Real Estate Market

Our latest National Housing Market Report is out. This one examines data through end of July 2008. You can download the PDF here.

Here's the press release:

Real Estate Report: National Housing Prices Down by 0.8% in July

Report measures current real estate data in major markets around the country. Data shows Las Vegas continuing to lead as the weakest US housing market with real estate prices down another 4% in July. Current real estate data shows some summertime price stability in Midwestern markets Detroit, Cleveland, Indianapolis, and Minneapolis

MOUNTAIN VIEW, CA August 5, 2008 - The Altos 10-City Composite Price Index showed a decline in asking prices of 0.8% in July and 1.3% for the past three months. Prices of properties listed for sale fell in 13 of 26 major markets according to the Real-Time Real Estate Report, published by Altos Research, the premier source for real-time real estate data, and market analysis consultancy Real IQ.

Asking prices fell at the fastest rate in Las Vegas - down 4.0% during July - and 7.5% over the most recent three-month period for an annualized rate of 30%. Listing prices rose at the fastest rate in Detroit - up 4.8% in July - followed by Cleveland where prices were up 2.7%. Prices were also up slightly in the Midwestern markets of Indianapolis and Minneapolis.

"While prices continue to fall in coastal and Western markets, prices appear to have stabilized in Midwestern markets that were previously declining," said Michael Simonsen, CEO and co-founder of Altos Research. "The real test will come in the fall when markets typically experience a seasonal slowdown which will be exacerbated by high job losses and foreclosures."

Asking prices fell at the fastest rate in Las Vegas - down 4.0% during July - and 7.5% over the most recent three-month period for an annualized rate of 30%. Listing prices rose at the fastest rate in Detroit - up 4.8% in July - followed by Cleveland where prices were up 2.7%. Prices were also up slightly in the Midwestern markets of Indianapolis and Minneapolis.

Listed property inventories declined with the 10-City Composite markets showing a decrease of 2.0% in July. Inventory rose in just 6 of 26 markets with the biggest decreases occurring in Detroit and Cleveland.

"Broadly declining inventory is a positive sign in the near-term, particularly for the Midwestern markets which all showed inventory declines," said Stephen Bedikian, partner and research director for Real IQ.

For the Altos 10-City Composite, the average days on market was 111, a slight increase from 109 in June. Thirteen of 26 markets had an average days-on-market of 100 or more. By far, the market with the slowest rate of inventory turnover was Miami at an average of 156 days-on-market, nearly a full month more than the next slowest market - Tampa. Austin led all markets with the fastest rate of inventory turnover at an average of 78 days-on-market.

Data in the Real-Time Housing Market Report is based on analysis of over one million properties currently listed for sale in 31 metropolitan markets across the country. The report is the most timely source of housing market data on current market activity.

The report examines housing pricing, inventory levels and market conditions in 31 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC. The Real-Time Real Estate Report is released every month.

We released our National Real Estate Report today. Here's the press release.

Real Estate Report: Housing Prices Down By 0.5% in June

Report measures current real estate data in major markets around the country. Data shows Las Vegas the weakest US housing market with real estate prices down 3.6% in June. Current real estate data shows Denver the strongest US housing market in June with prices up fractionally over May 2008.
MOUNTAIN VIEW, CA July 8, 2008 - he Altos 10-City Composite Price Index showed a decline in asking prices of 0.5% in June and 0.8% for the past three months. Prices of properties listed for-sale increased in 15 of 26 major markets according to the Real-Time Real Estate Report, published by Altos Research, the premier source for real-time real estate data, and market analysis consultancy Real IQ.

Asking prices fell at the fastest rate in Las Vegas - down 3.6% during June - and 7.2% over the most recent three-month period. This is the third consecutive month that Las Vegas has held that dubious honor. Listing prices rose at the fastest rate in Denver - up 2.6% in June and 6.4% over the most recent three-month period.

"While the Composite Index continues to show price declines, the rate of decline has slowed recently and more than half of the markets we track are showing sequential asking price increases over the past three months," said Stephen Bedikian, partner and research director for Real IQ. "Housing markets are local, and this downturn remains largely confined to specific geographic areas of the country with four states in particularly bad shape: California, Florida, Nevada and Arizona."

Listed property inventories increased substantially with the 10-City Composite markets showing an increase of 5.7% during the past three months and 1.9% in June. Inventory rose in 17 of 26 markets with the largest jumps in Los Angeles and San Diego, up 8.7% and 6.1% respectively in June.

Data in the Real-Time Housing Market Report is based on analysis of over one million properties currently listed for-sale in 26 metropolitan markets across the country. The report is the most timely source of housing market data on current market activity.

For the Altos 10-City Composite, the average days-on-market was 109, a slight increase from 106 in May. Eleven of 26 markets had an average days-on-market of over 100. By far, the market with the slowest rate of inventory was Miami at an average of 154 days-on-market. Austin led all markets with the fastest rate of inventory turnover at an average of 72 days-on-market.

"Inventory continues to increase which is typical during the seasonally strong spring and summer seasons," said Michael Simonsen, CEO and co-founder of Altos Research. "The true test will come in the fall when the market experiences seasonal weakness. If inventory, especially foreclosure listings, piles up too quickly, prices may start declining broadly again."

The report examines housing pricing, inventory levels and market conditions in 31 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Indianapolis, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, Salt Lake City, San Diego, San Francisco, San Jose, Seattle, Tampa, and Washington, DC. The first report was published December 7, 2007 and is released every month. Report downloads are available at: www.altosresearch.com.

We released the latest National Real Estate Report today. You can download it here [PDF].

The data inspects 26 metro markets around the country and tracks home prices, inventory and days on market. We also track the Altos 10-City Composite for a National perspective on the trends.

Here's the press release:

HOUSING PRICES DOWN BY 0.3% IN MAY

Listing Prices Fell in Only 11 of 26 markets

MOUNTAIN VIEW, CA � June 10, 2008 � The Altos 10-City Composite Price Index showed a decline in asking prices of just 0.3% in May. Prices of properties listed for-sale increased in 15 of 26 major markets according to the Real-Time Real Estate Report, jointly published by Altos Research, the premier source for real-time real estate research, and market analysis consultancy Real IQ�.

Asking prices fell at the fastest rate in Las Vegas - down 3.7% during May and 6.5% over the most recent three-month period. Listing prices rose at the fastest rate in Denver up 3.7% and Dallas up 2.2% during May. Prices increased by more than one percent for the month in 11 of 26 markets.

"The weakest markets continue to be concentrated in Florida, California, Arizona and Nevada which all experienced the fastest price increases during the boom times," said Michael Simonsen, CEO and co-founder of Altos Research. "Now these same markets are outpacing others on the downside as foreclosures and price declines continue relentlessly. We�re seeing some stability in many markets outside of these hard-hit states."

Listed property inventories increased substantially with the 10-City Composite markets showing an increase of 7.9% during the first quarter and 3.7% in May. Inventory rose in 25 of 26 markets with the Miami market being the only exception. Inventory actually declined 1.3% in Miami during May and 2.4% during the past three months.

Data in the Real-Time Housing Market Report is based on analysis of over one million properties currently listed for-sale in 26 metropolitan markets across the country. The report is the most timely source of housing market data on current market activity.

For the Altos 10-City Composite, the average days-on-market was 106 � an improvement from 111 in April and 113 in March. Miami experienced the longest time-on-market span with an average days-on-market of 152. San Francisco led all markets with the fastest rate of inventory turnover at an average of 73 days-on-market.

"Continued growth in inventory across virtually all markets will restrain near-term price increases," said Stephen Bedikian, partner and research director for Real IQ. "Markets like Denver and Dallas are showing strength because they did not experience high price inflation during the boom and are showing only limited inventory growth now. Affordability and limited inventory are the keys to a healthy market."

The report examines housing pricing, inventory levels and market conditions in 31 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Indianapolis, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, Salt Lake City, San Diego, San Francisco, San Jose, Seattle, Tampa, and Washington, DC. The first report was published December 7, 2007 and is released every month. Report downloads are available at: www.altosresearch.com.

A couple of charts to chew on this morning.

How's the condo market in San Francisco? Are all those new developments flooding the market yet? Let's look at pricing and value trends for Condos in the city.

Looks like pricing trends are holding nicely in the past year. Why is that? A quick hypothesis is that despite the fact that there are tons of new developments coming on line, the existing inventory of condos is actually very low relative to the population and immigration in San Francisco.

SocketSite shows some year over year inventory charts for real estate in San Francisco today. Here's how the inventory breaks out between single family and condominiums.

Altos links: San Francisco real estate reports

Today's look inspired by conversations with a subscriber in Charlotte North Carolina. (In case you haven't noticed, we've started publishing the Charlotte Real Estate Reports now.)

Given the sorry state of the national housing market, how is Charlotte faring?

Let's look at some of the towns around Lake Norman: Huntersville, Cornelius, and Davidson.

At around $300,000, Huntersville and Cornelius are nice upscale markets in a pleasant part of the world. Davidson is a little higher-end and is showing some signs of weakening prices off about 5% from last autumn. Davidson also has the highest days-on-market measure for all three towns. At 140 days, these properties are definitely not flying off the shelves.

But as you can see from the price chart, home prices in this part of the country seem to be holding up. Why is that?

We see two common themes of housing markets avoiding the big crush this winter:

1. They're markets that didn't climb spectacularly high during the boom.
2. They're steady growth economies.

What's a steadily growing economy mean? Well for one thing, it means people are moving in to the area. Check this population chart from Ersys.

So the Charlotte area has those two things in it's favor. What's next? Where does the market go from here?

Like most of the country, home buyers are in no hurry in Charlotte. We measure relative demand levels with our Market Action Index. When this index drops below 30, we call it (ever optimistic) a "Buyer's Market". The lower this index goes, the lower the current levels of demand and the more likely you are to see home prices decline in the near future. I'm afraid on this point, our Charlotte area towns aren't faring any better than most of the country.

As we mentioned with Austin, Texas the other day, some markets haven't yet been hit by the big hammer. If we escape a painful recession, maybe home values in these markets don't collapse. Unfortunately there's nothing in the early numbers that indicate home prices will climb significantly from here in the near term.

The New York Times last week carried a story on the tale of two housing markets.

AUSTIN, Tex. — The real estate market these days is a tale of two Americas, and one of them is not doing too badly.

In the America of big-city housing markets, especially on the coasts and in the struggling industrial Midwest, the huge run-up in values in recent years has given way to big drops in prices and sales volume. Millions of people owe more than their houses are worth.

But in the other America, specifically in cities like Austin; Grand Forks, N.D.; Yakima, Wash.; and Salem, Ore., the available evidence suggests the real estate market is holding up. Prices there never boomed as crazily as they did in the big cities, and now, even though volume is down almost everywhere, prices in many of these towns are firm or rising.

We'll leave aside the fact falling prices in the struggling industrial towns and the falling prices on the coast are barely related to each other and focus instead on the last statement.

Are home prices in Austin, Texas indeed holding up? Let's look:

From our perspective, Austin is indeed holding up better than some of the most bubbly markets, like Phoenix and San Diego.

Keep in mind though that in every market, the answer is: it depends. It depends on your price point, it depends on your neighborhood. In fact if we dive into Austin a little deeper, we find where that even though the prices haven't adjusted deeply, we can see where market demand is indeed cooling.

Days on market is climbing steadily across all price points. Despite a seasonal improvement in market time, The high end of Austin is on the market for a pretty long time right now. Buyers are in no hurry.

Furthermore, in Austin, when you look at the price quartiles, you can see the top of the market is squeezing but the bottom remains reasonably solid. This often implies, as the Times suggests, that the underlying economy is strong, immigration is positive, and people aren't so worried about their jobs. Here's the chart of home prices in Austin, by quartile. Note the slight squeeze at the top end of the market.

So I'll conclude with a cautious agreement with the Times. Yes indeed there are markets so far escaping major carnage. Many of these markets didn't have the incredible upside in the past few years, so that stands to reason. Finally though, nearly all markets are showing signs of weakness. The key worry for all these markets is that they're following the economy, not leading it. If a recession evolves into full bloom, I don't see how anyone is spared.

Links:

Austin Real Estate Report

San Diego Real Estate Report

Phoenix Real Estate Report

In the Dallas real estate market? D Magazine's Dallas Dirt blog is a great read. Among the insidery local rumors and excellent house porn, Candy Evans has been tapping our AltosCharts lately for some insightful interpretation of the housing market trends at the local level for all y'all Texans.

[aside: as a snobby Californian, this is what I instinctively think of when I think Dallas homes. But this makes me want to move there.]

Link: Our free Dallas Real Estate Research

Last week we published the February editition of our National Housing Market report [PDF download]. I was traveling and forgot to add it to the blog, so here it is. We've expanded the coverage this month and added a few more cities ebyond the initial 20 covered by the Case Shiller Index. We'll add a few more important cities in the upcoming versions of the reports too.

Here are the highlights from this month's report.

• Listing prices declined in 19 of 22 markets during January. Prices only increased in the New York metro area during January and were flat in Dallas and Phoenix.

• The largest monthly decline of 3.6% occurred in San Francisco. Over the three month period, listing prices in San Francisco have fallen by 6.1% from $708,551 to $665,100. The other California markets of Los Angeles and San Diego logged declines of more than 2% for the month of January.

• Property inventories declined in most markets except in the Northwestern markets of Seattle and Portland. Inventories tightened sharply in the Midwestern markets of Cleveland and Detroit with decreases of 10.4% and 5.4% respectively during January. Seasonal declines in listing inventories are typical during the winter months.

• Markets with the longest time-on-market are Miami and Minneapolis at an average of 144 days-on-market. Miami’s days-on-market only increased slightly from the previous month’s 143 days while Minneapolis jumped over 5% from 136 to 144 days. Sixteen of 22 markets had an average days-on-market of over 100.

• Denver led all markets with the fastest rate of inventory turnover at 61 days, followed closely by Dallas and San Diego at 80 days. The sharp decrease in Denver’s days-on-market indicator – almost 39% during the past three months – coupled with an inventory reduction of over 11% during the same period, should be a positive for listing prices in the coming spring selling season.

Jonathan Miller published the November Radar Logic RPX housing market report over the weekend. It's easy to spot that Sacramento is leading the nation down.

[aside: Radar Logic is cool. They measure Price Per Square Foot and try to do it across all properties, condos and single family homes, new and existing construction. No small task. The price per square foot approach is intended to measure value of the property regardless of the size of the property itself. In the real estate derivatives trading business, Radar is getting all the mindshare. Case Shiller is falling behind. more here.]

In the report just published for November, Sacramento saw a price-per-square-foot decline of 18%. Zowie. For those of you unfamiliar with California's central valley, this is an area dominated by lots of new construction, in huge projects, partly as Bay Area super-exurb. So the underlying economy in the Central Valley isn't nearly as dynamic as San Francisco, San Jose, or Los Angeles. Also much less dominated by the high-end, Sacramento is feeling the subprime fallout harder than most.

So Radar Logic is publishing for November. What are the real-time stats saying? Sacramento is not seeing any relief yet. Here's our price per square foot for Sacramento through February 1 2008.

Sacramento Housing Market Data Links:

Our free Sacramento Real Estate Research page

Here's a solid Sacramento Area Blog for more local flavor.

Last month we started publishing the Real-Time National Housing Market Report with Steve at Real IQ. The January 2008 edition was published yesterday. You can download the full report here.

The report was picked up today morning by the Dallas Morning News. Dallas is notable because we've watched demand stay at less-bad-than-most.

Here's the press release that accompanied this months report.

HOUSING PRICES CONTINUED TO DECLINE IN DECEMBER

Time-on-Market Increased as Housing Market Demand Falls Faster than Supply

MOUNTAIN VIEW, CA – January 9, 2008 – Prices of properties listed for-sale fell in 16 of 20 major markets according to the Real-Time Housing Market Report, jointly published by Altos Research, the premier source for real-time real-estate market research, and market analysis consultancy Real IQ™.

Prices fell at the fastest rate in San Francisco, down 4.6% during the 4th quarter. Prices also fell by more than three percent in the Las Vegas, San Diego, Los Angeles and Detroit markets during the most recent three month period.

Data in the Real-Time National Housing Market Report is based on analysis of over one million properties currently listed for-sale in 20 metropolitan markets across the country. The report is the most timelysource of housing market data on current market activity.

The report also found that the time-on-market increased in virtually all markets. Miami experienced the longest time-on-market span with an average days-on-market of 143 in December. Minneapolis and Detroit both had the second highest average days-on-market at 136.

“Sellers continue to adjust their price expectations downward but not quickly enough to keep pace with declining demand,” said Stephen Bedikian, partner and research director for Real IQ. “Until we see
declines in both inventory levels and days-on-market, we won’t have any confidence that supply and demand are balancing out.”

For-sale listed property inventories declined in most markets during the past three months except in the Florida markets of Tampa and Miami which posted inventory increases of 10.5% and 4.0% respectively.

Inventories declined dramatically in Boston with a decrease of 21.7%. Inventory also fell more than 15% in Minneapolis, Denver and Seattle. “Declining inventory levels are essential to a recovery in the housing market,” said Michael Simonsen CEO and co-founder of Altos Research. “However, if the economy continues to slow or enters a recession, we may see inventories balloon again in the Spring and downward pricing pressure on sellers will intensify.”

The report examines housing pricing, inventory levels and market conditions in 20 major U.S. metropolitan statistical areas (MSAs): Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC. The first report was published December 7, 2007 and will be released every month.

Dustin Luther is on a tear. 4Realz.net has instantly become the insider's go-to guide to the real estate technology market. Recently unbound, Dustin is busy breaking news and publishing lucid insights on the market. Today he cites The Motley Fool speculating on a Zillow IPO in 2008.

“Zillow was the brainchild of Expedia’s founder, so it’s really just a matter of time before the company follows suit and goes public. Even with dot-com realty plays like HouseValues and Realtor.com parent Move trading in the mid-single digits, Zillow has enough Teflon to make it as an IPO.

I'll go on a limb and say, Not a chance Zillow IPOs in 2008. Rather, Dustin has motivated me to organize these predictions for Zillow (and the rest of the RE.net) for 2008:

• Barton moves to chairman-only by mid-year. He's got the venture and hedge funds to keep him busy.
• In addition, I'd bet maybe 5 of the current 11(!) VPs rotate out in 2008. Is this a company that can actually keep it's General Counsel busy full time? Doesn't make any sense to me. Clean house, drop the burn rate, focus on the core business.
  

There's no question they're building that company to take it public and have the right product and team foundation, but think about it in context of the Kayak/sidestep news. That's a combined company of 60 people with $85 million in revenue. There's your IPO. Zillow has 165 employees! That's a big burn rate. Plus how many IPO investors are going to be excited about getting into a residential real estate play in 2008? 2010 is my guess for Zillow - after some wrenching changes, and some smart revenue moves. (David G, what say you? Am I full of it?)

In related re.net developments, here's another prediction to think about:

• Redfin.com will introduce premium-level, full-service, full-price product lines.

I've grown less sanguine about the Redfin business model this year. Champion of the discounters, Redfin's gotta scale its revenue. CEO Glenn Kelman posted some of his business metrics on Guy Kawasaki's blog (which took some serious cojones, so kudos to Glenn for stepping up.) In that post, one thing is clear: he needs to marshal Redfin to $100 million in revenue, fast. If you assume that Redfin clears ~$5000 on it's discount home sales transactions, that means they have to scale to 20,000 home sales in the next couple years. In this market.

Glenn also pointed out that they have more people driving around in the field than they originally planned. (i.e. the model scales less efficiently.) But if you introduce premium services and can bring your average-revenue-per-deal closer to $10,000, that's a much more achievable target. Not surprisingly, this was also the path that Zip Realty took several years ago.

One last one:

• Trulia's traffic overtakes Zillow's.

Paul Kedrosky took some flak the other day for citing a single traffic source highlighting declining web traffic for Zillow.com. Web traffic is a black art, so we can divine only a few things for certain: 1. Zillow's new feature introductions are only marginal page-view increases on top of the core value proposition. None of these create the power curve in traffic growth. 2. They started with the biggest bang you can. It's hard to go up from there. Furthermore, when you're in front of the fire hose, it's hard to discerne which site/product tweaks lead to organic growth. So Zillow's current growth was actually retarded by their early success. 3. Trulia's growth is more organic (and more visible in the monitoring services). It's based on start-small, test often, repeat-what-works. So Trulia's growth seems to be oriented on increasing market penetration, search optimization, and product improvement. As a result, in mid 2008, we'll see the first of the compete/quantcast/alexa charts that illustrate Trulia crossing over Zillow. Mind you, I'm not convinced that Trulia has their revenue proposition nailed yet. I'm sure there's a prediction in there somewhere too. Just haven't found it yet.

When we started this company, one of the things we envisioned was creating a National Housing Market Report -- one that would be a right-now alternative to the laggard OFHEO reports and even the Case Shiller releases. Well today is the day, folks. The Altos Research Real IQ National Housing Market Report is here!

In it we look at 20 major metro markets, publish some key stats about pricing and supply and demand trends and we draw some conclusions about what's happening out there. The U.S. metropolitan statistical areas (MSAs) covered in the report include: Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC.

We're working in conjunction with Stephen Bedekian from Real IQ. Stephen is an industry leader, writer, and consultant and he helped bring this project together. This being the first issue, it took us a few extra days of editing. In future months, we'll be aiming to publish the report just a few days after month's end.

The latest version of the report is available for download on our financial institutions page. Or you can download the PDF here.

The Press Release headline this month isn't any shocking news - Surprise! Prices are still under pressure! But we're laying the foundation here to be the first to identify the eventual bottom of the market. From the press release:

REPORT: HOUSING PRICES
CONTINUE DECLINE IN NOVEMBER

Time-on-Market
Increased as Housing Market Demand Falls Faster than Supply

MOUNTAIN VIEW, CA
- December 13, 2007 – The listing prices on properties in 18 of 20 major markets across the U.S. fell during the month of November. San Diego experienced the steepest decline with listing prices falling 5.8 percent as the recent wildfires exacted a toll on demand. This information was presented in the newly-launched Real-Time National Housing Market Report*, published by Altos Research, the premier source for real-time, real-estate market research and Real IQ™, a market analysis consultancy.

The Real-Time National Housing Market Report is based on an analysis of data from over one million properties currently listed for sale in 20 metropolitan markets across the country and represents the most timely source of housing market data on current market activity.

“Real estate information tends to be highly latent and subject to a lot of revisions,” said Michael Simonsen CEO and co-founder of Altos Research. “It takes several months before the S&P/Case Shiller Index or the
OFHEO data is released for a given month. When you're making investment decisions or trading derivatives these lag times are simply killers.”

Another key trend noted in the new report was an increase in the time-on-market duration for homes on sale in virtually all markets. Miami experienced the longest time-on-market span with an average days-on-market of 137 in November. Minneapolis had the second highest average days-on-market at 125.

Listed property inventory levels displayed seasonal declines in many markets with the exception of Las Vegas where for-sale property listings increased 6.6% over the past three month. “While inventory levels declined in most major markets, the decline in supply could not keep pace with the rapid fall in demand,” said Stephen Bedikian, partner and research director for Real IQ. “We expect time-on-market will continue to lengthen and apply pressure on homeowner pricing decisions until buyers regain confidence and demand levels off. So far that point is not in sight.”

*The first report was published December 7, 2007 and will be released every month. Report downloads are available from Altos Research.

At the NAR conference in Las Vegas, I did an interview with Joel Burslem from Inman News. The video is up today on InmanTV.

The video uses a sweet player from WellcomeMat.