|
|
 |
|
|
|
August 19, 2006
View from Silicon Valley- The last 30 days. (Aug'06 edition)
(c) copyright View from Silicon Valley, 2006. All rights reserved.
Are we in the last days
of the Silicon Valley real estate boom? It's impossible to say with certainty but one way to gain insight is looking
at the numbers.
Starting
March (2006) we documented median house prices in Silicon
Valley make most of their annual increases from February to April. We found the
six months starting July showed median price changes of:
+0.0% (2003),
+1.6% (2004) and
-0.9% (2005) over the last three years.
So how are prices
doing lately?
Re-creating our "The Next 60 days'" table,
using the local paper's figures for "Total Resale Homes":
Median +/-$ 2003
2004 2005 2006
January
-$4K -$47K -0-
+$1K
February +$7K
+$52K +$22K +$17K
March
-$10K +$39K +$33K +$12K
April
+$15K +$11K +$17K -$10K
May -$4K
+$15K +$8K +$27K
June
+$29K +$9K +$15K +$15K
July -$24K -$9K
-$5K -$20K --YTD = +$42K
August
+$17K -0- +$14K
September -$3K +$5K -$9K
October
+$10K +$5K +$9K
November -0-
-0- +$1K
December -0-
+$10K -$15K
Total +$43K +$90K +$90K
So far, the 2H06 Santa Clara County median is -2.6%.
Is this just a momentary pause on the local real estate rocket ship?
Or the seasonal flattening we've seen the last three years? Or something more? As always, time will tell.
Comparing
YTD numbers for the last four years, we find
YTD +/-$ 2003
2004 2005 2006
thru July +$9K +$70K +$90K +$42K
July was negative in all four years. Obviously, +$42K
is still "better than a sharp stick in the eye," as my grandmother was known to say.
However, 2006 is YTD weak compared
to 2004 or 2005.
Building
on an item we mentioned last month, let's peek at YTD volume over the last few years.
Resales
Sold 2003 2004 2005 2006
July 1,887 2,045 1,887 1,262
YTD 10,785 13,762 12,236 9,289
To make things
more interesting, let's invent a "new" statistic "year-over-two-years-ago" or "y-o-2y":
Resale
Units 2003 2004 2005 2006 y-o-y y-o-2y
July 1,887 2,045 1,887 1,262 -33.1% -38.3%
YTD 10,785 13,762 12,236 9,289
-24.1% -32.5%
Y-o-y volume is down. July's
decline was worse than the YTD average. Volume in 2006 is running -13.9% behind
even 2003, which was overall a fairly weak year.
We don't have complete data but let's
also look at DataQuick's total listings:
2006:
January 12 1,687
February 9 1,818
March 9 2,103
April
9 2,194
May 7 2,606
June 8 2,974
July 6 3,185
August 10
3,389
Total listings are up over 100% since
January. The current figures match 2003 levels.
Breaking down the details:
2005 Peak Since
All Homes(*) Current Peak Date Peak y-o-y
Santa Clara Co. $685K $670K May
26 xxxx 3.9%
San Mateo Co. $770K $775K Aug.19 -0.6% -0.1%
Santa Cruz Co. $675K $720K May 26 -6.3% -3.6%
Resale Homes
Santa Clara Co. $750K $725K May 26 xxxx 7.1%
San Mateo Co.
$820K $830K Aug.19 -1.2% 1.9%
Santa Cruz Co. $759K $775K Nov.04 -2.1% 1.2%
*= through July 27
* * * * *
Re-formatting the tables,
the "All Homes" y-o-y figures are:
Santa
Clara San Mateo Santa Cruz
County County
County
Dec'05 14.8%
12.5% 17.4%
Jan 15.5% 8.2%
13.5%
Feb 14.2%
6.4% 12.6%
Mar 10.2%
3.4% 8.0%
Apr 6.3%
-0.1% 11.5%
May 7.0% 3.4%
8.3%
June
4.7% 2.6% 0.0%
July* 3.9% -0.1% -3.6%
Running the same y-o-y
numbers for Resale Homes:
Santa
Clara San Mateo Santa Cruz
County County
County
Dec'05 16.5%
10.7% 10.9%
Jan 13.6% 10.8%
4.7%
Feb 13.0%
5.7% -0.3%
Mar 10.6%
3.8% 3.8%
Apr 5.1%
2.5% 10.8%
May 9.4% 2.0%
5.7%
June 9.2%
1.9% 5.7%
July 7.1% 1.9% 1.2%
Slowly but surely, y-o-y gains are decelerating.
Red numbers are popping up more frequently.
Bottom Line: Does a unit volume decline, or a further
unit volume decline, on top of growing inventory, "dictate" a fall in prices? To disagree argues against
100's of years of economic statistics. As always, time will tell.
* * * * *
The above is not intended as advice to buy, sell or hold
any stock, bond, real estate nor any other financial product
or service. Buy and sell at your own risk (just like we do.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|