Thursday, July 10, 2008

Indicator of Things to Come

Every time I look at the latest market stress stats, the first word that comes out of my mouth is, "wow." I am still pretty floored at how rapidly both these zips are deteriorating. I think my earlier predictions, of another 10% drop, may have been too tame. Gas at $4.50 a gallon surely isn't helping.

I should also note that EDH's inventory is a bit misleading (tall green bar), while it looks high relative to Folsom, a third of the inventory is homes over $800,000. They are selling at a very very slow pace. I think there were 8 pending out of 150 homes when I last checked. Can you imagine the carrying cost on those for two years...yikes!

10 comments:

PeonInChief said...

What's most interesting to me is that the combined total of NODs and foreclosures is greater than the number of market listings in Folsom. That's not a good sign.

Sippn said...

Is the count on foreclosures and NODs per month? YTD? and are the NODs for the same properties?

Deflationary Jane said...

Aren't you glad you walked away from that last offer now? It was a nice place but you are smart enough to do much better.

Now imagine living in a city where you could pay cash for a decent place? I promised myself we wouldn't even look for another year but the temptation is tough when you see a place that would have set you back 450k to 500k in 2008 back home and know you could pull out your checkbook and ask "so who do I make this out to?"

I will never look at CA RE the same way again.

Buying Time said...

Sippn - These are just the ones that are "active" in www.foreclosure.com. There are some duplicates, but not many. I know you have a couple years on me....have you ever seen it this bad before?

DJ - Yup, we are pretty much done looking for quite some time...at least till the market stress numbers start to level off or abate.

Cash for a home...nice! Can't beat that for opportunity cost (not paying rent). Certainly a much better return than the stock market or CDs right now.

erin@erinattardi.com said...

I was just discussing the state of the El Dorado County market with another agent yesterday. I have a client who wants to purchase a home there who I am referring to another agent...We were going over some facts and trends there.

I should tell you that I have never done a real estate transaction in El Dorado County, nor would I (I refer clients to other agents there) since it is not my area of expertise.

The median price overall in El Dorado Hills/Cameron Park/Shingle Springs has actually increased for the last 3 months in a row, and overall inventory is around 7.5 months (still a buyer's market).

If you look at the segment of the market there under $400k, the median price in that range seems to be flat for the last 4-5 months, and inventory is 4.6 months (seller-sided market).

However then looking at homes over $800k, there is over 17 months of inventory (big-time buyers market)...interesting thing is that the median price over $800k has also increased over the last couple months.

In all three scenarios, a "couple months" is definitely not enough data to call a "trend" at this point, but that will be interesting to watch. I think El Dorado Hills is a nice area and all, but I certainly would be extremely reluctant to suggest to a buyer to look in that area right now under many circumstances. The client I have referred to another agent up there is well aware of the state of the market, but is seeking to make a purchase in the lower price range there (which is a much more brisk market), wants to start a family, and wants to stay in the home a long time and is willing to let the market play out.

G Spot1 said...

"However then looking at homes over $800k, there is over 17 months of inventory (big-time buyers market)...interesting thing is that the median price over $800k has also increased over the last couple months."

I'm not sure you could draw any conclusions from median price at this point. Sales are so slow (17 months inventory!) that there just aren't enough houses for median price to be a reliable indicator of anything. I also think that the hardest price range to sell right now is probably from about $400k or so up to about $1m, since sales in this range in recent years were so dependent on creative financing that is no longer available.

Median price aside, higher end homes in this region will continue to lose value until inventory comes down.

Paul said...

As for Cameron Park (95682), it is my opinion that median list price has gone up dramatically in the past few months as a flood of +$500k (up to $20 million, yes, million) homes have come on the market in the past 90 days. Most are "optimistically" priced IMO. At the same time, NOD's in CP have increased by about 20% over the same 90 days. I am guessing that flood of upper end homes is tied to the pending option resets this fall and folks are hoping to sell before the loans reset. Good luck. Actually sales activity over $500k is nil.

Patient Renter said...

The median price overall in El Dorado Hills/Cameron Park/Shingle Springs has actually increased for the last 3 months in a row, and overall inventory is around 7.5 months (still a buyer's market).

So more higher priced homes are being listed.

I'd like to take this opportunity to point out that "buyer's market" seems to mean different things to buyers and Realtors (TM).

To me, as a buyer, a favorable market is one in which prices are not heading down. To a Realtor (TM), a favorable market is one in which sales are moving along at a certain level. Buyers don't care about sales, they care about prices. Keep in mind, inventory and sales are not the sole factors effecting prices, and it's only the prices that matter to buyers.

Proclaiming a "buyer's market" strictly in the context of sales is meaningless unless you're a Realtor (TM)... which is maybe why this phrase is spoken by Realtors (TM) more than anyone else.

Husmanen said...

Patient Renter - I like that train of thought and logic. I think I will use it on my next conversation with my agent (who is a friend and will not get offended). Thanks.

erin@erinattardi.com said...

Those are sales prices - not listing prices.

Erin