Tuesday, April 15, 2008

March RMLS Data and Analysis

The March RMLS data was released this week and it's not as bad as I expected. A big thank you goes out to Chris at Johnson Gardner for help with the analysis. I thought I was a good analyst, but Chris is better. Click on any of the chart to enlarge them. On to the charts!

The median price in March was basically flat, up only 0.6% Year over Year, and up 2.7% from February. Year over year growth has basically been flat for three months now.

Inventory as measured by the absolute number of homes on the market rose again in March for the third straight month, nearing 15,900 units. So while inventory in terms of months has fallen since January as a result of a more accelerated (seasonal) sales pace, the total number of sellers on the market has increased. In other words, the rate of sales in the first quarter has yet to keep pace with new additions to the market. The rate of sales is down 39.1%, and I believe that the lack of buyers will eventually drive down prices.

The affordability measure in the metro area fell in March for the second straight month. This was partially the impact of a monthly increase and median prices [$280,000 in (Feb 08) vs. $286,500 (Mar 08] and a slight uptick in the average 30-year FRM.

The results of this figure are deceiving. This chart calculates the spread of listing to sales prices in an attempt to measure seller optimism (or reality). While the results for March indicate a narrowing spread, this was the result of a higher sales price and stagnate listing prices. This would indicate that on average--at least in March, that buyers came back to the sellers in terms of price and not vice versa.

Chris also added a couple cool new charts and some more detailed analysis this month.

This is a cool visual that scatter plots all sales under $1,000,000 by price and sq. ft. The trendlines would indicate that prices have in fact remained roughly consistent year over year.

This chart shows the distribution of sales by price cohort. Using $300,000 as a benchmark there was a slight 1.1% shift toward higher priced homes (Above $300,000) obviously accounting for the modest uptick in median price.

This chart displays the year-over-year change in sales pace by price point. This chart allows us to measure which cohorts of the market are seeing the biggest slowdown. The 56% decrease in homes below $150,000, and to a certain extent $200,000 to $300,000 is an indication of marginal or first time buyers either waiting it out or failing to get financing.

A summary of market activity by product type. (Note from Chris: Note that RMLS issued a section on condo appreciation that listed an average condo sales price of $336,500 for March 2008. I am fairly certain this is a miscalculation). Not how the average sales price in the market is no longer increasing. In my opinion this would suggest that tightening in terms of pricing is starting to occur.

This data differs from the data reported in the RMLS Market Action. The RMLS likes to report the last 12 months vs the previous 12 months, and based on this methodology it appears that the average price is still increasing. I believe our method here is more accurate, and more clearly shows changes in growth, both up or down.

It shows inventory in terms of months (using the Realtors calculation) by price point. Good luck selling your $600,000+ home.

This chart shows median sales price and sales pace by subregion. Next month we'll get to year over year changes.

Again a big thanks to Chris for all this analysis.


Anonymous said...

I remember a time when people just bought houses. They didn't graph every little detail looking for some sign or indication that it was time to buy or not. Even after you buy there's little joy for anyone as they worry about whether they paid too much, that their "investment" may lose value, that they are stretched to pay for it. Everyone I know who has bought in the last 5 years does nothing but complain about how much they're paying to purchase and maintain their dwelling.

God, this culture sucks.

Ralph said...

Thank you. The extra data provided by Chris is very insightful. This is the type of data I have been looking for, I'm glad someone has got their hands on it and is doing something useful with it.

PDXOutsider said...

"Everyone I know who has bought in the last 5 years does nothing but complain about how much they're paying to purchase and maintain their dwelling."

And so I say this is exactly why we need this kind of information, and lord knows we can't rely on the real estate industry to give us the straight scoop.

I miss the old days where people just scraped and saved for a few years, then bought the best house they could find in what they thought was the best neighborhood for them.

But with the rampant increase in speculation earlier this decade, and the flood of funny money that enabled people who should have never owned a home to become owners (although you're really not an owner if you have no skin in the game), its' become more important than ever to make sure you do your due diligence before buying a house. The days when you could be safe in the assumption that your house would appreciate at 3-5% are year are gone.

Given the bubble's burst it's more important than ever to pay attention to which areas might be overpriced, and to make sure you're only buying if you plan to be in the house long enough to ride out a downturn.

"God, this culture sucks."

You don't believe that people just started worrying about how much they paid for a house, do you? It's the biggest purchase most people will ever make (not biggest investment, your home is not an investment!), so of course you're going to worry about it. We're just hearing more about it lately given the increased media attention.

Anonymous said...

The hysteria is new. It's the same hysteria that accompanies all financial situations in this pisspoor culture. Education, housing, healthcare, etc, all infected with the effects of the market culture.

You might be too young to remember a time when it wasn't this way.

juliestreeted said...

Hey PDX, thanks for the info. I do appreciate it though I also believe it's a bit of information overload. 11 graphs showing mixed data. Even one graph showing "deceiving" information.

I believe the data is interpreted and used by buyers and sellers, in conjunction of their own personal situation, to justify whatever actions they take.

I appreciate your blog and reader's input very much. At the same time, with these graphs, could you state clearly the state of the Portland real estate market, other than to say there is much confusing data to review? Or maybe it's still location, location, location?

As an agent I'm constantly asked to interpret this kind of data and somehow come up with a concise state of the market report.

juliestreeted said...

Hi PDX, I'm a realtor and I'm too lazy to analyze the data myself.

Can you do more work for me for free?

As an agent I'm constantly asked to interpret this kind of data and somehow come up with a concise state of the market report.

Sure I’m a Realtor and I get paid to do this but I'd rather have you do it for me.

Tootles!!! I'm off to Wal-Mart in my SUV then I'll study for the GED exam tonight.

juliestreeted said...

I really don't need PDX outsider to decifer any of the information for me. But it would be nice if someone could do it for free for me.

Sarcasm aside PDX Outsider, do you wish to have different views on your blog? Or should I have not entered this playroom?

Anonymous said...

Differing views should always be the goal for a blog in my opinion. Intelligent discussion inspires insightful thought.

Anonymous said...

That's what happens when you use an identity. People can start using it.

Why I always post as anonymous now.

Anonymous said...

For the benefit of ms. street, here's my short and simple interpretation of the data:

Sales are stagnating (look at the inventory numbers). Sellers are not dropping their prices enough to engage buyers (look at the change in sale prices).

It doesn't take a statistician to be able to read these numbers and put them together with anecdotal observations to arrive at their meaning: either sell at lower prices of sit on the market a long time.

The data may be confusing for those who can't reconcile the numbers (reality) with wishful thinking. This reminds me of the debates about climate change: some who will argue that the data is inconclusive so long as the data doesn't support the desired world view. This may be another small inconvenient truth.

PDXOutsider said...

"That's what happens when you use an identity. People can start using it.

Why I always post as anonymous now."

actually, if you sign up for a blogger identity, it's obvious who you are. you can do it and still remain anonymous. once you get too many anonymous comments it gets pretty muddy.

PDXOutsider said...

juliestreeted said...

"I really don't need PDX outsider to decifer any of the information for me. But it would be nice if someone could do it for free for me.

Sarcasm aside PDX Outsider, do you wish to have different views on your blog? Or should I have not entered this playroom?"

first off yes, i do want different views on the blog. ignore the taunts from anonymous posters. as i've stated before i'm all for arguing and attacking facts and opinions, less for just mean/nasty comments.

it took long enough to just post these charts that i ran out to steam on the analysis, so i'll go back and do a writeup.

but in a nutshell, sales are down everywhere, but in desirable areas prices are holding up, most likely due to buyers with good credit and cash in the bank. but i believe that the increase in inventory, increase in foreclosures and reductions in sales will lead to price decreases especially for those sellers who need to sell (lost job, 2 mortgages, moved out of state, etc).

lack of entry level buyers make it harder to trade up, the ripple effects will eventually take hold.

Anonymous said...

I registered my screen when I was posting over at the Portland Housing Blog because someone was using it to make me look bad. That made the name hyper-linked so others would know it was the "real" me and not an imposter.

Then my names showed up hyperlinked AND being used by someone else. The name was hyper-linked to a gay porn site, too. I emailed Clint about it and he said there was nothing he could do about it.

Then it dawned on me that Clint was the one using my name. He hated my posts because he felt they were too political and anti-conservative and had complained about them before. So I suspect it was him that used my named and linked it to porn since he would be the only one with that capability.

My suspicions were confirmed when he began blocking me from his site. When I try to go there I end up at the same gay porn site that my screen name had been linked to. Coincidence? I don't think so.

Then I tried to access the site from work and it gave me a browser virus that kept opening up gay porn site windows. I got really mad and began trying to expose him over on his blog and that's when he went to Haloscan. I'm able to penetrate his system through proxy servers and tell people what a slimeball he is to have done all that.

I don't see you as the type of person to do that kind of thing but after all that stuff due to Clint I prefer to stay anonymous.

He couldn't ban me outright simply for stating political opinions related to housing that he didn't like so he took matters to a whole other level. I'm trying to get a hold of someone at Blogger to tell them how he used my registered name and linked one of their hosted blogs to a porn site. I want to take him down.

Anonymous said...

I think PDX OUtsider has provided an important resource and we all should thank him.

I agree, it is sad that we have to all become 'economists' w/ respect to buying a home but don't blame this on 'the people' or 'the culture.' This is a situation that is governed by central banks and governments. The banking consolidation, hedge funds, monetary policy, globalization, mortgage backed securitization, risk-mitigation, etc. have all played a part in creating more market risk. This means that while there is a chance for significant appreciation, there is also terrible downside risk. The home price volatility has like buying a VERY expensive stock on margin. We all know what 1929 brought us.

The point is this: the economic forces that drive sales and commissions want you to believe a very specific picture of the world. And this source is an attempt to crowd-source the truth from the mind-control drivel that industry puts out.

If we are to buy homes + be expected to pay income taxes based on the selling prices -- not their ACTUAL prices, then we need to be armed with facts. Now if the US Fed Govt and state govts wanted to give buyers a break and repeg their prop taxes to the downside pricing, maybe we'd all be more willing to buy at current prices. But there simply is so much at stake that one needs a sober, indpt resource.

Keep up the good work!