Friday, November 16, 2007

Month's Inventory by Zip for Oct/Nov

Finally some data I can sink my teeth into. Looks like month's inventory has shrunk considerably. Sales have increased compared to last month, and inventory has decreased....for a double whammy.

Does this mean I'm going to get a new letter from my lender......heck no...we are still at an average of 10.6 month's inventory for the zips I track. Only 3 holdouts below the 6 month demarcation line (where buyers and sellers are believed to be on equal footing).

In case you are new to the blog....the inventory is gathered from ZipRealty (single family homes), and the sales are from DataQuick via the Sacramento Bee.


G Spot1 said...

16.1 months of inventory in Granite Bay... I think perhaps the jumbo mortgage problems are having an effect. I am a bit surprised inventory hasn't fallen off further in GB due to fall season. I've been seeing lots of homes with unrealistic prices out there and am wondering how many of these people are upside down with resetting ARMs and are trying to get out. Or perhaps people think Granite Bay is immune to the downturn...

Sippn said...

Glad you brought that up. Mostly this year the inventory level didn't really grow. . . in fact the peak is less than last year. . . . it was the sales rate that shrank. . . it takes both numbers to create the # months stat.

Granite Bay is not immune at all. I am seeing huge discounts (I like to look at stuff above $1 mil - living vicariously) in some cases because a seller has run out of funds.

However, sellers with a mill plus to spend have been buying at a rate of just over 1/day in the 4 counties over the past 2 months. Its not the main market, but interesting.

I think lending has become available again and patience is wearing thin.

sacramentia said...

The jumbo market completely locked up in Aug but since about the begining of Oct. the loans have been available if you have 20% down and solid credit. Just had a friend get 925k@6.75 - that is pretty reasonable and less than a half point premium over conforming.

The over $1M market in EDH has held surprisingly well over the last year with the first signs of weakness showing up after the credit issues in Aug. A couple homes have gone for about 10% less than the norm.

I've walked through almost everything custom on the market in EDH and in general the stuff that is not selling is poorly done. (<2M) Choppy floorplans, mismatched fixtures (although very expensive), poor lot selection/house position on lot.

The truly nice plans and well done homes are still selling and the sales numbers show this. Over 2M is a different story - just way way way to many specs chasing a few buyers each year.

It's like every spec builder used the same formula. If houses sell for 350/ft, the bigger I build the more profit I will make while completely ignoring the total available market. But this brings up a different point for another post.

The dollar per square foot analysis is the fundamental flaw in the way that buyers and lenders evaluate the market.

Buying Time said...

Thanks for the scoop SacTia. 1 mill...way out of my league...but interesting stuff nonetheless.

And your right....all the metrics have their flaws....median, average, square foot.

Speaking of metrics, would love to get a hold of some stats on vacancy rates and investor vs. primary residence purchases....if anyone knows of some sources.

smf said...

The truly nice plans and well done homes are still selling and the sales numbers show this.

But with the burgeoning inventory, the truly nice homes are few and far between.

I have witnessed complete market lock-up in EDH. (My in-laws live there)

Serrano is getting into trouble, Spec mansions are waaaay too many, etc.

And speaking of mansions, most of them do follow the tired formula of everything neutral throughout, therefore making certain that in the end, they satisfy no one.