statsWhy market statistics?

The factors of supply and demand control prices
Real Options Realty is a recognized source for the interpretation of residential market statistics in Santa Cruz County. We are often quoted by the media.

Knowing market statistics can help you make informed decisions, because the factors of supply and demand control prices. Now you have access to this information anytime.

 

Residential Market Statistical Graphs and Explanations

Number of Listings

The Number of Listings shows the supply, or how many properties are for sale. Is the inventory of listings increasing or decreasing, and is it seasonal?

Number of Sales

The Number of Sales shows the demand, or how many properties closed escrow. Is the number of sales increasing or decreasing?

Unsold Inventory Index

The Unsold Inventory Index is the most important predictor of future price movement. It is the inventory of properties expressed in time, or the current relationship between supply and demand. For example, if there is a 6 – 8 month supply of houses on the market, prices are stable. If there is only a 4 month supply, prices usually increase. If there is a 10 month supply, prices usually decrease.

Median Price

The Median Price shows the price at which there were an equal number of sales higher than or lower than that price. Have prices been increasing, decreasing, and how fast?

Average Price

The Average Price shows the sum of all sales prices divided by the number of sales. Have prices been increasing, decreasing, and how fast?

  • January 2020:  As of the first week in January, there were 248 listings, down 20% from 311 listings one year ago at this time. While 15 of the last 17 months showed an increase over the same month one year previously, very low mortgage interest rates contributed to the surge in sales at the end of 2019, reducing the number of listings (December SFR sales were 38% higher than December 2018 sales).

    75 of the 248 listings are under contract, and just 173 are active listings. 90 of the 173 active listings (52%) are priced over $1Million, and only 83 are priced under $1Million.

    BACKGROUND: The number of properties for sale is seasonal. Each year, December and January have the fewest number of homes for sale, because people don’t like to show their homes during the holiday season. And each year, the highest number of homes for sale is in the summer, because it is more convenient to sell your home in the summer. Note this repeating annual pattern in the above graph.

     

  • January 2020:  There were 80 listings as of the first week in January, down 19% from 99 listings the first week of January 2019. Additionally, 15 of the 80 listings are under contract, leaving just 65 active listings.

    BACKGROUND: The number of properties for sale is seasonal. Each year, December and January have the fewest number of properties for sale, because people don’t like to show their homes during the holiday season. And each year, the highest number of homes for sale is in the summer, because it is more convenient to sell your home in the summer. Note this repeating annual pattern in the above graph.

    The condo/townhouse graphs do not show as smooth a transition from month to month as the house graphs. This is because there are far fewer condo and townhouse sales in Santa Cruz County than house sales. In the field of statistics, a larger quantity of numbers makes a better statistic.

  • January 2020:  There were 152 sales in December, up 38% from 110 sales in December 2018. With the exception of one other month (September 2019), the number of sales had decreased for the preceding 15 consecutive months, when compared to the same month one year previously. Very low mortgage interest rates contributed to the surge in sales at the end of 2019.

    Sales are seasonal, with more during the summer than the winter. Note this pattern in the 3-year graph above.

    BACKGROUND: A sale, in this context, means a close of escrow. July sales mean houses that closed escrow in July, but probably went under contract in May or June. The number of sales is seasonal. Each year, January and February have the fewest number sales, because people are usually too busy to shop for homes during November and December. The highest number of sales is in June or July, because more buyers shop for homes in the summer. Note this repeating annual pattern in the above graph.

     

     

  • January 2020:  There were 39 sales of condominiums and townhouses in December, up 77% from 22 sales in December 2018.  Very low mortgage interest rates contributed to the surge in sales at the end of 2019. There were no bank-owned or short sales in December.

    BACKGROUND: The number of sales is seasonal. Each year, January and February have the fewest number sales, because people are usually too busy to shop for homes during November and December. The highest number of sales is in June or July, because more buyers shop for homes in the summer. Note this repeating annual pattern in the above graph.

    The condo/townhouse graphs do not show as smooth a transition from month to month as the house graphs. This is because there are far fewer condo and townhouse sales in Santa Cruz County than house sales. In the field of statistics, a larger quantity of numbers makes a better statistic.

    A >sale’, in this context, means a close of escrow. July sales mean condominiums that closed escrow in July, but probably went under contract in May or June.

     

  • January 2020:  The December Unsold Inventory Index was 1.6 months, down from 2.8 months in December 2018. With the exception of one other month (September 2019), the Index had increased for the preceding 14 consecutive months, when compared to the same month one year previously.

    BACKGROUND: The Unsold Inventory Index is the most important statistic used to predict value increases or decreases. It is the current relationship of supply and demand for the housing market. The index is created by dividing the current supply (number of listings) by the current demand (number of sales). The result shows the time it would take to deplete the inventory of houses for sale at the current sales rate. It is expressed in months.

    Years of statistical analysis have shown that a 6 ‑ 8 month unsold inventory index has been normal‑ meaning the market is balanced, and home prices are stable. Historically, when the Index has been less than 6 months, prices can increase, and when it is more than 8 months, prices can decrease. The further away from normal the index is, the stronger the influence on price movement.

     

     

  • January 2020:  The Unsold Inventory Index in December was 2.1 months. A year ago, in December 2018, it was 4.5 months. When compared to the same month one year previously, it decreased only five other times in the past 17 months.

    BACKGROUND: The Unsold Inventory Index is the most important statistic used to predict value increases or decreases. It is the current relationship of supply and demand for the housing market. The index is created by dividing the current supply (number of listings) by the current demand (number of sales). The result shows the time it would take to deplete the inventory of condos for sale at the current sales rate. It is expressed in months.

    Years of statistical analysis have shown that a 6 ‑ 8 month inventory index is normal‑ meaning the market is balanced, and home prices are not increasing or decreasing. When there is less than a 6 month supply, prices can increase. The further away from normal the index is, the faster the price changes can occur.

     

     

  • January 2020:  The median sales price for single family homes in December was $895,000, the third consecutive monthly increase. One year ago, in December 2018, the median price was $926,000 (the median price was over $900,000 for 14 of 16 months, from March 2018 through June 2019).

    60 of the 152 sales, or 39%, sold for more than $1Million. The more affordable areas of San Lorenzo Valley and Watsonville had 30 sales, or 20% of the total. These numbers show how the mix of sales influences the overall median price (midpoint of sales prices) each month.

    There were two bank-owned sales, and no short sales in December.

    Sales over $1,000,000:

    December: 39% of the sales (Overall median was $895,000)
    November: 35% of the sales (Overall median was $889,500)
    October: 35% of the sales (Overall median was $867,000)
    September: 31% of the sales (Overall median was $815,000)
    August: 34% of the sales (Overall median was $877,000)
    July: 40% of the sales (Overall median was $899,000)
    June: 43% of the sales (Overall median was $919,500)
    May: 43% of the sales (Overall median was $925,000)
    April: 47% of the sales (Overall median was $965,000)
    March: 37% of the sales (Overall median was $925,000)
    February: 40% of the sales (Overall median was $937,000)
    January: 36% of the sales (Overall median was $826,000)

    BACKGROUND: People who keep statistics argue whether the median price or the average price is a better indicator. The average price is calculated by totaling the sales prices and dividing by the number of sales. The median price is that price where an equal number of sales occurred at a higher price and a lower price than the median.

     

  • January 2020:  The median sales price for condominiums and townhouses in December was $600,000. A year ago, in December 2018, it was $599,500. The median price for condominiums and townhouses is generally less consistent because of the relatively small number of sales.

    A year ago, in November 2018, it was $637,000. The median price for condominiums and townhouses is generally less consistent because of the relatively small number of sales.

    BACKGROUND:   The condo/townhouse graphs do not show as smooth a transition from month to month as the house graphs. This is because there are far fewer condo and townhouse sales in Santa Cruz County than house sales. In the field of statistics, a larger quantity of numbers makes a better statistic. Here, we are working with very few numbers (25 to 75 sales per month). Occasionally, a few very expensive condos sell in the same month, and the graph takes a jump that month.

    People who keep statistics argue whether the median price or the average price is a better indicator. The average price is calculated by totaling the sales prices and dividing by the number of sales. The median price is that price where an equal number of sales occurred at a higher price and a lower price than the median.

     

  • January 2020:  The average sales price for single family homes in December was $1,041,646. Like the median price, the average price has increased for the last three consecutive months. A year ago, in December 2018, it was $1,132,420 (an all-time high).

    In Santa Cruz County, we have a few very expensive homes, such as those fronting Monterey Bay. Because of that, the average price tends to be a higher number than the median price here.

    BACKGROUND: People who keep statistics argue whether the median price or the average price is a better indicator. The average price is calculated by totaling the sales prices and dividing by the number of sales. The median price is that price where an equal number of sales occurred at a higher price and a lower price than the median.

     

  • January 2020:  The average sales price for condominiums and townhouses in December was $590,618. A year ago, in December 2018, it was $609,905. The average price for condominiums and townhouses is generally less consistent because of the relatively small number of sales.

    BACKGROUND: The condo/townhouse graphs do not show as smooth a transition from month to month as the house graphs. This is because there are far fewer condo and townhouse sales in Santa Cruz County than house sales. In the field of statistics, a larger quantity of numbers makes a better statistic. Here, we are working with very few numbers (25 to 75 sales per month). Occasionally, a few very expensive condominiums sell in the same month, and the graph takes a jump up in that month.

    People who keep statistics argue whether the median price or the average price is a better indicator. The average price is calculated by totaling the sales prices and dividing by the number of sales. The median price is that price where an equal number of sales occurred at a higher price and a lower price than the median.