October 22, 2007

View from Silicon Valley-  The Last 30 Days (Sep'07 Data)

(c) copyright View from Silicon Valley, 2007.  All rights reserved.



House prices in Silicon Valley make most of their annual increases in the spring.  Since 2003, 2nd-half prices showed a median change of:

2003:   0.0%
2004: +1.8%
2005:  -0.7%
2006:  -7.8%  (= -$60K!!)
2007:  -0.6% (here we go?!?)

So how are prices doing lately? 

Before we dig in, regular readers may notice some of the prior-month numbers below changed since our last report.  We believe DQ is trumpeting front-month numbers with great fanfare in press releases then revising down prior month numbers when nobody is looking.  A re-check every couple months consistently finds sales figures shifted:


Median      2003    2004    2005    2006    2007
January     -$4K   -$47K     -0-    +$5K    -0-
February    +$7K   +$52K   +$22K   +$17K   +$39K
March      -$10K   +$39K   +$33K   +$13K    +$6K
April      +$15K   +$11K   +$17K   -$10K   +$48K
May         -$4K   +$15K    +$8K   +$30K    -$9K
June       +$29K    +$9K   +$15K   +$15K    -$3K
July       -$24K    -$9K    -$5K   -$20K   +$15K
August     +$17K    -0-    +$14K   -$25K    -$1K
September   -$3K    +$5K    -$9K   +$10K   -$16K
October    +$10K    +$5K    +$9K    -$1.5K
November     -0-    -0-     +$1K     +1K
December     -0-   +$10K   -$15K   -$24.5K
Total      +$43K   +$90K   +$90K    +$5K

Despite the excitement seen in headlines, the median is now -$14K over five months since April, 2007.

Comparing YTD numbers for the last four years, we find

YTD thru   2003    2004    2005    2006    2007
Sept.     +$23K   +$75K   +$95K   +$25K   +$79K

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

Resales   2003    2004    2005   2006   2007
September 1,945   1,865   1,759  1,192    898
YTD      12,730  15,627  13,995 10,481  8,979

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":

Resale
Units 2003   2004   2005   2006  2007  y-o-y  y-o-2y  y-o-3y
Sep  1,945  1,865  1,759  1,192    898 -24.7% -48.9%  -51.8%
YTD 12,730 15,627 13,995 10,481  8,979 -14.3% -35.8%  -42.5%

Part of the rationale for ignoring y-o-y (and even y-o-2y) volume is the claim there aren't enough properties for sale.

Fortunately, we have this data also:

            DQ    Change      MLS#
Jan12'06   1,687
Feb 9      1,818
Mar 9      2,103
Apr 9      2,194
May 7      2,606
Jun 8      2,974
Jul 6      3,185
Aug 10     3,389
Sept 7     3,401              4,201
Oct 5      3,389 +101%/YTD    3,899
Nov 7      3,070  +82%        3,496
Dec06'06   2,571  +52%        2,843
Jan09'07   1,969  +17%/y-o-y  2,554
Feb 8      2,238  +23%        2,901  +13.9%/YTD
Mar 8      2,841  +50%        3,156  +23.6%
Apr 5      2,812  +28%        3,680  +44.1%
May 3      3,332  +28%        4,255  +66.6%
Jun 7      3,809  +28%        4,501  +76.2%
Jul 5      3,972  +25%        4,510  +76.6%
Aug 2      4,156  +23%        4,936  +93.3%
Sep 7      4,701  +33%        5,097  +99.6%
Oct 11     4,866  +44%        5,222 +104.5%

MLS data is pulled within a day or two of this missive's creation.

                                Peak     Since
All Homes      Current  Peak    Date      Peak    y-o-y
Santa Clara Co.$696.5K  $709K  May30'07   -1.8%    2.2%
San Mateo Co.   $760K   $810K  Apr30'07   -6.2%    3.9%
Santa Cruz Co. *$715K   $735K  May26'06   -2.7%  -14.5%

*= as of September 26

                                 Peak    Since
Resale Homes  Current   Peak    Date     Peak    y-o-y
Santa Clara Co*$789.5K  $800K  Jul31'07  -1.3%     7.2%
San Mateo Co.  *$819K   $925K  Jun26'07 -11.5%     1.1%
Santa Cruz Co  *$700K   $775K  Nov04'05  -9.7%    -6.7%

*= as of September 26

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'06  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'06   0.9%      -1.2%     -2.9%
Jan'07   0.8%      -1.3%     -2.9%
Feb'07   4.0%       5.2%     -2.2%
Mar'07  -0.8%      -4.0%     -1.5%
Apr'07   5.0%       7.3%     -1.0%
May'07   4.9%       5.5%     -4.8%
Jun'07   2.6%       3.2%      1.4%
Jul'07   2.2%       3.9%      5.9%
Aug'07   4.5%       3.9%      2.6%
Sep'07   2.2%       3.9%    -14.5%


"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%
Mar'07   2.0%       1.4%      1.8%
Apr'07   9.9%       8.1%     -0.4%
May'07   6.2%       5.3%     -1.0%
Jun'07   2.9%      12.7%      2.3%
Jul'07   6.8%       6.8%     -0.8%
Aug'07  12.6%       6.8%      6.6%
Sep'07   7.2%       1.1%     -6.7%

Bottom Line:
It's all been said already.  Unit sales volume crashes, even more so than lately, to multi-year lows while median prices flirt with, and even exceed, all-time highs.  ...OK, maybe not so much with the "exceed all-time highs" the last few months.

Decide for yourself if "units" or "median" is telling the "truth."