More San Fernando Valley home sale information - April 2009

Here is the various Back On Market (BOM) ratios for April2009 home sales. Note, the local REALTOR® group uses the BOM as a % of sales as their preferred metric.

The above is total sales, new pendings and BOM for April 2009. It will be interesting to see how much more the needle can be pushed. Supply isn't very good, turnaround times on mortgages are getting high, the economy is doing bad and rates just jumped. Something has to give.

This graph is identical the the graph above except for the red line. This red line is a sales estimate based on BOM and current month pendings shifted forward 60 days in time to account for escrows and reporting lag. It seems to report a bit low during the spring and a bit high during the winer. It is predicting total sales of around 1080 next month which feels a bit low but in the ballpark (I think it will be 1120-1160).

Note: I have added no cost (supported through blog advertising) foreclosure research to the blog, see here.

More San Fernando Valley home sale information - March 2009

Here is the various Back On Market (BOM) ratios for March 2009 home sales. Note, the local REALTOR® group uses the BOM as a % of sales as their preferred metric.


Here are total sales, total pending and total BOM while pendings leveled off there is still a large number of homes under contract and trying to clear contingencies. I'd expect pendings to rise significantly going into summer. I am also predicting that once this rush of buyers clears through the system we will see year-over-year sales declines around July or August. Currently lenders are being hammered so I could see more of a steady rise of sales instead of a leap as the remaining understaffed lenders work off the backlog of pendings.

This graph is identical the the graph above except for the red line. This red line is a sales estimate based on BOM and current month pendings shifted forward 60 days in time to account for escrows and reporting lag. I have no idea if it is a valid way to look at the market I'm just going to follow it for a bit to see how well it does. It is predicting total sales of around 820 next month which feels a bit low but in the ballpark (I think it will be 880-900).

More San Fernando Valley home sale information - February 2009

Here is the various Back On Market (BOM) ratios for February 2009 home sales. Note, the local REALTOR® group uses the BOM as a % of sales as their preferred metric.

Here are total sales, total pending and total BOM while pendings leveled off there is still a large number of homes under contract and trying to clear contingencies. I'd expect pendings to rise significantly going into summer. I am also predicting that once this rush of buyers clears through the system we will see year-over-year sales declines around July or August. Currently lenders are being hammered so I could see more of a steady rise of sales instead of a leap as the remaining understaffed lenders work off the backlog of pendings.

This graph is identical the the graph above except for the red line. This red line is a sales estimate based on BOM and current month pendings shifted forward 60 days in time to account for escrows and reporting lag. I have no idea if it is a valid way to look at the market I'm just going to follow it for a bit to see how well it does. It is predicting total sales of around 770 next month which feels a bit low but in the ballpark.

More on December San Fernando Valley home sales - 2008

Here are the various Back On Market (BOM) measures for San Fernando Valley home sales. Each kind of tells a slightly different story, BOM as a percentage of sales is falling, BOM as a percentage of current pendings is flat and BOM as a percentage of last months pendings is rising. The SRAR chooses to use BOM as a percentage of sales as what they track. They all were around 37% last month. A healthy chunk of aren't able to close.

Total sales (SFH + Condo) were 922 last month. Total pendings for the month came in at 914 and BOM for December was 342. January will definitely be better than last year but clearly not be as good as December '08. That is normal seasonality of January and February being the slowest months of the year. If we use history as a guide, we should start seeing pendings and New listings pick up after the Super Bowl.

San Fernando Valley November 2008 home sales report

The official November 2008 numbers are out. Homes sales (SFH) came in at 633 (my estimate was 630) which was down 15.03% MoM and up 78.31% YoY. Median price came in at $375,000 (my estimate was 385,000) which is down 8.54% MoM and down 32.74 YoY. SFH median prices are currently down $280,000 from the peak or -42.7%. October and November of last year were the weakest months of the year due to the lenders pulling away from securitizing mortgages and Countrywides famed troubles so the year over year comparisons are easy to beat. Sales are still weak and prices continue to fall.

Condo sales came in at 199 (my estimate was 202) which is down 14.95% MoM and up 41.13% YoY. Median price came in at $220,000 (my estimate was $245,000) which was down 2.22% MoM and down 41.33% YoY. Condo sales are still performing horribly despite massive declines. Considering all the condo projects in the valley this doesn't look to reverse anytime soon.

Here is the Back on Markets relative to sales, this months pendings and last months pendings. I am trying to find the best representative way of showing how pendings falling out of escrow are affecting sales.

Sales for November totaled 832, escrows opened in November totaled 951 and BOM came in at 355. Based on current pendings and BOM ratios compared to previous trends Decembers total sales (SFH + Condos) should come in around the 650 range.

As the PMI changes take affect combined with the Jumbo conforming limit dropping we will see the mid to high level market taking the brunt of declines. People wanting a loan above the Jumbo conforming limits will pay a high premium and the people wanting to pay less than 85% LTV on a Conforming Jumbo will have to go FHA which can be restrictive. From what I am seeing is an inkling of what is to come in some of the data. You see the conforming loans staying liquid and closing pretty well. Above the conforming limit there is this logjam of contingent homes waiting to close, I am assuming besides the normal bank delays for short sales and REOs that financing is an issue and people are working to get deals closed before buyers give up. This may have contributed to the decline in median due to mix shift. The higher up the price range you go the less demand is able to be effective.

Back on Market for San Fernando Valley October 2008

Graph of Total Sales, Total Back On Market (BOM) and monthly Pendings:
Back on market as percentage of current pendings and previous months pendings:

Back on market as a percentage of the average of the previous 3 months pendings average:

Total Back on market came in at 439, down 1 from 440 the month before and up 219 from 220 the year before.

Pendings for October 2008 came in at 1180, down 120 from 1305 the month before and up 574 from 606 the year before. Fallout is still very high and if pendings slow down even a little we will see a dramatic drop off in sales.

Back on Market..

I'm still struggling with the best way to represent that amount of homes falling out of escrow. The above graph represents the current months Back On Markets (BOM) divided by the average of the previous 3 months pendings. The number of properties going pending in September was the strongest month this year at 1305, no sign of a seasonal slowdown in that regard. This months number of BOM was also the largest number this year at 440. While we have seen an increase in pendings sequentially every month this year this hasn't translated directly into an increase in sales each month. It is looking like the fallout is winning the war.

If a seasonal slowdown does come the fallout ratio will spike and sales will fall even more dramatically than normal. If the seasonal slowdown doesn't come then one of two things will be happening 1) Housing is in recovery mode, not likely, but you'll be able to tell if this is true by watching prices firm up or 2) The lenders have stayed motivated to move inventory during the fall/winter months and you will see if this is true by watching prices plummet.

Update:

Here is the BOM as a percentage of the current months pendings (blue line) and as a percentage of the previous months pendings (red line).

Here is a chart of sales (orange) , pendings (green) and BOM (purple) over time.

Fallout.

This is the Back On Market ratio compared to the previous 3 month average pendings. There is clearly a high amount of fallout happening and I think once offers slow even a little we will see sales fall faster than normal. I think the high amount of fallout is for many reasons, the moving target that is today's mortgage market, the lack of quality of the inventory on the market (more likely to find inspection issues), the number of POORLY managed short sales on the market (many agents are in a "let's throw it up on the market and see what sticks" mood, it's either laziness or inexperience). I tried getting data before February 2007 since that is where my data ends and I have an inkling that the fallout ratio for the few years before that was in the sub 20% range. Finacing fallout was much less due to the ability to qualify anyone so you are left with personal and inspection reasons for the deal falling apart. The few data points I could find support this 20% fallout thesis but I don't have enough for it to be cut and dried.

Jim the Realtor has seen the same thing with his REO listings (all in multiple offer situations) in his San Diego market and his comment is, "And it's only going to get tougher the next few months." I agree wholeheartedly.