So ya don't want to hear about my geek league team eh awgee?! I've been beset by injuries so there isn't any good news to report anyway...
I think the February escrow spurt has produced a greater number of closings during March relative to the past six months and likely established a short-term floor on pricing at around the mid 2004 level. I expect this increased pace of buying to translate into slower month-over-month price declines relative to the previous six months for the months of March and April at least. I don't know if that will show up in the CS figures since they are MSA wide though. If I had to guess, I'd venture that my Irvine CS average will probably be down to around 200 (4% or so) by the end of Q2.
A good-sized chunk of inventory has been taken out as evidenced by the 3/31 inventory figure for Irvine which is essentially the same as it was a quarter ago on 12/31... As a result, we have perhaps six months of inventory on the market in Irvine which most would agree isn't likely to drive prices down by the 3+% they have been averaging of late. Last year during Q1, there were over 200 homes added to the inventory count in Irvine. Sales were more brisk then, but I can imagine March and April sales figures of perhaps 20-30% below year-over-year figures. With possibly 15-20% less inventory on the market year-over-year during the next couple of months, I'd think price declines will definitely have to flatten in the short-term.
The wildcard is the REO inventory and pending REO inventory. The first swath of REOs got our declines rolling, mostly in the condo, older SFR segment, and 2005 and newer neighborhoods. Once the new year started I think the banks got more willing to clear their NPA. That has spilled over into the general Irvine market to some degree but many neighborhoods haven't felt the pinch yet since they haven't competed directly with REOs or quite possibly have been sitting on a good chunk of equity and wishing for recovery. Westpark is a good example of that IMO. If the seriously increased pace of NODs over the past few months translates in great proportion into must-sell Irvine inventory beginning this summer, I think our next leg down on prices could start then. Feels like we are stair-stepping down to me...
That's my two cents for tonight.
