Hello Everyone,
This is not the first time we have mentioned the quote about statistics attributed to Mark Twain, but the subject of this week's article compels us to make use of it again. The following excerpt from Wikipedia describes and encapsulates Twain's use of the phrase "Lies, damned lies, and statistics", though it reports that the origin of the quotation is disputed. See the full Wikipedia citation for an interesting read http://en.wikipedia.org/wiki/Lies,_damned_lies,_and_statistics
From Wikipedia, the free encyclopedia
"Lies, damned lies, and statistics" is a phrase describing the persuasive power of numbers, particularly the use of statistics to bolster weak arguments, and the tendency of people to disparage statistics that do not support their positions. It is also sometimes colloquially used to doubt statistics used to prove an opponent's point.
The term was popularised in the United States by Mark Twain (among others), who attributed it to the 19th-century British Prime Minister Benjamin Disraeli (1804–1881): "There are three kinds of lies: lies, damned lies, and statistics." However, the phrase is not found in any of Disraeli's works and the earliest known appearances were years after his death. Other coiners have therefore been proposed. The most plausible, given current evidence, is Englishman Sir Charles Wentworth Dilke (1843–1911).
Whatever the origin of the idea that statistics can be manipulated to support multiple positions, it is certainly a concept that is germane to the subject of this week's report.
Inventory has been building slowly but consistently for the last several weeks, for both Single Family Residences (SFR) and Condo's, and sales have been gaining momentum, particularly in Condo's and SFR's priced under $1million. 40.47% of MLS-listed SFR's under $1million were in contract as of March 15 even though overall SFR percentage in contract decreased about one and a half points, from 33.49% to 31.99%, largely on soft sales in the $1-3 million range. Sales of homes over $3million defied the trend, and actually increased from 7.59% in contract to 10.87% in contract. Overall days on market (DOM) for YTD sold SFR properties at 128 as of March 15. YTD SFR units sold as of 3.15.10 were 279, up 4.9% from the same period last year. This, all the more significant because of the artificial bump that sales received from the buyer tax incentives in the first half of 2010. Condo sales showing a similar, but even more pronounced trend, with percentage in contract of units under $1million at 35.25% and overall YTD condo unit sales of 96 up 14.3% from the 84 units sold in the same period last year.
We have mentioned a number of times in previous reports that in spite of percentages in contract that have historically been recognized as sellers' markets, sellers currently experience very limited ability to push the price envelope in this market climate. We have recognized for some time that the characterization of the market as "Buyers", "Sellers", etc. might bear some adjustment due to changes brought about by the large percentage of distressed sales in the Marin County real estate market, and we will try to explain why we feel that way. (Thank you, Mr. Twain)
During the period from January 1 to March 15, there were approximately 374 unit sales of SFR's and Condo's. The average sales price was $756,637, DOM were 134, and the average ratio of sales price to list price was 94.5%. Out of this total, approximately 147 units were what we would call "normal sales". Their combined average sales price was $981,132, DOM were 103, and the ratio of sales price to list price was about 93%. REO's, (real estate owned, or repossessions) accounted for approximately 65 units of the total. The average sales price of those units was $481,218, DOM were only 89, and the ratio of sales price to list price was 98.4%. Short sales accounted for approximately 36 units of the total. The average DOM were 243. Average sales price was $519,102, and the ratio of sales price to list price was 97%. There are several other sales segments that are not included here, so the examples listed do not add up to total YTD sales. But, from the examples it is easy to see that a characterization of the overall market does not necessarily represent a marketing prediction for any particular segment or specific home. What the overall view does do, if it is applied consistently over time, is show market movement and market trends. Consistency is normally considered a virtue, however, when conditions change, it is sometimes necessary to make adjustments. We believe that the abnormally long sale and escrow process for some types of distressed sales sales is inflating the percentage in contract to a significant degree. To characterize the market more accurately, we plan to adjust the percentages in contract that we use to describe the various kinds of markets. We will do this beginning with our next report, which marks the start of a new calendar quarter.
However we label the various segments, current market activity seems quite brisk, the atmosphere is upbeat, and the year ahead looks hopeful. We look forward to being able to continue to report to you on this positive note.
Until next time, wishing you all the best,
Fred
p.s. for access to spreadsheets, please see http://www.fredanlyan.com
Monday, March 21, 2011
Monday, March 7, 2011
The Anlyan Report. Marin County Real Estate 03.06.11
Hello Everyone,
Events in the Middle East had just about everyone guessing and the financial markets rocking and rolling this week. Gasoline again up around $4 a gallon. Dow Jones managed to eke out a small gain for the week after a dramatic drop on Tuesday, a big recovery on Thursday, and an unstable market on Friday with a triple-digit drop that was erased by the end of the day, leaving a .3% gain for the week. See Wall St Journal online:
http://online.wsj.com/article/SB10001424052748703300904576178612184267474.html
Freddie Mac, in a March 3 report, showed a current aveage rate for a 30 year fixed-rate mortgage (in the western region) of 4.83%, noting that this was the third week of improving mortgage rates. http://www.freddiemac.com/pmms/release.html
HSH.com, a financial publishing service, notes, in a February 25 article "That improvement is largely related to a flight-to-safety buy of Treasury bonds. Yields on ten-year US Treasuries (which influence fixed mortgage rates) have dropped by perhaps 20 basis points or so over that time, dragging mortgage rates in the same direction, if to a lesser degree." The article, referring to investors' reaction to the continued instability in the Middle East, goes on to say: "As long as the US remains the place to stash cash when these global events occur, at least some benefit will accrue to American mortgage seekers. However, these events and any benefits are of unpredictable duration, so folks actively engaged in the mortgage process would do well to move quickly to lock in rates and secure transactions." http://www.hsh.com/trends.html
Here in Marin County, there is quite a bit of encouraging real estate activity. One bit of news that looks disappointing at first but, upon further examination appears much more hopeful, is the spike in Days on Market (DOM) for sold properties. According to CB MarketQuest, average DOM for YTD sales of Single Family Residences (SFR) spiked from 117 in January to 160 in February. The numbers for Condo's were similar, 108 average DOM in January, jumping to 140 in February. In both cases, these numbers appear to represent the sale of properties that had been on the market for extended periods of time, significantly raising the average sales time when included with other recently sold properties. To understand this, we need to look at inventory levels, which remain persistently low due to many sellers' reluctance to place their properties on the market to compete with distressed sales that hold average prices down. In addition, the traditional spring sales period is still a few weeks in the future. According to MarketQuest, active inventory at the end of February was 552 units for SFR's and 212 for Condo's (differs from MLS figures due to how properties in contract are counted). For SFR's, this figure compares to 877 units in February of '10 and 935 in '09. For Condo's, the February '10 figure was 310 units and in '09, it was 329.
There has been a surge in buyer activity, with 244 accepted offers on SFR's and 87 on Condo's in February, both figures representing the largest numbers in over 2 years. This, according to MarketQuest's statistics, has resulted in a very low months supply of inventory (MSI) --- 5.5 for SFR's and 5.3 for Condo's. This attrition of inventory helps to explain the dramatically increased figures for DOM, as buyers with limited choices dig deep into the pool of older, unslold properties, and sellers with enhanced market awareness born of long experience make deals to put their properties in escrow. Please see attached SFR and Condo Market Action Reports for more numbers and details on the local market.
The popular City-by-City Analysis out this week shows 6 of 13 towns and cities covered as strong or very strong sellers' markets, with in excess of 35% of listed properties in contract.
Kentfield leading the pack, with an astonishing 47% in contract. Novato next in line with 41.73%, or 111 of 266 properties, and Corte Madera close behind, with 41.18%. Belvedere still at the bottom of the heap, but with a big improvement at 14.29% in contract compared to last month's 3.33%. Overall, 33.49% of SFR's and 32.6% of Condo's listed for sale on March 1 were in contract. (These figures from Marin County MLS). Sellers should be encouraged by these results but need to remain aware that this market is price sensitive and finely-balanced. Competition from distressed sales keeps a lid on prices, with, of course, exceptions for certain very special or unique properties. Lenders' appraisals continue to be very rigorous too. Not that unusual to see purchase prices adjusted downward following lender appraisal.
Locally, lots of agents looking forward to the spring market with anticipation. Professional REALTORS who know your market still the best source of information on your specific neighborhood.
More next time.
Until then, best wishes to all,
Fred
p.s. for access to spreadsheets see http://www.fredanlyan.com
Events in the Middle East had just about everyone guessing and the financial markets rocking and rolling this week. Gasoline again up around $4 a gallon. Dow Jones managed to eke out a small gain for the week after a dramatic drop on Tuesday, a big recovery on Thursday, and an unstable market on Friday with a triple-digit drop that was erased by the end of the day, leaving a .3% gain for the week. See Wall St Journal online:
http://online.wsj.com/article/SB10001424052748703300904576178612184267474.html
Freddie Mac, in a March 3 report, showed a current aveage rate for a 30 year fixed-rate mortgage (in the western region) of 4.83%, noting that this was the third week of improving mortgage rates. http://www.freddiemac.com/pmms/release.html
HSH.com, a financial publishing service, notes, in a February 25 article "That improvement is largely related to a flight-to-safety buy of Treasury bonds. Yields on ten-year US Treasuries (which influence fixed mortgage rates) have dropped by perhaps 20 basis points or so over that time, dragging mortgage rates in the same direction, if to a lesser degree." The article, referring to investors' reaction to the continued instability in the Middle East, goes on to say: "As long as the US remains the place to stash cash when these global events occur, at least some benefit will accrue to American mortgage seekers. However, these events and any benefits are of unpredictable duration, so folks actively engaged in the mortgage process would do well to move quickly to lock in rates and secure transactions." http://www.hsh.com/trends.html
Here in Marin County, there is quite a bit of encouraging real estate activity. One bit of news that looks disappointing at first but, upon further examination appears much more hopeful, is the spike in Days on Market (DOM) for sold properties. According to CB MarketQuest, average DOM for YTD sales of Single Family Residences (SFR) spiked from 117 in January to 160 in February. The numbers for Condo's were similar, 108 average DOM in January, jumping to 140 in February. In both cases, these numbers appear to represent the sale of properties that had been on the market for extended periods of time, significantly raising the average sales time when included with other recently sold properties. To understand this, we need to look at inventory levels, which remain persistently low due to many sellers' reluctance to place their properties on the market to compete with distressed sales that hold average prices down. In addition, the traditional spring sales period is still a few weeks in the future. According to MarketQuest, active inventory at the end of February was 552 units for SFR's and 212 for Condo's (differs from MLS figures due to how properties in contract are counted). For SFR's, this figure compares to 877 units in February of '10 and 935 in '09. For Condo's, the February '10 figure was 310 units and in '09, it was 329.
There has been a surge in buyer activity, with 244 accepted offers on SFR's and 87 on Condo's in February, both figures representing the largest numbers in over 2 years. This, according to MarketQuest's statistics, has resulted in a very low months supply of inventory (MSI) --- 5.5 for SFR's and 5.3 for Condo's. This attrition of inventory helps to explain the dramatically increased figures for DOM, as buyers with limited choices dig deep into the pool of older, unslold properties, and sellers with enhanced market awareness born of long experience make deals to put their properties in escrow. Please see attached SFR and Condo Market Action Reports for more numbers and details on the local market.
The popular City-by-City Analysis out this week shows 6 of 13 towns and cities covered as strong or very strong sellers' markets, with in excess of 35% of listed properties in contract.
Kentfield leading the pack, with an astonishing 47% in contract. Novato next in line with 41.73%, or 111 of 266 properties, and Corte Madera close behind, with 41.18%. Belvedere still at the bottom of the heap, but with a big improvement at 14.29% in contract compared to last month's 3.33%. Overall, 33.49% of SFR's and 32.6% of Condo's listed for sale on March 1 were in contract. (These figures from Marin County MLS). Sellers should be encouraged by these results but need to remain aware that this market is price sensitive and finely-balanced. Competition from distressed sales keeps a lid on prices, with, of course, exceptions for certain very special or unique properties. Lenders' appraisals continue to be very rigorous too. Not that unusual to see purchase prices adjusted downward following lender appraisal.
Locally, lots of agents looking forward to the spring market with anticipation. Professional REALTORS who know your market still the best source of information on your specific neighborhood.
More next time.
Until then, best wishes to all,
Fred
p.s. for access to spreadsheets see http://www.fredanlyan.com
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