Market Stats so Scary they were Released on Friday the 13th

The local Vancouver Clark County Real Estate market report, as generated by RMLS, came out Friday the 13th of all days,and whether you are a Triskaidekaphobiac or not, these were some scary numbers.

While Months of Inventory (of houses for sale) was down January to February, it was up year-over-year/February. There’s enough real estate data points, ratios and percentages to give anybody wiggle room to spin this report. Really, with enough paint, you can paint this report any color you’d like… as for me, my favorite color has always been transparent.  I know lots of folks can simply throw out the numbers. And while that is the easiest way to get information into the public’s eye, I prefer to dig a little deeper and look at those same numbers from multiple, transparent, perspectives.

Most importantly, where will the Vancouver Clark County real estate market go from here? As a reminder, Months of Inventory (MOI) is defined by dividing the Active Listings at the end of that month by the Number of Closed Sales during that month [Active/Closed]. In my humble opinion, MOI is a key indicator of where we are at and where we are going.  Says something about supply and demand.  I guess that’s important economic mumbo-jumbo.

With MOI in the Vancouver Clark County real estate market standing at 18.6 months in February, it was a 11.4% decrease in MOI from January (yay!), sounds good right?  Sure, but February historically has a decrease in MOI from January.  Problem being that when you consider the average MOI decrease over the past two years from January to February was more than 17%, it doesn’t smell as pretty. Basically, while we decreased MOI January to February, we did it at a slower than historical rate.  In technical jargon, that’s called a bummer.  Still with me?

OK. So we get that the reduction in MOI was slower January to February this year than in the past, that’s just one number.  While I agree, lets continue digging.  Unless you’ve been living under a rock (whereby you’d have little concern about the time it takes to sell a house) you know that MOI has been increasing year over year for the past three years.  More importantly to me is the rate of increase.  For the last four months of 2008, the average year-over-year increase in MOI was 21.2% – that by itself is a BIG number.  Problem is that in January, that number grew to 23.5% and in February, it was 27.4% – Yikes!  While the Law of Large Numbers says it can’t go on this way forever, the year-over-year MOI number is still expanding. Not a good thing.

Back to my question… where do we need to go from here?  Please understand, I bought my crystal ball off of eBay, so I’m not saying its perfect.  But here’s what I’d look for in the March report.  I’d like to see the MOI for Vancouver Clark County in the 14.6-14.9 range (or less, of course!).  One, that would gain some positive traction for decreasing the historical February to March MOI reductions; and two, that would reverse the trend of expanding year-over-year percentage increases back below the number from the past three months. Now really, while I’d like to see that number at about 7.5, I’d simply take movement in the right direction for  now.

I know, them there’s a lot of numbers. And while I may come across as the boogie-man on a scary Friday, I really do think we are searching for a bottom. I talked before about not buying the rah-rah hype.  But, I believe we are finally closer to the bottom than we are the top. The last three offers I’ve written for clients all had multiple offers on the house. Pricing numbers are well on their way to returning to the historical trendline. We’ll likely continue to have an influx of short-sale and repo/REO inventory that will keep a lid on an explosive bounce from the bottom, but if trading stocks for six years in a previous life taught me anything, I know that no one rings a bell when it’s time to buy.

So while it may be scary out there, it’s always darkest before the dawn.

Vancouver Real Estate Market Cools… Inside the House

While I’m not about to equate showing houses to the physical hazards of, say, working on an oil rig or handling nuclear waste, the upcoming cold streak and the number of vacant houses without electricity are going to make for some interesting real estate showings in the Vancouver and Clark County market this next week.

One of the things I tell my home selling clients all the time is that we want the buyer to stay as long as possible during their visit. Heck, hope they pull up a chair and start redesigning the kitchen and then measure the living room to see if their sectional will fit.  All this bodes well for the seller, as the potential buyer starts to see how this house can become their home.

But, when it’s near freezing inside, well the warm and fuzzy feeling that’s hoped for fades and becomes a wanton dash for the car’s heated seats. (And, yes, that is a REAL picture I took from inside a house here in Vancouver during a showing last week…).

I understand – especially with some vacant short-sale and pre-foreclosure listings – the home may not have power. But if a seller, be it a bank with a REO property or a homeowner trying to salvage a sale before the worst-case scenario kicks in, really wants to enhance the opportunity to sell the house, spend a couple of bucks a month to at least keep the temps above the point where Jello sets.

I’m not asking for the staged smell of fresh-baked cookies, but the ability to hold an indoor conversation without the chatter of teeth and a serious concern for the onset of frostbite would be helpful.

Until then, I’ll make sure I have my new real estate agent showing toolkit – a lockbox key, my parka and a portable heater – for this weekends showings. Of course, if you’re looking for a hot deal in the Vancouver Clark County real estate market, let us know… we promise our service won’t leave you IN in the cold.