm assuming that it's sunny - I've spent almost all of the past couple of days holed up in meeting rooms at our California Association of REALTOR® business meetings. At least I get to go out and wander around the Gaslamp Quarter a bit at night.

Before I head out and get a bite to eat tonight, I thought I'd take a little time out for you, my loyal readers (hey, there might be more than one), and give you a neighborhood update on the Southside. For some background on the area and a , you can refer back to my first post on it from a couple of years ago.

We actually have a fair bit of inventory here at the moment, and here's something I don't get to report every day: None of our active listings are REO's. We have 15 active listings, and 5 of them are short sales, and the rest are non-distressed sales. That changes a bit when we look at the sales activity, however.

We have 6 contingent sales in the area (1 REO/5 SS) and 4 pending sales (2 REO/2 Trad). Sales over the past three months have been a little light, with 9 sold units (4 REO/2 SS/3 Trad). It's kind of interesting to look at that - at least for now, it seems that we've eaten through a fair bit of our distressed inventory here. I'm sure we'll see more REO's in the active listings, and it probably won't be all that long before a few come on. I can identify 7 properties fitting the criteria I'm using here that have gone back to the bank but are not yet listed.

Looking at values, it appears that despite an increase in REO's in the sold units, prices have remained fairly flat overall in the area. No big surprise - the market as a whole seems to have stabilized at a pretty good, affordable level over the past 12-18 months.

I think I'm going to get on my soapbox next week and rail about some short sale issues. I haven't had a good rant in a while... You don't want to miss that.

Monday Morning Numbers 1/24/11

Well, that wasn't so good now, was it? I wonder if Caleb Hanie has any idea of how close he came to never having to buy a drink in Chicago? At least now you won't have to read about Bears football when you come here. At least until September...

Let's take a look at our market stats for this week:

Active Listings: 119

Contingent Listings: 36

Pending Listings: 45 (22.5% of the inventory)

New listings: 5

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

Inventory dropped slightly in a week with very light listing activity. Other than that - say it with me - no big changes this week. Part of the reason we had light listing activity was that we had no new REO listings for the week, and only one of the five was a short sale.

Since I didn't get the Southside update done last week, I'll see if I can get it in early this week. I'm headed down to San Diego to do the state director thing this week, but I should be able to fit in a little bit of blog work.

2010 Year In Review

I love it when I can get a news story to lead right into something that I was going to blog about anyway. Today we got a report from the National Association of REALTORS® that 2010 had the lowest number of home sales since 1997. And once again, I get to point out that the real estate market is best looked at on a very local level.

When I look back at 2010 in the Lompoc Valley real estate market, I see it more in terms of two halves than as one whole. We had a very active first half of the year with very low inventory, and a relatively slower second half with inventory numbers edging up. On the whole, we had 431 sold units in 2010, which is almost identical to the numbers that we saw in 2008 (433) and 2009 (427). We had our "sky is falling" year back in 2007, when our volume dropped to 260 for the year. You know, what the heck, let me graph that for you by quarter. You know I loves my graphs...

Wow, look at 2006 & 2007 in that graph. You want to talk about weak home sales - that's downright anemic. So sure, the national numbers dropped off this year. I guess we were ahead of that trend here by a few years.

Let's get back to 2010. Even though the overall numbers are very close to the previous two years, when we break it down, it looks like we were much stronger than 2009 in the first half of the year, and much weaker in the second half. There's a very easy explanation for that. Those home buyer tax credits that the feds (and to a lesser extent, the state) worked like gangbusters. Those are gone now, and with the federal and state budgets being the train wrecks that they are right now, I wouldn't hold my breath for them coming back anytime soon.

Distressed properties continued to dominate the market, but not quite to the extent of the past couple of years. REO sales accounted for 48.5% of last year's sales, and short sales were at 20.1%. The REO numbers were down from 62.3% in 2009 and 59% in 2008 (although I didn't have CCRMLS numbers when I ran the 2008 numbers, so that was probably a bit higher). Even though short sales didn't gain as much ground as I thought they might, they still increased in market share from 13% in 2009 and 7.4% in 2008).

As the year went on, our raw number for inventory increased, as you'll see from this chart. I'd call it an explosion of inventory, except that it was so low to begin the year that we almost had nowhere to go but up at the beginning of the year. Our months of inventory also jumped. Both of those measures seem to have stabilized over the past couple of months, and we're at about a level where most in our industry think of as a balanced market.

What caused the inventory to rise? Well, the decreased number of sales in the second half of the year was a big contributing factor. And we saw a little heavier listing activity than we saw the previous year with 566 new listings on the market (up 11.4% from 2009). 32.3% of the new listings that came on the market were REO's, and 28.8% were short sales.

Looking ahead, the forecast is a little hazy. I'm pretty sure that we're going to continue to see the lion's share of our activity centered around distressed sales, and it seems likely that we'll continue to see a rise in short sales. Overall our prices have been flat for quite a while now, although it does seem like the higher price ranges might still be declining a bit while we might be seeing a mild recovery in the entry level houses. I suspect that if our employment stays status quo, our prices will likely stay pretty stable. I am a little concerned about interest rates - there is a lot of speculation that they'll start climbing again sometime this year. But you know what, I've been hearing that for two years now. It does seem inevitable that we'll see some upward movement in rates - c'mon, under 5%? Are you serious? And we've been here for quite a while. I doubt that a modest increase would have a big impact on our market, but if they get into the 6 range again, we could have a problem.

I'm working on Saturday (but not Sunday due to the Bears/Packers game), so I'll see if I can work in a Southside update for you.

Monday Morning Numbers 1/17/11

Oh, baby. Bears. Packers. NFC Championship. Sunday. Oh, baby.

Let's take a look at our market stats for this beautiful Monday morning:

Active Listings: 125

Contingent Listings: 35

Pending Listings: 44 (21.6% of the inventory)

New listings: 14

Months of inventory: 6.1
Click here for the updated price per square foot chart.

We've had a pretty busy first two weeks of the year for new listings. The big bulk of these have been distressed sales - 6 of the 14 last week were REO's with another 4 short sales. But when I look at the four non-distressed listings that came on last week, it looks like 2 of them are investor flips of properties purchased either as trustee's sales or REO properties.

Since I didn't get to the 2010 wrap-up on Saturday, I'll try to get to it early this week, and then I'll see if I can fit in a neighborhood post later in the week.

2010 Fourth Quarter Update

Another quarter has gone in the books, and it's time again to step back and take a look at what happened in the Lompoc Valley real estate market over the past few months. My Monday Morning Numbers posts are great for keeping an eye on what's happening right now in the market, but I'm always happy when this time rolls around and I can step back and take a more comprehensive look at where we've been for the past few months.

Looking back at the fourth quarter, I'm seeing some changes that make me think that our market is shifting in some ways. For the most part, we're continuing to bounce along at about the same level as we have for quite a while now in terms of price. As I get into these numbers, I'll remind you that the first set of data that I have for you here is combined information from our local Lompoc Valley Association of REALTORS® MLS and Central Coast Regional MLS. Then I'll have a breakdown of some data that's just too time intensive to combine, and only comes from LVAOR.

We had a fairly light amount of activity last quarter with 94 sold units, down 22.3% from the same quarter in 2009. You may recall that we were down a bit back in the third quarter as well after a robust level of sales in the first half of the year. The tax credits that were being offered for home buyers drove a lot of demand, and when they expired we saw some decline in demand. We've gotten to a point now where the balance of inventory and demand is pretty much in line with historical norms.

Price levels still seem to be pretty stable when viewed across the board, as you'll see from this updated price per square foot chart. We edged up very slightly to about $142 per square foot on average in the market. The median price for single family home sales (not counting condos) jumped up a bit more to $229,900. When I look at those two charts, the thing that jumps out at me is how flat we've been for the past couple of years. I've said in the past that even looking at these numbers in an active quarter, we have a limited set of data. So I wouldn't put a lot of stock into any individual point on either of those charts, but over time they do a pretty good job of showing us some trends.

Looking at the mix of distressed and non-distressed sales, it appears that we're seeing a somewhat lower level of distressed property sales in our market. That said, distressed sales still dominate the market, with REO's accounting for 40.4% of sales, and short sales taking 20.2%. Neither of those numbers was significantly different from last quarter, but looking back a year things looked a bit different. In the fourth quarter of 2009, distressed sales combined to account for 75% of our market. A lower level of distressed sales - especially REO sales - would be a big boon to values in our market.

Now we'll get into the LVAOR-only numbers:

We saw a little shift in how sales were financed in the last quarter. Government backed loans continued to gain market share, with FHA accounting for 37.3%, and VA loans at 26.5%. Cash dropped off a little bit, down to 16.9% of the market, leaving us with 19.3% of the market financed with conventional mortgages. I suspect that there is a strong correlation between the drop in cash sales with the lower level of REO sales.

One of the things that results from shifting from a low-inventory market to a more balanced market is that market times get longer. We had a noticeable increase in median days on market for the fourth quarter, up to 36. That's not surprising given that we've seen an increase in inventory and a lower level of sales. Escrow times moved up a little bit as well to a median of 49 days. I would attribute that to a decrease in the number of cash transactions, which are typically much shorter escrows.

Another thing that shifted noticeably with the change in the market is the percentage of sales at or above list. Up until this quarter, we had been running in the 60-65% range for this measure for quite a while. In the fourth quarter, it dropped down to 41.5%. That's still a pretty respectable level. We aren't seeing multiple offers quite as frequently now as we were a year ago, so this is just another indication that things have settled down a bit.

I'm going to try to make time on Saturday to do a full year wrap-up of 2010. I've got some stuff on the schedule that might keep that from coming together, though, so it might slide to next week. Hey, it'll give you something to look forward to.

Monday Morning Numbers 1/10/11

Another new week dawns, and with it comes a fresh look at some Lompoc Valley real estate market stats:

Active Listings: 120

Contingent Listings: 37

Pending Listings: 42 (21.1% of the inventory)

New listings: 15

Months of inventory: 6.1
Click here for the updated price per square foot chart.

Let's start a pool - how many times will I write "no big changes this week" in 2011? But here we are - most of these numbers are pretty close to where they've been over the past few weeks. We did have a pretty big week for new listings this week, and a small uptick in properties under contract for sale (contingent and pending). Distressed sales were big again this week among new listings, with 4 REO's and 6 short sales.

Over the next few days I'll be cobbling together some of the 4th quarter market numbers for a wrap-up of that quarter, and then I'll have a 2010 year in review shortly after that. Come back later this week for those posts.

Focus On Mission Hills

OK, so my mid-week post is late again. I was out of town for most of the week. So shoot me. Let's take a look at the activity in Mission Hills this week. For some background on the area, check out my first post on the neighborhood from 2009.

For the first time that I can recall since I started writing these area specific "Focus On" posts, I have a neighborhood that is completely, 100% saturated with distressed property activity. Part of that might be because it's been a very light activity area. So light, in fact, that I had to expand out to my secondary MLS to find a couple more properties.

We have a whopping 2 active listings on the market here at the moment, 1 REO and 1 short sale. Contract activity is a little sparse as well, with 2 contingent listings (both short sales) and 3 pending sales (2 REO/1 SS).

Sales activity has been high relative to those numbers, with 7 sold units in the past three months (6 REO/1 SS). For quite a while, it seemed like this area was holding value a little better than the rest of the market, but right now the numbers would indicate that we might be seeing some price erosion. A big part of that goes to property condition, though. Most of these sales have been pretty rough. Most appraisers will tell you that they try to avoid using REO properties in an area when appraising a short sale or traditional sale, but when an area is saturated they have to use them and try to adjust. If 6 out of 7 doesn't qualify as saturation, I don't know what does.

Next week I should be getting the 2010 4th quarter wrap up together, and possibly the 2010 year in review right on its heels. Make sure you check in for that. I'll try not to keep you waiting until Sunday again...

Monday Morning Numbers 1/3/11

Happy New Year! Hope you didn't overindulge on Friday night - or if you did, at least that you've recovered by now. Let's take a look at our first market stats of 2011:

Active Listings: 122

Contingent Listings: 32

Pending Listings: 40 (20.6% of the inventory)

New listings: 9

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

It might be a brand new year, but these look a lot like last year's numbers. We had more new listings last week than I would have expected given that it was a holiday week. My first thought would have been that they were heavily REO listings, but no - 6 of the 9 were short sales. Interesting. It used to be that we would see a whole bunch of expired listings at the end of the year, and our inventory would take a minor dip. But the old norms have gone out the window in this market, as I've said a few times in the past.

I didn't get to a mid (or even late) week post last week. C'est la vie. Later this week I'll work on an update on Mission Hills activity.