Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Tuesday, April 25, 2006

Not Passing the Smell Test

I am calling big time bullshit” on NAR sales/inventory data. - Marin Real Estate Bubble is making the same call and so is Housing Bubble Blog & Bubbletrack

When NAR wants to minimize a number they report in month to month terms. When they want to maximize they report in YoY.

Meanwhile they have “seasonally adjusted” numbers on a regular basis prior to passing the crap to the public via their press releases. Then of course their numbers get "adjusted" again at a later date, and seem to keep changing the story they tell...

Further, they have revised the historical data back to 1989, obviously to make current trends look more to their liking, but they offer no details about the basis for those revisions.

I love this comment shamelessly stolen from the HousingBubbleBlog made by Robert Cote, blogger of Exurban Nation.

“A seasonally adjusted annual rate of xxxx million units.
NARspeak for “we made up a number because the real number is so scary.”'

NAR Data
"Sales of existing U.S. homes rose to a 6.92 million-unit rate in March from February's downwardly revised 6.90 million-unit pace, according to the National Association of Realtors."

“Total housing inventory levels rose 7.0 percent at the end of March to 3.19 million existing homes available for sale. The national median existing-home price for all housing types was $218,000 in March, up 7.4 percent from March 2005 when the median was $203,000."

"The pace of existing home sales in the United States picked up by 0.3 percent in March."

"I think this steadiness we've seen in the last two months can't be sustained because mortgage rates have risen further since," said David Lereah, the group's economist. "So I do see some more modest drops in home sales."

Reality Check:

I think David Lereah is getting closer to the truth in his statement above.

That being said, after inundating us with the Y-o-Y numbers on the way up, NAR is trying to totally ignore them on the way down.

Sales in March were up 0.3% from Feb, but were down 0.7% from March ‘05.

March median was 218k, and February median was also 218k…. no change.

This is down from the peak of 229k during the August of ‘05

The 7% increase in inventory was a monthly number.

The year over year increase in inventory was 39%.
3.05 = 2,297,000
3.06 = 3,194,000

Last month, the March 05 median price of existing homes on their website was: $193,000.

Now the revised number for March 2005 is $203,000. That’s quite a change, and to what do we owe this change?

NARs revised numbers still show declines, though they now portray a slightly less steep decline than their old numbers.

NAR revised data:
Median sales price, all existing homes:

march 2005: $203,000
april 2005: $214,000
may 2005: $217,000
june 2005: $229,000
july 2005: $228,000
august 2005: $229,000
sept 2005: $225,000
oct 2005: $229,000
nov 2005: $225,000
dec 2005: $222,000
jan 2006: $220,000
feb 2006: $218,000
mar 2006: $218,000

Enough about national data. If we are to believe that there is no national housing bubble, as the so called experts proclaim, then national numbers may serve no other purpose other than as interesting facts. It is much more important to look at state and local data.

The Californian Association of Realtors realeased March data. “The median price of an existing home in California increased 13 percent in March and sales decreased 15.1 percent
compared with the same period a year ago, the California Association of Realtors reported today. Inventory for existing, single-family detached homes in March 2006 was 4.8 months, compared with 2.2 months (revised) for the same period a year ago.”

Sonoma Valley MLS Inventory: 305

Sonoma Valley listing progression
2/14/06 = 172
2/14/06 = 183
2/24/06 = 193
2/25/06 = 200
2/27/06 = 214
3/01/06 = 219
3/04/06 = 220
3/12/06 = 230
3/20/06 = 236
3/26/06 = 238
4/03/06 = 268
4/19/06 = 291
4/25/06 = 305 at the current rate of sales = 10 months of inventory

67 new listings in 30 days

Sonoma County MLS Inventory: 2868

Sonoma County listings progression
3/20/06 = 1742
3/26/06 = 1766
4/03/06 = 1888
4/19/06 = 2828
4/25/06 = 2868 at the current rate of sales = 6.3 months of inventory

1102 new listings in 30 days

Sonoma County March Sales Facts:
Year-over-year home sales were off 14.5%. Condo sales were up 73.8% from February, down 34.8% compared to March 2005.

Median prices rose in March gaining 3.9%

The average price rose 11%.

Year-over-year the picture is different.

The median price was up only 0.8%.

It looks like the days of double-digit appreciation are over.

The number of homes pending has slumped, down 33%.

March Sales (units sold)
Sonoma County: 454 down -14.50%
Sonoma Valley: 30 down -38.60%

Bodega Bay: 4 down -55.60%
Cloverdale: 9 down -43.80%
Cotati: 4 down -20%
Forestville: 8 up 60%
Guerneville: 11 down -42.10%
Healdsburg: 14 down -17.60%
Petaluma: 56 down -22.20%
RP: 25 down 37.50%
Santa Rosa: 221 no change
Sebastopol: 21 down 12.50%
Windsor: 34 up 6.3%

Condo Sales
County: 73 down -34.80%
Rohnert Park: 17 down -37%
Santa Rosa: 34 down -45.2%
Sonoma: 8 (up from February which had 0 sales) up 33.3% though Sonoma's median price is down -24% and average price down -20.70%


At 4/26/2006 09:57:00 AM , Anonymous tom stone said...

thank you for the data athena,it is truly shameful that the data provided by the nar,and at times the feds reminds me of the soviet union in the 70's and 80's.once an organization gets known for lying it never recovers,i do wonder if we will see the end of realtors,tm,after this is over...

At 4/26/2006 10:02:00 AM , Blogger Athena said...

well at the very least I would like to see some changes to the commission structure and mls. Then of course a big spanking for those who were already deficient in the brains department or they would have already had a successful career who jumped into the profession thinking they could make some easy money. Then a little punishment for a few of the long timers that misplaced their ethics during the boom. a kick in the butt for them all. ;-)

At 4/26/2006 11:37:00 AM , Blogger Marinite said...

When NAR wants to minimize a number they report in month to month terms. When they want to maximize they report in YoY.

It's more like they use which ever (monthly or YoY) that best supports their "feel good" argument that they want to make. Bloggers predicted this behavior last year -- moving from YoY to monthly data. After 2006. the "strategy" of using monthly data won't work.

At 4/30/2006 02:59:00 PM , Blogger Mr. x said...

Excellent work Athena!

Keep it up.

WHo is compiling and posting this data for San Francisco County?


SF Renter

At 4/30/2006 03:17:00 PM , Blogger Athena said...

Thank you!

For SF- Try:

And also for good old fashioned smart people who can do research, talk deep economics and gather data try:

Most posting members are in the bay area.


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