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The Last 30 Days (Mar'08 Data)
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April 25, 2008 
 
The Last 30 Days (Mar'08 Data) 
 
(c) copyright View from Silicon Valley, 2008.  All rights reserved. 
 
 
 
House prices in Silicon Valley make most of their annual increases in the spring.
 
Until recently, we expressed this information as follows:
2H03:   0.0%
2H04: +1.8%
2H05:  -0.7%
2H06:  -7.8%  (= -$60.5K!!)
2H07:  -7.7%  (= -$55K!!)
2H08:   tbd
 
Starting in 2008, we refined this data to:
 
      Feb-Jun  Balance Chg%
2003:  +$37K     -$4K
2004: +$126K    -$18K
2005:  +$95K     -$5K  -0.7%
2006:  +$65K    -$56K  -7.8%
2007:  +$81K    -$52K  -7.7% 
2008: -$5.5K!  -$47K  -7.1%  (= -$52.5K YTD)
 
On balance, sellers make their profits (or buyers paid the most premium) off buyers in the February through June selling season.  Outside of those months, even during a once-in-two-generations-price-blow-off year, prices fell.
 
Our usual historic chart, it looks like this:
 
Resale 
Median 2003   2004   2005   2006   2007   2008 
Jan    -$4K  -$47K    -0-   +$5K   -0-   -$47K
Feb_   +$7K  +$52K  +$22K  +$17K  +$39K  +$24K
Mar   -$10K  +$39K  +$33K  +$13K   +$6K  -$29.5K
Apr   +$15K  +$11K  +$17K  -$10K  +$48K
May    -$4K  +$15K   +$8K  +$30K   -$9K
Jun   +$29K   +$9K  +$15K  +$15K   -$3K
Jul   -$24K   -$9K   -$5K  -$20K  +$15K
Aug   +$17K   -0-   +$14K  -$25K   -$1K
Sep  _ -$3K   +$5K   -$9K  +$10K  -$30K
Oct   +$10K   +$5K   +$9K   -$2K  +$11K
Nov   _ -0-   -0-    +$1K    +1K  +$13K
Dec    _-0-  +$10K  -$15K  -$25K -$60K!
Tot   +$33K  +$90K  +$90K   +$9K  +$29K 
 
Netting this out to YTD price changes shows:
 
YTD  2003   2004   2005   2006   2007   2008  
Mar  -$7K  +$44K  +$55K  +$35K  +$45K  -$52.5K
Next, let's peek at YTD volume:
 
Resales '03   2004   2005   2006   2007   2008  
Mar   1,365  1,912  1,862  1,592  1,239    777
YTD   4,029  4,870  4,347  3,524  3,243  1,938
 
We predict this is the year people spending their own money, as opposed the real estate and political foofs advocating the spending of someone else's, will starting wondering if it is time to buy. 
 
We submit the relevant comparison year is 2004.  In our estimation, early-2004 was when the Kool-aid of low rates and "sure thing" trumped common sense and the laws of economics.
 
As long as prices remain above early-2004 levels, we submit they're still artificially inflated. 
 
In addition to "year-over-year" (y-o-y) and "year-over-two-years-ago"  ("y-o-2" ), lets start using "year-over-four-years-ago" or  ("y-o-4") .  Conveniently, this nets us a comparison to 2004 sales: 
 
Resale
Units 2003   2004   2005   2006  2007_ 2008_y-o-y y-o-2 y-o-4 
Mar  1,365  1,912  1,862  1,592 1,239   777 -37%  -51%  -59%
 
Part of the rationale for ignoring y-o-y (and even y-o-2y and y-o-4y) volume is the claim there aren't enough properties for sale.
 
Fortunately, we have data on this very subject:
 
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%       +13%
Feb 7    4,529 +102%       5,008  +73%       +11%
Mar 6    4,815  +69%       5,694  +73%       +18%
Apr 10   5,408  +92%       6,144  +67%       +14%
 
MLS data is pulled within a day or two of creating this table (meaning the MLS "as of" date tends to be a few days later than DQ's).
 
Did you know resale home prices, even in Santa Clara County, are down a double-digit percentage since their June, 2007 peak?  (Less than 10 months ago?!) 
 
                                 Peak    Since 
All Homes     Current  Peak    Date     Peak   y-o-y 
Santa Clara Co. $620K   $714K  Jun13'07 -13.2%   -9.2%
San Mateo Co.   $723K   $820K  Jun06'07 -11.8%   -4.2%
Santa Cruz Co. *$560K   $735K  May26'06 -23.8%  -17.0%
 
                                 Peak    Since 
Resale Homes  Current  Peak    Date     Peak   y-o-y 
Santa Clara Co *$716.5K $817K  Aug27'07 -12.3%   -3.2%
San Mateo Co.  *$825K   $925K  Jun26'07 -10.8%   -0.4% 
Santa Cruz Co  *$621K   $810K  Aug20'07 -23.3%  -16.1% 
 
* = as of March 27
 
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.
 
In the interest of brevity, we dropped the rolling y-o-y price charts.  (Please let us know if you would still like to see them?)
 
Bottom Line:
As always, buy at your own risk.  If you decide to take the plunge, please feel free to share with us the (financial, and emotional) details?
 
(Still) coming soon:  A review of the cost to rent vs. own on several properties up for rent this spring.
The above commentary and any linked article, website and advertisement are for entertainment purposes only.  Nothing in this page or web site is intended as advice to buy, sell or hold any stock, bond, real estate nor any other financial product or service. Buy or sell at your own risk.