The Last 30 Days (Mar'07 Edition)

March 19, 2007

The Last 30 days (Mar '07 Edition)

House prices in Silicon Valley make most of their annual increases in the spring. Since 2003, median prices after June 1 showed changes of:

2003: 0.0%

2004: +1.8%

2005: -0.7%

2006: -7.8% (= -$60K!!)

2007: TBD

So how are prices doing lately?

Updating the "The Next 60 days'" table for "Total Resale Homes":

Median +/-$ 2003 2004 2005 2006 2007
January -$4K -$47K -0- +$5K -$3K

February     +$7K   +$52K   +$22K   +$17K   +$42K
March        -$10K   +$39K   +$33K   +$13K
April        +$15K   +$11K   +$17K   -$10K
May          -$4K   +$15K    +$8K   +$30K
June         +$29K    +$9K   +$15K   +$15K
July         -$24K -$9K    -$5K   -$20K
August       +$17K   -0-    +$14K   -$25K

September    -$3K    +$5K    -$9K   +$10K
October      +$10K +$5K    +$9K    -$1.5K
November     -0- -0-     +$1K     +1K
December       -0-   +$10K   -$15K   -$24.5K
Total        +$43K +$90K   +$90K    +$5K

Comparing YTD numbers for the last four years, we find

YTD thru 2003 2004 2005 2006 2007

February +$3K +$5K +$22K +$22K +$42K

Let's peek at YTD volume over the last few years.

Resales 2003 2004 2005 2006 2007

February 982 1,276 1,232 1,001 1,021

The monthly realtors' blurb focuses on current volume and price vs. last year (y-o-y). To make thinks a little more interesting, let's invent a "new" statistic "year-over-two-years-ago" or "y-o-2y" and "year-over-three-years-ago" or "y-o-3y":

Resales 2003 2004 2005 2006 2007 y-o-y y-o-2y y-o-3y

February 982 1,276 1,232 1,001 1,021 +2.0% -17.1% -20.0%

YTD 2,664 2,958 2,485 1,932 2,004 +3.7% -19.4% -32.3%

*= as of December 27

Here are single-family DQ and MLS resale listings for 2006. This month we added "months' supply of sales" implied by these listings:

DQ Supply MLS Supply

January 12 1,687 1.81x

February 9 1,818 1.82x

March 9 2,103 1.32x

April 9 2,194 1.50x

May 7 2,606 1.83x

June 8 2,974 1.84x

July 6 3,185 2.52x

August 10 3,389 2.47x

September 7 3,401 2.85x 4,201 3.52x

October 5 3,389 2.95x 3,899 3.39x (DQ+100.9% YTD)

November 7 3,070 2.64x 3,496 3.01x (DQ +82.0% YTD)

December 6 2,571 2.20x 2,843 2.44x (DQ +52.4% YTD)

January 1,969 2.00x 2,554 2.60x (DQ +16.7% Y-O-Y)

February 8 2,238 2.19x 2,901 2.84x (DQ +23.1% Y-O-Y)

March 3,156 (DQ +50.1% Y-O-Y)

MLS data is pulled within a day or two of this missive's creation (meaning the "as of" date lags ~two weeks).

Breaking down the details:

Peak Since

All Homes Current Peak Date Peak y-o-y

Santa Clara Co.*$670K $690K Jul26'06 -2.9% 0.4%#

San Mateo Co. **$733K $775K Jul20'05 -5.4% 5.2%

Santa Cruz Co.**$664K $720K May26'05 -7.8% -2.2%

*=- thru February 26

**= thru February 20

# = we continue to calculate actuals. Effective this month, we will no longer reference the mis-reported figures. (You can get those from the local paper.)

Peak Since

Resale Homes Current Peak Date Peak y-o-y

Santa Clara Co. $749K $772K Jul20'06 -3.0% 3.5%

San Mateo Co. $795.5K $830K Aug11'05 -4.2% 1.3%

Santa Cruz Co $715K $775K Nov04'05 -7.7% -0.35%

San Mateo and Santa Cruz numbers are much more volatile than Santa Clara County. They bounce, up and down, on lower volume, more than Santa Clara County, on a regular basis.

* * * * *

"All Homes" y-o-y:

SantaClara SanMateo SantaCruz

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%

August 1.7% -2.0% -3.5%

Sept. 2.3% -2.0% 3.2%

Oct. 2.0% -1.8% 0.0%

Nov. 2.0% -1.3% -8.5%

Dec. 0.9% -1.2% -2.9%

Jan'07 0.8% -1.3% -2.9%

Feb'07 4.0% 5.2% -2.2%

"Resale Homes" y-o-y:

SantaClara SanMateo SantaCruz

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%

August 2.8% 1.9% -2.3%

Sept. 4.3% -1.8% 1.1%

Oct. 2.7% 0.0% -4.2%

Nov. 2.1% 1.3% -3.3%

Dec. 1.4% -1.2% -3.6%

Jan'07 1.0% -1.0% -0.3%

Feb'07 3.5% 1.3% -0.35%

Bottom Line:

We got a huge +$42K on Santa Clara County resale homes in Feb'07 numbers, on 102% of Feb'06 volume. Is this beginning of another leg up in the housing boom?

Or a last gasp as the last of the suckers (err, desperate buyers, OK, "late-cycle" buyers) get "in." As you can see for yourself above, Feb'07 volume was -17% y-o-2y and -20% y-o-3y.

We heard a story this weekend from a couple finally "winning a bid" two weeks ago. They explained this was their 10th or 11th attempt to buy a house over the last two years and they were now "experts" on how to price and structure bids on multiple-bid properties...

How many folks do we have left still trying to acquire this skill? Compared to how many plan to wait until such a "skill" is no longer needed?

* * * * *

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.