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?

  • May 2020:  As of the first week in May, there were 369 listings, down 20% from 464 listings one year ago at this time. Even though Realtors could begin showing seller occupied homes on May 1 (previously only completely vacant homes), there are still some would-be-sellers who are hesitating because of fear of getting COVID-19.

    89 of the 369 listings are under contract, and just 280 are active listings. 160 of the 280 active listings (55%) are priced over $1Million, and only 120 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.

     

  • May 2020:  There were 121 listings as of the first week in May, up from 110 listings the first week of May 2019. Additionally, 33 of the 121 listings are under contract, leaving just 88 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.

  • May 2020:  NOTE: About half of the April sales (51%) had a purchase contract signed prior to the Shelter In Place order on March 16; 49% were signed after.

    There were only 90 sales in April, sharply down 37% from 143 sales in April 2019, and accounting for the fewest April sales in at least 25 years. That is also 20% fewer sales than April 2008, after the Great Recession had begun.

    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.

     

     

  • May 2020:  NOTE: All but six of the April sales had a signed purchase contract prior to the Shelter In Place order on March 16.

    There were 25 sales of condominiums and townhouses in April, sharply down 44% from 45 sales in April 2019. This is the fewest number of April sales since April 2008, after the Great Recession had begun.

    There were no bank-owned sales or short sales in April.

    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.

     

  • May 2020:  The April Unsold Inventory Index was 4.1 months.  It was 3.2 months in April 2019.

    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.

     

     

  • May 2020:  The Unsold Inventory Index in April was 4.8 months. A year ago, in April 2019, it was 2.4 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.

     

     

  • May 2020:  NOTE: 51% of the April sales had a purchase contract signed prior to the Shelter In Place order on March 16; 49% were signed after. Extremely low April sales (90, the fewest in at least 25 years), a coronavirus consequence expected to continue in the short term, can cause significant variation in the monthly median sales price because of the smaller sample size. In an exclusive Zoom interview with our local five-county MLS members on May 28, internationally acclaimed economist Elliott Eisenberg, Ph D. stated that he thought it would be July before our market area would show enough sales to approach historical normals. He also stated that he did not expect large decreases in home values, with the caveat that a large resurgence of COVID-19 cases would bring yet unknown factors.

    The median sales price for single family homes in April was $957,500. One year ago, in April 2019, the median price was $965,000.

    38 of the 90 sales, or 42%, sold for more than $1Million. The more affordable areas of San Lorenzo Valley and Watsonville had 23 sales, or 26% of the total. These numbers show how the mix of sales influences the overall median price (midpoint of sales prices) each month.

    There were no bank-owned sales or short sales in April.

    Sales over $1,000,000:

    April: 42% of the sales (Overall median was $957,500)
    March: 38% of the sales (Overall median was $925,000)
    February: 33% of the sales (Overall median was $900,000)
    January: 40% of the sales (Overall median was $880,000)
    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)

    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.

     

  • May 2020:  NOTE: All but six of the April sales had a signed purchase contract prior to the Shelter In Place order on March 16.

    The median sales price for condominiums and townhouses in April was $615,000. A year ago, in April 2019, it was $630.000. 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.

     

  • May 2020:  The average sales price for single family homes in April was $1,118,709.  A year ago, in April 2019, it was $1,122,391.

    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.

     

  • May 2020:  NOTE: All but six of the April sales had a signed purchase contract prior to the Shelter In Place order on March 16.

    The average sales price for condominiums and townhouses in April was $782,500. A year ago, in April 2019, it was $626,480. 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.