Altos Research Real Estate Insights

New Home for the Altos Research Blog!

nospam@example.com (Mike Simonsen) — Fri, 26 Jun 2009 08:10:42 -0700

Hey friends - we've rolled out a new home for our blog (finally!). From now on point your browsers, readers, and related whatnot to blog.AltosResearch.com.

Altos Data Goes Mobile!

nospam@example.com (Mike Simonsen) — Mon, 20 Apr 2009 08:32:37 -0700

Tons of fun new features going on here at Altos Research. Today we get to announce AltosXplorer: our full database query and charting system, is now mobile! That's right folks, a couple terabytes of real estate statistics and pretty charts right at your fingertips.

Altos subscribers: Get your AltosXplorer mobile link by logging in to your account and selecting My Xplorer, Xplorer Mobile from the menu. Then send the URL to your phone. That's it! (You will, of course, need a phone with a web browser. And it'll need to have javascript enabled. My Blackberry did not have javascript enabled by default, FWIW.)

Get your AltosXplorer link for your mobile phone browser.

On your phone, you'll be able to select market area, city, zip code, and any of a bunch of different statistics. Want to take a peek at condo inventory trends while showing properties to a buyer client? Just a couple of clicks and you're at the data.

Simple formatted AltosCharts on your mobile browser. Rock on.

Lead Contact Form Goes Mobile Too!

Many of our realtor subscribers like to use the data to reach new clients. What do you do when you find yourself engaged in a conversation about the market with a someone? Well now you can say, "Here, let me send you a report, you can check for yourself." The AltosConnect mobile lead-sign-up form is super handy. Pop in their name and contact information and they'll have a local market report in their inbox before you're even done with the conversation. How cool is that? We rolled this out a couple weeks ago. Lots of positive response.

To get the link to the mobile version of your AltosConnect contact form widget, sign in to your account, select My Connect from the left hand menu, Save and Preview the widget, and enter your phone number. Again, that's it! Bookmark it on your phone and you'll always have access to your Altos database.

Give both features a try and let me know how they work for you!

Not entirely on a blogging hiatus...

nospam@example.com (Mike Simonsen) — Wed, 15 Apr 2009 09:05:16 -0700

This blog has been frustratingly silent for too long. The ebb and flow of running a company and my personal creative juices combined for an extended drought. I have not been totally silent, however. Here are a few of the things that I've been up to, and some things to look forward to:

Twitter, for all its virtues, has clearly detracted from my blogging output. Why articulate a full, reasoned article when you can blurt out a 140-character idea? I'm only partly kidding. The good news is that Twitter has proven help me weave surprisingly deep relationships with the same people who read this blog, so I'll continue. If you concur, make sure we're connected on Twitter. I'm @mikesimonsen

For more complete thoughts, I've started publishing over at AgentGenius. For readers not familiar, AgentGenius is a forum about and for the real estate professionals. The articles I'm writing over there are tending to be about how realtors can use market data when working with their clients. I have a lot more to write for them.

That brings up another channel for my creative output the last few months: Real Estate BarCamps. Since January we've been in New York, Seattle, Virginia, Los Angeles (also Atlanta by way of RE Tech South). Next week we're in Phoenix and Portland. Upcoming are Denver, Charlotte, Chicago, Philly, and Boston. If you're a real estate pro and haven't found your way to these free events yet, I highly recommend them. We lead a session on Using Real Estate Data in Your Marketing. It's been very well attended and very enjoyable. Lots of other goodies on technology, social media, marketing, and the future of the real estate industry at these events. Find your way to one.

At any rate, I have a personal goal this month to get the publishing pace back up. Stay tuned.

Check out our cool new market statistics widget

nospam@example.com (Mike Simonsen) — Sun, 22 Feb 2009 14:11:28 -0800

We've been quietly rolling out new features for subscribers here at Altos World HQ over the past couple weeks. Today I get to announce a super cool new feature that our subscribers (especially the bloggers in that crowd) have been raving about. [sound the trumpets]

AltosStats Live Market Statistics Widget

Previously our widgets were trend charts. Plug in a chart to your site to illustrate the trend of one or two local real estate statistics. But the data is often just as interesting in a table format - the precise reading, right now. Good information density as Tufte likes to say. To whit:

Frames not supported

We built the AltosStats widget to work like our other widgets. Just copy a little chunk of HTML and Poof! Live data on your site.

If you're an Altos Pro subscriber, here's how you can play: Log in to your account. Select the My Web Page menu item. Then click the Stats Widget link next to the market you want to display. That's it. All the data is live and all the formatting is done for you.

Finding your new AltosStats market statistics widget.

We made a skinny version too so you can drop one in the blog sidebar.

Frames not supported

There you have it. Enjoy.

National Report: Home Prices Drop Another 2.1% in January

nospam@example.com (Mike Simonsen) — Tue, 10 Feb 2009 13:27:28 -0800

Our National Report is out this week. From the press release:

Housing Prices Down by 2.1% in January

Inventory levels

Mountain View, CA February 9 2009. The Altos 10 City Composite Price Index showed a decline in asking prices of 2.1% in January and 2.4% during the most recent three-month period. Prices of properties listed for sale fell in 23 of 26 major markets according to the Real Time Housing Market Report, jointly published by Altos Research, the premier source for real-time real estate data, and market analysis firm Real IQ.

Asking prices fell at the fastest rate in Las Vegas, down 5.4% during January, and 8.8% during the past three months. This marks the tenth consecutive month that Las Vegas has posted the fastest rate of declining prices among major markets. Listing prices rose at the fastest rate in Miami, up 1.5% in January. Price increases in these markets are functions of a shift in the class of properties rather than traditional buyer demand.

"Despite continuing decreases in inventory levels, asking prices remained on a steep downward path in January," said Michael Simonsen, CEO and co-founder of Altos Research. "The trends appear to be continuing. We can find no signs of a turn-around in the data as of the first week of February."

Inventory levels declined in most major markets with the exception of Portland, Seattle, Charlotte and Salt Lake City. Across the 10 City Composite Index markets, inventory declined by 3.3% in January and 9.7% during the most recent three-month period. Inventory fell by more than 5% in Detroit, Boston, Atlanta and Cleveland during January.

"Inventory levels generally increase in January as sellers anticipate the seasonally strong spring selling season," said Stephen Bedikian, partner and research director for Real IQ. "So far we are seeing the opposite as inventory levels are continuing the decline they began in the summer of last year. The big test will come over the next few months as any increase in inventory will exacerbate the already large imbalance of housing supply and demand by adding to the existing overhang of available homes."

The median days-on-market rose in all markets during January staying above 100 or more days-on-market in every major market. By far, the market with the slowest rate of inventory turnover was Miami at a median of 189 days-on-market or more than six months. Miami has experienced the slowest market turnover in every month since September 2007. Salt Lake City enjoyed the fastest rate of turnover with a median days-on-market of 101.

The report is free, register here to download.

Microsoft Layoffs and Seattle Real Estate

nospam@example.com (Mike Simonsen) — Thu, 22 Jan 2009 08:47:07 -0800

It's been rumored for weeks, but Microsoft made it official today, cutting 5000 jobs. Microsoft.

You're watching the last leg of the stool being kicked out. The tech industry held out longer than most this time around. In the first half of 2008 many of the highly compensated and generally well-financed people in the tech industry were keeping prices steady in the most desirable neighborhoods of the Bay Area and Seattle (notably waterfront properties). Then as the stock markets declined in the second half of the year, we lost a lot of down-payment money. Finally this crew is now worried about basic monthly income.

Here's how the housing market has been buffeted by the financial storm in Seattle.

Home prices and inventory levels for single family homes in Seattle as of mid January 2009.

I mentioned this to Aubrey Cohen at the Seattle PI in an interview last September as the job situation was starting to look bleak. "Seattle's drivers seem to be intact until the economy hits Microsoft and Amazon," I said at the time.

Well. Here we are.

Reviewing my 2008 RE.net Predictions

nospam@example.com (Mike Simonsen) — Wed, 31 Dec 2008 12:21:25 -0800

I've been deficient in my blog posting lately, so I'll squeeze one last one in to 2008. Let's look back at the predictions I made a year ago and speculate out a bit for this year, shall we?

Grading my 2008 Predictions, which focused on the RE.Net

Zillow.com doesn't IPO in 2008. Grade A: Well that was easy. (Note to self, negative predictions are easier that positive ones.) The news here, of course, is that NO ONE went public in 2008. Certainly not real estate related firms. 2009 isn't looking like any change on that front either. Last year I imagined a scenario that had 2010 liquidity event for Zillow. I'd revise that to 2011 at the earliest.
The corollary - Executive turnover at Zillow. Grade C: Zillow recently and wisely cut a big chunk of staff. But I've got to hand it to them, they've been more stable at the exec level for longer than I expected. I figured that with so many top people, some would be ready to try new opportunities this year. It looks like most of the gang is still there. I remain a bit suspect. A long time in this Valley makes me still feel like they're top heavy. (Do they really have two VPs of engineering? That can't be healthy.) In Zillow's favor this year, the economy will dramatically reduce the greener-grass effect on their talent.
Redfin.com launches premium products. Grade A: The story in 2007 was Redfin as the consumer champion discounter. The story in 2008 was Redfin as a maturing company, realizing that they needed broader revenue sources and that consumers are often happy paying premium rates for great service. I wonder about Redfin in the coming 18 months or so. Here's the dilemma: It's a sound business with a real market need, but I remain skeptical that the company can achieve the promises made to its investors ($100 million in revenue) any time in the foreseeable future and without significantly more capital. The good news is that Glenn Kelman has proven himself to be a savvy leader and insightful marketer. Redfin marketing has moved from "realtors rip you off" to "Redfin is a way better way to buy a home." Nice work.
Trulia's traffic ascendancy. Grade B. I was able to call an early win with one comScore traffic chart. But over the year we've seen a leveling off and Trulia not pulling ahead of Zillow. Both sites have continued to add features for pageviews. Though Trulia this year found itself receiving some of the negative pub from the blogosphere previously reserved for Zillow and Redfin, the only one under real pressure looks to be realtor.com (Move).

A pretty good batch if I do say so myself. And maybe I'm just off by timing on the misses. All in all an exciting year for Altos and all the players in the real estate interwebs business.

I'm out of time today. Will try to get my 2009 outlook posted before it hits, you know, second quarter.

Welcome the latest addition to Team Altos

nospam@example.com (Mike Simonsen) — Sun, 21 Dec 2008 04:47:53 -0800

The economy may be tanking all around, but we're still growing here at Altos Research. (The silver lining for us is that everyone needs to know what's going on in the housing market.) Today we get to announce the latest addition to Team Altos, Ricky Fernandez.

Ricky joins our sales team as our New Account Manager (he likes the title "Sales Guy" but we opted for a more functional title). Ricky's background is in mortgage finance and real estate, but his biggest asset is his huge personality. He's the kind of guy you can hear smiling on the other end of the phone. Energetic and insightful, Ricky is going to be a real positive for our clients.

Two-thirds of Team Altos: (l to r) Mike, Scott, Jason, Ricky ~~live from Redrocks~~ outside Townhall in San Francisco, December 19 2008. Not pictured Ginny and Kris.

They say that bad economic times make good times to build a company. I can vouch for the fact that the cratering job situation in California made it much easier for us to snag rock stars like Ricky (and Kris last month). I'm going to add the corollary that it's also a great time to join a startup. Altos Research is not a venture funded rocketship of a company. When we chose not to raise investment, we also knew that we wouldn't get to staff up hundreds of people like so many here in Silicon Valley. Rather, we're more like an ultralight - highly efficient and lots of fun. As a result, we like to aim for each new hire to lift the company to the next level. As each new person joins, they get the opportunity to join at a critical moment for the company, to significantly contribute to our success. When we look back in a few years on the other side of this crazy economy, and Altos emerges strong and innovative and bigger, we'll all get to say, "I created that." And at the end of the day, isn't that the greatest reward from a job?

But I digress. Help me welcome Ricky aboard. You're going to love working with him.

National Report: Real Estate Prices Decline 0.8% in November

nospam@example.com (Mike Simonsen) — Fri, 12 Dec 2008 04:18:36 -0800

We released our monthly national real estate report earlier this week. You can download the PDF here. Prices continued to fall in most markets. The Altos National 10-city Composite price fell 0.8% from October through November. Inventories are declining a little as would be expected in the fall.

Report: National Real Estate Prices Decline 0.8% in November 2008
The Altos Research National Real Estate Report measures current real estate data in major markets around the country. November data shows Las Vegas continuing to lead the country in home price declines. Inventory levels declined in most markets into the winter slow sales months.

MOUNTAIN VIEW, CA December 9, 2008 - The Altos 10-City Composite Price Index showed a decline in asking prices of 0.8% in November and 2.4% for the past three months. Prices of properties listed for-sale fell in 20 of 26 major markets according to the Real-Time Housing Market 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 3.3% during November - and 6.9% over the most recent three-month period. This marks the eighth consecutive month that Las Vegas has posted the fastest rate of declining prices among major markets. Listing prices rose at the fastest rate in Houston - up 2.4% in November. Denver, Dallas and Houston are now the only markets showing three months of sequential price increases.

"Tight credit, job losses and plunging consumer confidence continued to pressure listing prices in most major markets during November," said Michael Simonsen, CEO and co-founder of Altos Research. "Recent government actions to reduce mortgage rates and slow the pace of foreclosures could finally start to stem the decline but we don't expect to see major changes until at least mid-2009."

Inventory levels declined in 24 of 26 major markets with only Phoenix and Las Vegas registering small increases. Across the 10-City Composite Index markets, inventory declined by 5.1% in November and 7.5% over the past three months. Inventory fell by the largest amounts in Boston, San Francisco and Seattle. "Inventory levels have continued to decline for many months and November was no exception," said Stephen Bedikian, partner and research director for Real IQ. "The real estate industry continues to work through the large inventory overhang but only very slowly."
Twenty-four of 26 markets had an average days-on-market of 100 or more. The average days-on-market rose in all but one market, Las Vegas, where it was effectively flat during November. By far, the market with the slowest rate of inventory turnover was Miami at an average of 179 days-on-market. Miami has experienced the slowest market turnover in every month since September 2007. San Francisco enjoyed the fastest rate of turnover with an average days-on-market of 92.

The report examines housing pricing, inventory levels and market conditions in 26 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.

Now Taking Nominations for The 2008 Data-Rich Realtors Awards

nospam@example.com (Mike Simonsen) — Tue, 25 Nov 2008 08:20:05 -0800

We see a lot of good real estate data here at Altos. We see a lot of great presentations of that data too. We decided that we'd like to offer some recognition for the best stuff out there. So we thought it'd be fun to have a little awards ceremony. We'll call it the Data-Rich Realtors Awards.

A few guidelines:

Despite the name, we'd like to honor people in all parts of the real estate world. Realtors, mortgage, investors, other service providers.
The nominations are not limited to blogs. Though since many of the best publish their work on blogs, we expect that'll be a big part. There are tons of ways to analyze, present, and leverage data in the real estate business. All are welcome.
Nominations are not limited to Altos Research clients. There's tons of data out there and we want to honor innovative analysis and useful presentation. (Though many Altos clients are indeed data-rich...)
We're honoring people, not websites.
Individuals who contribute to websites are indeed eligible.
We'd like to honor brokerages or other firms, especially if you have the name of the person spearheading a great data project.

Nominate someone! (feel free to nominate yourself!)

&amp;amp;amp;amp;amp;amp;amp;amp;lt;a href=&amp;amp;amp;amp;amp;amp;amp;amp;quot;http://datarichaltos.wufoo.com/forms/z7x4m1/&amp;amp;amp;amp;amp;amp;amp;amp;quot; title=&amp;amp;amp;amp;amp;amp;amp;amp;quot;The 2008 Data-Rich Realtors Awards - Nominations&amp;amp;amp;amp;amp;amp;amp;amp;quot;&amp;amp;amp;amp;amp;amp;amp;amp;gt;Submit your nominations now!&amp;amp;amp;amp;amp;amp;amp;amp;lt;/a&amp;amp;amp;amp;amp;amp;amp;amp;gt;
Powered by Wufoo

Or email us: send name, web site, and other relevant info, like a particularly great blog, post to datarich@altosresearch.com

We'll take nominees through December 15, 2008

The Winners

Winners will be selected from the nominees by a panel of judges. We'll annouce the winners at the end of December. Nominate early, nominate often!

Luxury Real Estate Data in BusinessWeek

nospam@example.com (Mike Simonsen) — Tue, 18 Nov 2008 07:48:22 -0800

Some nice press coverage in BusinessWeek this week. We compile unique luxury real estate data for our friends at the Institute for Luxury Home Marketing. If you stopped by the ILHM booth at NAR last week, you'd have seen the great report that their members have access to. The Institute launched the reports at the show.

Coincidentally, BusinessWeek called looking for insights on how the real estate market is performing at the very high-end. The short answer is that, while the luxury market held out longer than the low end, everyone is feeling the pain now.

"The entry level of the upper tier--the $500,000 price point and up--has been softening for a while," said Laurie Moore-Moore, founder and CEO of the Institute for Luxury Home Marketing, a Dallas-based group that trains high-end agents. "What we've also seen in the last month is huge uncertainty at the very top of the market. People want to know where are we headed, how serious [the downturn] is going to be, and what is the duration. There are enough questions that at even at the top of the market people are waiting and watching."

Here's how our Luxury Real Estate Market data works: We take the 10 highest-priced zip codes in 31 metro markets around the county (as long as their median price is over $500,000). We composite those zip codes together into a metro regional view (for example of the luxury real estate market in Los Angeles). Then we roll all the metros into a nation-wide view, which we call the ILHM National Composite.

ILHM National Luxury Real Estate Data.

The data and report are available only through ILHM and ILHM members. If you're interested in seeing all the detailed statistics at the national level, you can download the weekly National Luxury Market Report from ILHM. Institute members have access to the detailed luxury data in their local markets as well, which is cool.

Meet Our Mew Customer Service Guru!

nospam@example.com (Mike Simonsen) — Thu, 13 Nov 2008 12:13:15 -0800

Big week here at Altos Research World Headquarters. We get to announce our latest addition to the team, Kris Miranda!

Kris is taking the role of Customer Service Guru. That means most of the time she'll be working with our Realtor subscribers - helping them maximize their benefit of working with Altos, getting them up to speed quickly, holding hands when necessary.

Her talents include all those areas that our clients care about - strong web technical chops, excellent experience with internet marketing and she's a great problem solver.

We have ambitions here at Altos to really distinguish ourselves with our customer service, much the way the team at Zappos and our friends at RealEstateShows have done. It took us a long search but we found someone who has the skills and style to be totally focused on the strategic and tactical success of our clients. We couldn't be more excited.

Everyone bid Kris a warm welcome. She's your new best friend!

Altos Research in Forbes - Ten Best Suburbs to Sell a Home

nospam@example.com (Mike Simonsen) — Tue, 11 Nov 2008 01:28:44 -0800

Our latest article with Forbes.com is out. This one was a toughie. Their editors called and asked, "Where are the best selling suburbs for sellers right now?" It's a tough question because the answer, really, is no where.

Sure the best properties, properly priced, in the best neighborhoods, will find their buyers. In fact we documented surprising resiliency in some markets through the summer. But even though prices might be holding, demand continues to slip. By our Market Action Index, there are essentially no markets with demand levels high enough to call them "Seller's Markets". We settled on identifying ten suburbs whose demand trends (as measured by Market Action Index and days on market) simply weren't horrible.

My tongue-in-cheek quote for Matt at Forbes was,"If you have to sell your home, do it in one of these suburbs."

Full article at Forbes.com

National Report: Real Estate Prices Drop Another 1.5% in October

nospam@example.com (Mike Simonsen) — Mon, 10 Nov 2008 07:39:27 -0800

Our latest National Real Estate Market Report is out today. Prices continuing their drop nationally, with some evidence that the price declines are even accelerating. Here's the press release. The November 7, 2008 PDF Report can be downloaded here.

Report: Real Estate Prices Decline by 1.5% in October
The Altos Research Real-Time Real Estate Report measures current real estate data in major markets around the country. The latest data shows home prices continuing their decline, dropping 1.5% in October. Inventory of available homes declined in all 26 markets monitored in the report, but demand levels are dropping faster than supply.

Mountain View, CA (PRWEB) November 9, 2008 -- The Altos 10-City Composite Price Index showed a decline in asking prices of 1.5% in October and 2.9% for the past three months. Prices of properties listed for-sale fell in 22 of 26 major markets according to the Real-Time Housing Market Report, 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 October - and 7.1% over the most recent three-month period. This marks the seventh consecutive month that Las Vegas has posted the fastest rate of declining prices among major markets. Listing prices rose at the fastest rate in Denver - up 0.7% in October - followed by Houston where prices were up 0.6%. Denver and Houston are now the only markets showing three months of sequential price increases.

"The fleeting signs of price stability that we saw during the summer have now completely vanished," said Stephen Bedikian, partner and research director for Real IQ. "October's stock market crash has crushed consumer confidence and housing price declines have resumed across most major markets."

Inventory levels declined in all 26 markets. Inventory fell by the largest amounts in Boston and Charlotte with inventory contracting 7.9% and 5.7% respectively. Several other markets showed inventory declines of more than four percent for the month including: San Jose, Detroit, Houston and Phoenix.

"During October the steady trend of declining inventory continued with every single market showing a drop," said Michael Simonsen, CEO and co-founder of Altos Research. "However, economic conditions have been eroding housing market demand faster than supply is contracting with the result that listing prices continue to fall."
Twenty-three of 26 markets had an average days-on-market of 100 or more. The average days-on-market rose in all 26 markets. By far, the market with the slowest rate of inventory turnover was Miami at an average of 172 days-on-market. Miami has experienced the slowest market turnover in every month since September 2007. Miami's rate of turnover is now twice as slow as San Francisco which enjoyed the fastest rate of inventory turnover at an average of 86 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 26 metropolitan markets across the country. The report is the timeliest 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.

About Altos Research
Altos Research LLC pioneered real-time real estate research. Founded in 2005, the company's information products serve investors, traders, and thousands of real estate professionals. Because real estate data is traditionally obscure and highly latent, Altos built the Real-Time Market Intelligence(TM) platform to monitor dozens of housing market metrics as they are right now in local markets across the country. The company publishes real estate reports and real estate data each week for thousands of zip codes around the country.

Silicon Valley Real Estate and the Inverse GOOG Effect

nospam@example.com (Mike Simonsen) — Tue, 07 Oct 2008 07:28:33 -0700

For years I've written about the function of NASDAQ stock wealth on prime Silicon Valley real estate. I like to summarize with this phrase, "You don't buy a $2 million home in Palo Alto with a $1.8 million sub-prime loan. You buy it with $1.35 million in NASDAQ capital gains and a $650,000 in financing."

That fact has buoyed real estate demand and prices from Saratoga through San Francisco in the past two years - even as the lower end of the market has been pummeled.

Consider this: two companies (and their stocks), Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG), minted several thousand local millionaires between 2004 and 2007. (The back-of-the-envelope calculation works like this: Of GOOG's 16,000 employees assume 5,000 locals are mostly vested. Assume they collectively own maybe 8% of the company. At GOOG's 2007 peak of $711/share that's $18 billion in local wealth created since 2004. AAPL has a similar scale from an $11 stock in 2004 to $190 peak, spread over maybe 8000 vested local employees, is an additional $13 billion of local capital gains wealth created in the preceding four years.)

Many of those newly wealthy want to buy a home. The result is that simply from Google and Apple you have hundreds or even thousands of buyers at the high-end of the market.

Couple this demand with the peculiar small-supply situation of the local region (limited new construction yields only a handful of available properties) - and you get the recipe for resisting the bursting bubble right up through the first half of 2008.

Local Realtors know that the supply side of the equation is not likely to change drastically. There are simply no homes being added in close-in Silicon Valley unlike, say suburban Phoenix.

Inventory of available single family homes in Palo Alto, CA compared with Paradise Valley, AZ. 90-day rolling averages. Data as of October 3, 2008

So the recipe depends on capital-gains-wealth-driven demand.

And guess what? Year to date for 2008, both GOOG and AAPL are down by half. In the last 9 months or so, $15 billion of local wealth in just those two stocks has evaporated.

The bubble burst has only started to hit us.

[note: I am aware this is an over simplified argument. Home prices do not correlate with the movements of any one stock. We've checked. In some of these markets, they do correlate with movements in the NASDAQ as a whole, and we all know this isn't an isolated dip.]