Here is an indicator to measure how the market gets started in 2013 – count the new listings.
We have seen how the inventory impacts the buyer mentality. When homes-for-sale are plentiful, buyers are more relaxed and deliberate. When there is a shortage of inventory, the anxiety heightens, and bidding wars ensue.
The first quarter of 2012 looked like the previous two years. But you can see below how the new listings dropped starting in April, and probably contributed to sales jumping in August as nervous buyers scrambled.
Fewer new listings in April-to-July = stronger sales in August-to-October:
NSDCC Detached-Home Monthly Sales Counts:
The shortage of new listings look like they could have been a temporary event – because since August the number of new listings have been fairly similar to previous years. It should be irresistible for potential sellers to flood the market with OPTs in 1Q13. If they do, buyers will grow cautious, and sales could hit the skids.
We’ll know what to expect just by counting the new listings. The January & February 2012 two-month total was 794 houses listed, when in the previous two years it was around 900, only a 12% dip approximately. But the 2012 April-to-July new listings were about 18% lower than the previous year – that’s when we’ll see how 2013 will turn out!
I have two tickets to see X at the Casbah on Sunday night, and now I can’t go.
Does anyone want them?
https://www.youtube.com/watch?v=SkIdHdYEFvA
“I have two tickets to….”
Ugh…..now I won’t be able to get Eddie Money out of my head for the rest of the day.
This might have an effect on the so called shortage.
http://www.latimes.com/business/la-fi-fiscal-cliff-san-diego-20121219,0,5560212.story
For listings, it’s the worst year on record going back to 2000 for SD County.
I made this chart from Sandicor data of all listings for San Diego County from 2000-2012. (I estimated December 2012 based on November)
http://i.imgur.com/VCCf4.png
Listings are way down, pretty brutal, but sales are very strong, best since 2005. Will next year be better for listings? I don’t know, I think we probably need another 20% appreciation to really unlock the move-up buyers and get things rolling again.
From Daniel’s link:
“Nassco, whose 3,600 employees make it the largest industrial manufacturing firm in San Diego, had planned early this year to lay off 350 workers but reversed course as the economy improved.”
That article doesn’t suggest that the sky is falling. Like many of the media outlets, it is written by a new guy who is trying to fluff up his prose so it seems sexier than it is – the article says nothing.
I’m fine with the shortage of inventory, because tough conditions eliminate the weak.
Thanks Jakob for a fine graph.
Interesting to note that in the boom-boom era, listings-to-sales was about 2:1, or under.
Around NSDCC in 2012 there were 4366 detached listings, and 2,988 sales so far. Ratio is 1.46 to 1, which is incredibly powerful.
Don;t you just love the media? I only posted because of how they are driving a narrative that may not be true. How many others have we seen over the last few years?
Don’t be surprised in 2013 to see fewer new housing listings than predicted. Why? One reason is, a house offers real value.
Assume you’re getting older, have limited income, and that almost all your savings are tied up in the house you live in. And, assume you you could sell that house today for $1 million, tax free.
On the face of it, “old” reasoning suggests it’s time to sell because it’s risky to commit any one investment class. But, this year I expect sellers to ask, what will the cash buy?
With interest rates at absurdly low levels, it’s not reasonable to expect people to convert a million dollar asset into cash that will earn < $1,000/month. (Downsizing presents similarly depressing prospects.)
A house is an asset, just like cash. Sometimes cash offers great prospects, sometimes housing does. It's reasonable that many have been scared stiff lately by the (risk) volatility of housing. But, like it or not, the simple truth we face is, Gov't. intervention has determined that time is over.