I kind of like the new logo for our periodic market updates. We aren’t fighting crime, mind you. In fact I probably should have gone with more of a Dragnet theme (”Just the facts”), and the “man” part is a little misleading until I can shame Steve into making a cameo blog appearance, but I think it is snappy nonetheless.
We are running a little late due to the Labor Day weekend, but our housing sale statistics on the website are now up to date. We track six zip codes and the San Diego region as a whole, but I always pay special attention to Scripps Ranch (duh) where we have seen a dismal eighteen sales record since August 1st.
This is the kind of news that makes hyper-local agents shutter, given that there are enough licensed agents living and working in Scripps Ranch to fill the cheap seats at Qualcomm Stadium, which is why I eyed this morning’s news that City leaders are at least entertaining the idea of selling naming rights to our new City Hall as a potential opportunity. I suggested the “Kris & Steve Berg City of San Diego,” while Steve thought “City of San Diego Castles” dovetailed nicely with our brand. We are still brainstorming. Either way, I find the keyword potential very exciting.
And speaking of stats (which I sort of was at the beginning), here are a couple of year in review charts for Scripps Ranch and for our coastal cousin, Carmel Valley. This data is for detached homes and, as always, compliments of Altos Research.
And, so, we continue to chug along the bottom. As soon as the hoards of buyers I see floating around out there can start getting financing again, we just may start to turn the corner.
What fun that was for a Thursday!
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Jim
09.04.08 at 9:51 am
Kris,
Does this definition of Market Action Index work here?
\”The Market Action Index answers the question \”How\’s the Market?\” By measuring the current rate of sale versus the amount of the inventory. Index above 30 implies Seller\’s Market conditions. Below 30, conditions favor the buyer.\”
(Taken from http://westofthefive.files.wordpress.com/2008/02/coronado92118.pdf)
…and if that is correct, Why is Carmel Valley getting closer to a seller\’s market than Scripps Ranch? What must we change in Scripps?
Jim
09.04.08 at 9:53 am
Apparently, I shouldn’t use double quotes unless I want them to be mangled with escape characters when stored. Oh well.
Kris Berg
09.04.08 at 10:28 am
Jim - Your definition of Market Action Index is spot on. I probably should have explained that in the post myself.
As for the corollary question, I will have to chew on that one as I head off to an appointment.
Steve Berg
09.04.08 at 1:51 pm
Jim and Kris - Is it me or am I reading these charts wrong (again)? It looks to me that Scripps Ranch market action index is almost the same as Carmel Valley, yet the median inventory in Scripps is much lower than CV. This would appear to suggest that Scripps is more closely approaching the sellers market. Bottom line - We have several qualified buyers who want in Scripps and just can’t find the right home yet. With only 99 active listings (detached) we are hovering around only 1% of the of the total inventory. Even at our low year-to-date sales average of approx. 20 closed escrows per month, that’s only a five month absorbtion period. Technically this is a sellers market. So why doesn’t it feel that way? Very strange…
Jim
09.04.08 at 2:14 pm
Steve, I think you’ve got it right, and I was off earlier. Ooops - that’s why you guys are the realtors, and I’m just a SR resident with an interest in keeping up to date on too many topics.
It would be easier to see that 92131 and 92130 have similar Market Action Indexes if the left hand axis were the same — they both appear to be sloping upward and currently around “19″.
Also the inventory counts on the same scale would be, perhaps, more interesting - while the curves between SR & CV are similar, the CV number is much higher, and their peak came a bit later. Perhaps those in SR that wanted to sell knew they wanted to sell, and so got out of the gates in time for summer, and those in CV were just jumping in to see what offer might find them as they saw their neighbors go? Both charts show the number of homes on the market going down, likely due to the typical third quarter issues brought up earlier this week.
Jakob
09.04.08 at 2:32 pm
Love the stats posts, Kris, however I’ve always found the Altos data unsatisfying. I would much rather see a simple “months of inventory” rather than this strange MAI thing. Months of inventory would be more elucidating.
And I’m puzzled by the term “median inventory”. Inventory is number of homes for sale, right? What’s median about it.
Kris Berg
09.04.08 at 5:39 pm
Good comment, Jakob. I will try to get Mike Simonsen from Altos over to explain it. I think the genesis is probably that these stats are snap snots, taken one day each week. Stand by.
Mike from Altos
09.04.08 at 6:04 pm
Hi Kris and Jakob -
Those are very insightful questions. Let me see if I can be thoughtful in the answers:
First our MAI - We use the Market Action Index because it gives an opportunity to visualize market quality on more data than a crude “months of inventory” measurement. For example, we can take into account not just the sales rates, but what percentage of homes are having price reductions. That is, every home can sell if you price it low enough, so adding this aspect is very telling when understanding demand levels. Additionally, Months of Inventory is a seriously lagging number - especially in this market where financing falls through or buyers get cold feet after offers - you may not know actual sales rates for several months after the fact. The downside is, as you point out Jakob, that the MAI isn’t a well known standard and you have to learn what it means.
As for “median inventory”, you’re absolutely right. I confess that this label is a silly artifact of our charting system. It isn’t median anything, it’s just a number, the label should be simply “inventory”. Shame on us for not changing it sooner.
Tara Jacobsen
09.06.08 at 4:56 am
Hey Kris,
For those of us who are just weird about reading stuff that has no relevance to our lives - which zip is which city? Thanks! Tara
Kris Berg
09.06.08 at 6:18 am
Oops! Carmel Valley is a community of San Diego (92130) located near the coast just east of the city of Del Mar. Scripps Ranch (92131) is also a San Diego community and is located inland near the Miramar Marine Corps Air Station along the I-15 corridor.