Wednesday, April 26, 2006

Marin Heat Index

The "Marin Heat Index" is currently lower than where we've seen it in a very long time. My thanks go out to a reader for the "heads up".


Here is that realtor's write-up of what it means to him (minus the speculative stuff):

Recently, Marin real estate experts have been saying that our local market is again becoming a Sellers Market. This is not true.

In recent days new sellers have entered the market in large numbers, while buyer activity levels have dropped. The Marin real estate market has made a very sudden and very sharp course adjustment. The Marin Market HEAT Index (MMHI)has declined by 21% in just eight days. It now stands at 0.76. This MMHI level indicates a Buyers not a Balanced, and certainly not a Sellers Market.

In eight days:

  • The MMHI has declined from 0.96 to 0.76;
  • The number of available homes for sale rose by 14%;
  • The number of homes in contract to be sold declined by 9%; and
  • The number of closed sales declined by 2%.

Simply put, this means the number of sellers is increasing, while buyer purchases are declining.

It's nice to see a Marin realtor actually call it the way it is.

And then there is this gem (referring to the report (warning - PDF) that indicates an increase in new-home sales):
Let me get this straight: Mortgage and interest rates are on the rise. Household finances are also being pinched by record gasoline prices. Yet somehow, Americans have all of a sudden decided to go out and buy a whole slew of new homes?...

[Why? It's because of price reductions.]

...What does this mean? While demand for new homes may be up, this is clearly turning into a buyer's market.

So if you're in the market to purchase a new home, wait. If you show some patience, chances are home sellers will be putting their properties in the discount bin.

2 Comments:

Blogger fredtobik said...

Heat index? I thought it was getting warmer since the rain stopped. Shot a 88 at Peacock last weekend, got a little burn on my neck too.

Location Location Location

Apr 27, 2006, 10:12:00 AM  
Blogger randolfe said...

The HEAT Index breakdowns by city seem odd. Shows Mill Valley at 1.66 and Corte Madera at 2.00, and the price breakdown shows 1.5M-2.0M homes at only 0.58 and 1.0M-1.5M at 1.14.

These numbers don't logically add up given the listed inventory breakdown for these two cities. Actually, looking at the price band numbers, I wonder if there's a basic "addition of averages" type of error in how this is computed.

I couldn't find any datasets or descriptive summary stats to determine this myself. Anyone know?

--Randy H (www.capitalism2.org)

Apr 27, 2006, 10:26:00 AM  

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