VV Market Condition Report
All major areas around the Victor Valley market are performing in the negative when compared to the same time period last year. As an example, the San Diego market is currently returning a -18% result. Las Vegas posted a -30%. The Desert Area (Palm Springs-Palm Desert) posted a -25%. With the onset of the spring-summer market cycle it would be reasonable to assume this relatively large gap noted above would begin to close. However, the differential between Victor Valley (12-20 points) and other areas is significant and will require a major market rally to resolve. Motivated sellers should have no illusions that with each passing day there is an increased probability of equity erosion. The reader should review the MCR graph (HISTORY OF MEDIAN PRICE 2005-2007) that demonstrates the market peaked in terms of median price in May-June 2006.
MARKET QUICK LOOK
The resale market has slowed since the last report. This is somewhat unusual and out of step when compared to other areas surveyed. Current supply (LISTED) up from last report. Demand (SALES PER MONTH) continued to decline.
Failures declined also. Consequently, PERCENT SELLING (market efficiency) rose by 1 point to 26%. The 60 DAY ABSORB RATE (market speed) declined by 2 points while DAYS SUPPLY increased to 523 days.
LIST PRICE ALL weakened to $357K while ASK AT OFFER and CLOSE PRICE both posted a negative of -$1,000 from the last report. Inventories of sale pending also declined from last report.
The reader should expect a continuation of price weakness with an indicated current limit of $299,950 (current closing price is $303,000). The "Indicated Current Limit" of prices is established by the current median price of pending property. When this price lies below current closing price, there is a high probability that future closing price will decline to the indicated limit unless positive price events intervene.
Strongest Sub-Market: Phelan at 35% selling, 21% ABSORB RATE, with DAYS SUPPLY of 296 closing in 135 days at $285,000.
Weakest Sub-Market: Oak Hills at 16% selling, 6% ABSORB RATE, with DAYS SUPPLY of 967, closing in 104 days at $570,000. This sub-market is exceptionally slow and lethargic.
MCR TIP
PERCENT SELLING measures market efficiency. If each time a property listed it closed, the market would be operating at 100% efficiency. However, 100% efficiency on a market basis is never achieved. Outcomes other than closing await a listing. These are contract expiration, withdrawal or cancellation. These outcomes can be grouped and called "Failure." PERCENT SELLING does not consider listing as an outcome. Listing is a condition. A listing has neither closed (success) nor failed (failure). In other words, the market has not yet rendered judgment while a property is listed. As the market moves to the seller, PERCENT SELLING increases but never reaches 100%. As the market moves toward the buyer, PERCENT SELLING declines, but never reaches 0%.
