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.