The Last 30 Days (Dec'07 News!)

January 29, 2008

The Last 30 Days (Dec'07 News!)

Except for the concession, "sales drag along bottom," DataQuick's press release this month seemed completely routine. Nobody really paid much attention. However, DQ's headline touting year-over-year prices disguised some very "interesting" news embedded in their data.

As even short-term readers have heard us say time and again. house prices in Silicon Valley make most of their annual increases in the spring. Prices for 2007 were on target to break that mold --until you look past DQ's spin, dutifully parroted by local TV and radio foofs.

As usual, we insist on studying the data points reported in DQ's weekly table. Lo and behold, the price change reported by DQ from November 30 to December 31, 2007 was dramatic!

Thanks to significant last-minute price drops, results for 2007 did not break the trend!

Since 2003, prices showed a median change of in the second half of each year of:

2003: 0.0%
2004: +1.8%
2005: -0.7%
2006: -7.8% (= -$60.5K!!)
2007: -7.7% (= -$55K!!)

So how are prices doing lately?

Resale

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   -$30K
October    +$10K    +$5K    +$9K    -$2K +$11K
November     -0-    -0-     +$1K     +1K   +$13K
December     -0-   +$10K   -$15K   -$25K   -$60K!!!
Total      +$43K   +$90K   +$90K    +$5K   +$29K

Comparing YTD numbers for the last four years, we find

YTD thru 2003 2004 2005 2006 2007

Dec. +$47K +$137K +$90K +$5K +$29K

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

Resales 2003 2004 2005 2006 2007

December 1,902 1,681 1,401 1,167 684

YTD 20,373 22,734 20,355 15,299 11,007

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

Dec 1,902 1,681 1,401 1,167 684 -41% -51% -59%

YTD 20,373 22,734 20,355 15,299 11,007 -40% -46% -51%

Does anyone remember the press release mentioning sales volume was down over -40% y-o-y? Or over -50% y-o-2y?

Trying to look forward instead of back, below are DQ and Metro Listing Service (MLS) listings for Santa Clara County over the last two years:

As of...  DQ    Change     MLS#   Change     Diff.
Jan12'06 1,687                           (DQ vs.MLS)
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            +23%
Oct 5    3,389 +101%/YTD   3,899            +15%
Nov 7    3,070 +82%       3,496            +14%
Dec06'06 2,571 +52%       2,843            +11%
Jan09'07 1,969 +17%/y-o-y 2,554            +30%
Feb 8    2,238 +23%       2,901 +14%/YTD +30%
Mar 8    2,841 +50%       3,156 +24%      +11%
Apr 5    2,812 +28%       3,680 +44%      +31%
May 3    3,332 +28%       4,255 +67%      +28%
Jun 7    3,809 +28%       4,501 +76%      +18%
Jul 5    3,972 +25%       4,510 +77%      +14%
Aug 2    4,156 +23%       4,936 +93%      +19%
Sep 7    4,701 +33%       5,097 +21%/y-o-y +8%
Oct 11   4,866 +44%       5,222 +34%        +7%

Nov 8 4,780 +56% 5,123 +47% +7%

Nov 29 4,596 +79% 4,642 +63% +1%

Jan 10 4,145 +111% 4,699 +84% -12%

(MLS data is pulled within a day or two of creating this table.)

We recently added a column showing the difference between DQ's listing count and the corresponding MLS figure. We assume these figures are finally converging because, as sales get more and more difficult to close, various "tricks" used by real estate agents to artificially reduce the number of listings are abandoned.

Last month, for the first time since we started keeping track, DQ's y-o-y figure not only over 100% but MLS now admits to more listings than DQ.

Most interesting this month are the peak tables:

Peak Since

All Homes Current Peak Date Peak y-o-y

Santa Clara Co. $655K $714K Jun13'07 -8.3% -0.8%

San Mateo Co. $730K $820K Jun06'07 -11.0% 0.2%

Santa Cruz Co. $618K $735K May26'06 -15.9% -7.7%

Peak Since

Resale Homes Current Peak Date Peak y-o-y

Santa Clara Co $739K $817K Aug27'07 -9.5% 2.9%

San Mateo Co. $769K $925K Jun26'07 -16.9% -0.8%

Santa Cruz Co $663K $810K Aug20'07 -18.1% -6.7%

(San Mateo and Santa Cruz numbers are more volatile than Santa Clara County. They bounce, up and down, on lower volume, more than Santa Clara County.)

In the interest of shortening this missive, we planned to drop these y-o-y price charts. Then we noticed the sizes of this month's changes! Maybe we'll drop them next month. (Maybe there is demand for this data as a premium feature?)

"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%

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%
Oct'07   1.5%       2.6%     -1.5%

Nov'07 0.7% 4.1% 1.3%

Dec'07 -0.8% 0.2% -7.7%

"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%

Oct'07 6.0% 8.7% -5.6%

Nov'07 8.8% 8.0% 1.3%

Dec'07 2.9% -0.8% -6.7%

Bottom Line:
The moment of truth may finally be at hand. Realtors concede sales volume is the lowest since ~1995. (In case you think 1995 is a random date, please see our previous missive on Santa Clara County "residents employed" in 1995. "Spinning the Stats," http://www.viewfromsiliconvalley.com/id391.html )

Nowhere did we see a report mentioning December's -$60K price decline for "resale homes" in Santa Clara County! (In case you're wondering the "All Homes" figure was -$23K.) This was the largest single-month decline in our five years of tracking!

If you're wondering, a $720K "resale homes" was last seen February, 2007. If asked to put a date to the moment when low-end house house sales dropped so badly that it started to actively distort the median price, February, 2007 figures to be a strong candidate.