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There’s an article in today’s Tribune about the local housing market. One problem with this article is that it reports median house prices for a particular month (December in this case) and compares it to last December. Since the number of sales is so low right now, the median home price fluctuates a lot from month-to-month, depending on how many high-end sales there has been. It also reports that the city of SLO had a 9.3% increase in home sales which makes it seem like SLO is doing better than most areas. But, if you look at the Months of Inventory on the http://www.slowatch.com/ site, you’ll see SLO was doing better in the Summer/Fall but now has caught up with most the rest of the area in regards to months of inventory. I calculate median home prices on a quarterly basis (will be updating 4th quarters tonite) to try to get a better view by using more data but that number even fluctuates a lot.

Another item mentioned in this article is that the number of Realtors contributed to the housing slump starting in 2005. Huh?? I don’t understand how that can be a factor. It would seem like more Realtors would be better to generate sales volume as new Realtors would be pressuring friends and family to buy or sell once they got their license.

The article states that the average number of transactions a Realtor in California handles in a year is now under 4. I took a look at the number of total Sold transactions for the Central Coast for 2007 and multiplied it by 2 (2 sides of every sold tranaction- buyer and seller). The total was 8,350.

Using 2,800 Realtors on the Central Coast (doesn’t count agents with a license and not a Realtor) calculates to 2.99 transactions per Realtor. I don’t know if that is what is meant by “average” Realtor in the article.

The reality is around 20% of Realtors do 80% of the business (haven’t verfied if this figure is close but I’ll assume it for this calculation). If you take the Total Transactions for 2007 and redo the calculations you find that 80% of Realtors on the Central Coast had 0.59 transactions in 2007 (which is less than even one transaction).

Yes, there’s a lot or Realtors on the Central Coast and the slowdown in the number of transacations means that the majority of Realtors had one or no transactions in 2007.

With the slowdown in the market, we’re going to see fewer Realtors making real estate a full time career.

Written by Keith Byrd - Go to Keith's Website/Profile