Buyers are all in the same boat
San Diego buyers are all riding the market currents in the same boat – A glass-bottom boat. I continue to see the majority of the would-be buyers with eyes focused south, waiting to see the bottom. For so many, only when they sense the floor is near will they toss their line into the real estate waters.
Jim the Realtor introduced his fourth-quarter contest this morning to see who could come closest to estimating 2007 4th quarter sales. This was my inspiration for sharing some of what I believe are the most telling housing trend statistics for our market.
This graph, data courtesy of the Sandicor Multiple Listing Service through 9/28/07, shows the number of homes sold by quarter dating back to the beginning of 2005. Remember, Summer of 2005 was roughly the peak in our previously robust local housing market.
Now, compare this with the LISTING trends for the past two quarters (from Altos Research). This chart reflects average listing price per square foot in San Diego for the past two quarters of 2007.
Does anyone else see a disconnect? If you are a seller, wishing it to be true (that you will get “your” price, whether it is what you want, what you need, or what your neighbor sold for last year, last month or last week) will not make it so. For the number of sales to increase, one of two things has to happen. Either buyers need to suddenly find themselves willing to pay the “yesterday’s prices” that sellers are asking, or sellers need to make their pricing more attractive. If you answered “b”, you are correct.
You can (you need to) stage your property all day long, but there are lots of fish down there, and the buyers are looking for the ones nearest the bottom. Sellers who don’t recognize this pretty quickly may themselves become another statistic.
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