Thanks to those who have provided the positive comments to my blog.  As the data in my blog would be of interest to a very finite market, I am pleased to hear that someone outside of my office is finding it of value.  It was never my intention to comment on the market place in a national or statewide basis.  The media does that well enough. My intention was to demonstrate that the data for the areas I survey are different than other regions and there are differences within these communities.

The current Active inventory is lower than 2008 and 2009, and when combined with higher demand and several other factors, one should expect prices to stabilize at worst. Our current active inventory is 46% higher than it was at this time in 2007.  Compared to the 2004 baseline, our current inventory is 62% higher.

Current Pending Sales (235 units) are up significantly over 2007 (149 units/58%), 2008 (161 units/46%), and 2009 (185 units/27%), but as I have stated, ad nauseam, the number is skewed by the amount of Short Sales that, in most cases, take a very long time to close, if they close at all.  To compare the health of the Pending status data, I have to presume that there were no Short Sales in 2004 and 2007.   As the REO activity happens in any market and seems to be relatively nominal even in our current market area, I will not discount those types of sales from the statistics.   Of the 235 current Pending sales, 77 of them are listed as Short Sales, leaving a net amount of non-Short Sales at 158 units.  That would mean that we are slightly ahead of 2007 (6%) but far behind 2004 (35%).

The Good News/Bad New department is the May Closed Sales.  First the good news; May 2010 Closed Sales at 131 units are down slightly from 2007 (136 units) but up from 2008 (105 units) and 2009 (90 units).  Also a strong indication of increased demand is that 58 of those closed transactions sold for the asking price or more.  The sad part is that of the 131 units that closed escrow this May, only 6 of them were Short Sales compared to the 77 Pending properties that are listed as Short Sales.  I guess one could argue that the 6 close Short Sales are better than the mere 5 that closed in May 2009. On another positive note, when discounting the Short Sales that closed escrow in May 2010 the number of closed escrows represents 65% of those closed in 2004, the year with the highest number of closed units in my 10-year survey.

REO listings and sales are showing a respectable consistency.  There are 10 units of bank-owned property in both the Active status and Pending status and 9 bank-owned units closed escrow in May.

May 30, 2010 Spreadsheet

May 30, 2010 SSREO Survey

May 31, 2009 Spreadsheet

June 1, 2008 Spreadsheet

June 3, 2007 Spreadsheet

May 30, 2004 Spreadsheet

May 30, 2010 Chart

This week I’ve decided to add one more spreadsheet to my surveys.  When I first began tracking the short sale and REO activity, I was preparing my survey once a month usually at the end of the month.  My intent was to identify how many of each of these types of listings were in each status.  Also, as short sales were notorious for taking a long time to receive short pay lender approval, I wanted to see the ratio of Pending Short Sales listings that were converting to closed transactions.

As I make a short presentation on this information each week to our local Association of Realtors and to my office, there were more requests for the Short Sale/REO information.   I found a faster and easier way to identify distressed sales properties and now will be including this survey each week.

I’ve also decided to let you look at the data this week and draw your own conclusions.  I will expand my commentary next week after I have the closed sale data for the entire month of May. 

May 23, 2010 Spreadsheet.

May 23, 2010 Short Sale/REO Survey

May 24, 2009 Spreadsheet

May 25, 2008 Spreadsheet

May 20, 2007 Spreadsheet

May 23, 2010 Chart

May 23, 2004 Spreadsheet

Only increasing by 3 homes this week, the properties in the MLS Active status remained relatively the same as the previous week.   The chart posted in this blog for the second week of May shows a slow downward trend in the available inventory since 2008.  Reflecting back to 2004 when the most homes closed escrow in all of San Mateo County, the number of homes in the Active status at this time of year was 209 compared to our current 358.

The 257 homes currently in the MLS Pending status are up slightly from last week by 3.6% and up compared to 2007 (155), 2008 (147) and 2009 (180) and equal to 2004.  Of the total Pending Sales, 82 (32%) are listed as Short Sales, 14 (5.5%) are listed as Bank-Owned.    The high number of Short Sales could skew the perception of the market conditions as these types of transactions require much longer escrow periods and sometimes fall apart because the short pay lender will not approve the sale or the buyers become impatient with the delays and move on to something else.

A more accurate indication of market conditions are the Month-to-date closed (Sold) transactions.  Current Sold transactions, at 56, are up from 2007 (52), 2008 (50), 2009 (40).  There were  80 closed transactions at this point of the month in 2004.  Also important to note, 26 of the 56 homes that closed escrow sold for the asking price or more.  The sad commentary on the close of escrow of short sales continues.  Of the 56 homes that have closed escrow, only 4 were listed as short sales.  Three were bank-owned properties.

Other random interesting data to focus on:  The number Hillsborough homes in the Active status.  As it was last week, both Belmont and San Mateo have more homes in the Pending Status than in the Active status.  58 of the 137 Pending Sales in San Mateo are Short Sales.  14 of the 22 MTD closed Sales in San Mateo were at the asking price or above.  The highest priced homes in Belmont, Burlingame and San Mateo were at the asking price or more.  With the exception of Hillsborough, look at how small the range of prices, relatively speaking, are for the highest priced homes that closed in the other 5 communities.  The same can be noted for the median priced sales as well.

One interesting thing that occurred in two recent transactions in our office; in both cases they were “As-Is” sales relieving the seller of responsibility for repairs or warranties of any disclosed matters.  One of the transactions required a VA loan and another was a high balance conforming loan and the buyer’s lenders for each of these transactions required the pest control work to be performed prior to funding.  Because this work was to be paid by the Buyers and completed prior to the close of escrow, it created special and somewhat complicated negotiations with regard to indemnification,  mechanics liens, additional work discovered as work progresses in previously identified “inaccessible areas”,  sufficient deposits in escrow, expanding the responsibility for the cost of the work separately and beyond the previously agreed Liquidated Damages limitations, and so much more.  I hope this isn’t a trend for the lenders.  If it is, it provides all the more reasons for Sellers to have the structural pest control work completed prior to putting their home on the market.  These buyer’s lender requirements could also further complicate and extend the close of escrow for short sales and REO’s.   If this type of pre-funding condition were to arise late in the transaction, it can cause a lot of stress and anxiety.

5.16.2010 Chart

5.16.2010 Spreadsheet

5.17.2009 Spreadsheet

5.18.2008 Spreadsheet

5.13.2007 Spreadsheet

5.16.2004 Spreadsheet