Median Price        Jan26'07  from'06 $/SqFt Volume from'06
All homes           $660,000  1.8%     $463  1,693   -5.0%
Total resale houses $707,000  1.0%     $491  1,024   -8.3%
Total condominiums  $515,000  7.3%     $426    389     5.4%
Total new homes     $666,250  4.8%             280   -5.7%

 

But by February 23, 2007 the same table was:

Median Price        Feb08'07  from'06 $/SqFt Volume from'06
All homes           $660,000  0.3%     $464  1,479     0.3%
Total resale houses $710,000  1.1%     $484    894   -4.9%
Total condominiums  $510,000  5.4%     $431    336     6.7%
Total new homes     $629,000  2.4%             249    13.7%

 

At first glance, there doesn't seem to be much news here, right?  Prices, y-o-y pricing percentages and even price per square foot were all pretty stable. 

 

OK, then look again at these modified tables:

 

Median Price        Jan26'07  from'06

All homes           $660,000    1,693
Total resale houses $707,000    1,024
Total condominiums  $515,000      389
Total new homes     $666,250      280

 

But by February 23, 2007 the same table was:

Median Price        Feb08'07   Volume  from Jan26
All homes           $660,000   1,479   -12.6%
Total resale houses $710,000     894   -12.7%
Total condominiums  $510,000     336   -13.6%
Total new homes     $629,000     249   -11.1%

 

In other words, sales volume dropped over -12% in the space of one report!

 

We tried to wait for a second report to see if the change was a fluke but DQ just re-published the same data, through the same week, on Thursday (March 1, 2007).

 

Looking at San Mateo County (http://www.viewfromsiliconvalley.com/id157.html) on February 14, 2007:

Median Price        Jan23'07   Volume

All homes           $725,000     594
Total resale houses $780,000     444
Total condominiums  $500,000      97
Total new homes     $574,000      53

 

Followed on February 23, 2007 by:

Median Price        Feb02'07   Volume from Jan23
All homes           $735,000     414    -30.3%
Total resale houses $777,500     310    -30.2%
Total condominiums  $570,000      74    -23.7%
Total new homes     $624,500      30    -43.4%

 

 

Since DQ updated San Mateo numbers on March 01, 207, we see what might be a confirmation of the volume crash:

Median Price        Feb07'07   Volume from Jan23
All homes           $740,000     473    -20.9%
Total resale houses $777,000     360    -18.9%
Total condominiums  $574,500      79    -18.6
Total new homes     $590,500      34    -35.8%

 

Volume recovered a little with the extra five days of results but is still down double digits since late-January.

 

And then Santa Cruz County (http://www.viewfromsiliconvalley.com/id156.html) on February 14, 2007:

Median Price        Jan23'07   Volume
All homes           $665,000     210 
Total resale houses $715,500     160 
Total condominiums  $502,000      37 

Total new homes     $545,000      13

 

Followed by February 23, 2007:

Median Price        Feb08'07   Volume from Jan23
All homes           $680,000     165  -22.4%
Total resale houses $699,000     136  -15.0%
Total condominiums  $520,000      21  -43.2%
Total new homes     $477,636       8  -38.5%

 

The Santa Cruz numbers were also left unchanged in the March 1, 2007 publication.

 

Admittedly, San Mateo County and Santa Cruz numbers are always "thin"  compared to Santa Clara County, but since their joint sharp downward movement has to reinforce the "news" contained in this trend.

 

Big deal, this is just seasonal.  Well maybe.  Over a similar period, the last few years saw:

                      2007     2006     2005     2004

Santa Clara County  -12.6%   -9.8%   -6.9%    +0.8%

San Mateo County    -30.3%  -13.6%   -9.9%  -15.9%

Santa Cruz County   -22.4%   +16.0%   -9.3%  -13.5%

 

 

Conclusion:  After two years of negative y-o-y volume in all three counties, an additional volume drop of -12% to -43% in less than two weeks seems like it should be news.  Looking at recent history, this year's drop is definitely worse than "usual."  To see how, or even if, this impacts sales going forward, we'll have to wait and see.

 

If the traditional spring selling season (or buying season, depending on your point of view) is going to drive prices back up, they're going to need a LOT more volume than we're seeing now.

* * * * *
The above is not intended as advice to buy, sell or hold any stock, bond, real estate nor any other financial product or service.  Invest at your own risk. (As we do ourselves.)