All Forum Posts by: Steven S.

I have a lot of residential market data for California and recently put this together, quite shocking!

Developer #1 & #2 are competitors who both buy projects at a 20% estimated return level. They do the same fix & flip projects, produce the same quality, in the same 6-7 month timeframe. 

Their key difference: Developer #1 buys in Q4-Q1 (October to March), Developer #2 buys in Q2-Q3 (April to September).

Who do you want to be, Developer #1 or #2?

Of course Developer #1, it's all based on the market's $/sf appreciation, which is quite cyclical in the Los Angeles area:

Developer #2 yields under 1/2 of what #1 yielded, simply due to when he decided to buy his properties:

I'll leave you with a few more Los Angeles-area overlays where you will see the same thing (the above are all for Sherman Oaks 91401):

Don't forget the last leg of the data is not fully-representative, they fill-up as transactions occur. So the market is not crashing, I made this in early October so there were barely any Q4 closes:

Do you think this applies to your market? Do you already buy during this time?

In the San Fernando Valley & West-LA, it looks like if you were Developer #1 you could have just bought the fixers in Q4-Q1, done nothing, put them on the market Q3 (listing-only MLS service or something), and make at least ~10% every time with no work done (more than enough to cover the carry). After how many years of this pattern would you bet on it?

@Chris Morris by the way the new access keys are

LA/Ventura data: your_best_friend

SF/Bay Area data: robby the man in sf

SD/SoCal data: tommy the man in socal

Quote from @Chris Morris:

Quote from @Steven S.:

The market has done well since posting! Price & absorption steady/picking up in Los Angeles, San Diego, and San Francisco:

Isn't absorption decreasing?

Absorption is still down from normal, although it has mostly leveled off or showed small signs of growth (definitely not continuing its drastic decline), alongside a pretty steady growth in $/sf across all 3 markets. 

I know the charts look like they go down at the most recent Q, but that is because the transactions for that Q have not finished yet (Q4 in LA for example, see the below gSlides I made). Also, SD & SF hasn't been updated since Q3 '23, so no Q4 results are there, just no clients to keep it updated for, and I have little personal gain/use from this data, might update them once Q4 finishes). I was thinking of adding some predictive % filled algo to plot the unfinished Q's current absorption performance (estimating the outcome/performance based on the current performance) and plotting that, but it felt speculative and not in line with the raw-data approach this app uses. The $/sf average is already accurate at showing the current Q's $/sf performance compared to the last Q's, because it just averages the closed $/sf of transactions that have occurred--it just may be drastically higher/lower until enough transactions have occurred to balance it out.

To clarify chart reading and the data provided/plotted, I made this short slideshow, flip through it to be certain you are properly analyzing the charts. Some developer insights re market timing in there too:
https://docs.google.com/presentation/d/1Dut9OpqZHzwGeYlStU-g...

How would you plot the absorption of the current Q if this was your app? (I removed it, thought of estimating it, and decided on 'fill up' as described above)
And did the slideshow change your opinion of the charts/market performance?

Hi Carlos, thank you for checking it out and providing feedback! If you can clarify which part of the program and time period you are referring to, I will be able to better figure this out.

First, there is no 'Absorption Rate' calculation, my program only reports the total absorbed per Q, and it is an integer, not a % rate. There are 2 methods of using my program to examine total absorption, I am not sure which you are using to arrive at your conclusion.

Method 1: If you are using the dashboard (entering City/Zip and pressing Go), the %'s you are seeing are the % difference from the last Quarter or Year, so they would be different for every City/Zip Code (one zip code absorption increased 90% and another only increased 30%).

Method 2: If you are using the Statistics Menu options below the Dashboard and generating charts for your specific City/Zip, the SF/Bay Area was last updated 9/29, so it has most of Q3, and no Q4 transactions:

So if you were generating charts for a Specific City/Zip with the 'Rental Data' or 'Sales Data' radio inputs below the dashboard, and looking at the Q4 total absorption of the Bay Area (or a Zip Code in the Bay Area), the issue you replied about makes sense, the data is simply missing.

If you could please clarify I will look into it and report back, thanks

Market update on LA, SD, & SF in California:

The market has done well since posting! Price & absorption steady/picking up in Los Angeles, San Diego, and San Francisco:

Quote from @Christian I Presant:

...I'm talking about showing population growth of a certain area, job growth, average salary, average age, history of average home price going back 10+ years. how much different areas have appreciated YTD. Is there a website that has all this info?

Most of what you described (bolded above) is Demographic Data. For this, Datausa.io is great, see Los Angeles for example: https://datausa.io/profile/geo/los-angeles-ca Also, SocialExplorer is also an amazing tool for demographic data, you might need to pay for it though to get the metrics you really want.

The last thing you mentioned, Average Home Price, is a Market Analysis metric. You would be interested in $/sf, average DOM or days-on-market, absorption, etc. all over time as well. These are hard-indicators compared to the demographics above, things that allow you to make decisions now, whereas demographics mostly come into play on large or long projects. For this, I built my app runcomps, click on my profile to pull up my post, it only has California data, but produces charts that I need to fill in my underwriting models quickly. Other providers are Zillow Snapshots of the market you want, or Redfin market reports, but they suffer from averagitis

Quote from @Robert Schwenkler:

Quote from @Susannah Nation:

Quote from @Robert Schwenkler:

Quote from @Trevor Richardson:

(NAR) National Association of Realtors has some of the best real estate data that nobody knows about. Their SFR quarterly (ranked) median home sales data is unparalleled. Their source is all MLS data pulling from coast to coast, it's fantastic.

Great, thanks. I'm especially interested in market specific data, but this looks great. I'll definitely dig in.

I see their Research and Statistics area... is this what you're referring to? I'm not sure if there's additional data that normies like me who aren't realtors can't access?

Thanks to Trevor's tip, I drilled down and was able to find this link on the NAR site to market-specific reports:

https://www.nar.realtor/resear...

and https://www.nar.realtor/resear...

Ah, cool. I hadn't had the chance to dig deeper into the NAR website. Thanks for the pointers.

I'm honestly a little unclear what I'm looking for exactly as I'm still getting a handle on what info is available and what is useful to me. But things like month/month data for DOM, list price, inventory levels...

I know that some of this is available on Realtor.com, etc, but I was curious about a platform that is more oriented toward professionals.

I'll keep digging into the NAR website. Thanks!

I made my own tool to track these residential market analysis metrics, but since I only work in CA they are strictly for the Los Angeles/Ventura & San Francisco/Bay Area markets. You can use it for free, click my profile to pull up my post & guide on how to use my app. You can compare every city/zip in Los Angeles or San Francisco against one another, or you can drill down into a specific city/zip in LA or SF to pull detailed market metrics on just that city/zip. It's what I use to achieve your stated goal in the markets I partake in. Things like $/sf, absorption, DOM, $/sf by market-tier, and so on, over time.

Quote from @Sara Malka:

Hello frinds.. 

As a foregin investor, what tools/websites can you recomend me to use for checking out area and neigborhoods class? Beside talking with agents, and google maps..

I assume you are talking about the investment class of a neighborhood/city/zipcode from a residential real estate investor's perspective. The market reflects this class in the $/sf of transactions that occur in that neighborhood/city/zipcode. For example, Beverly Hills (and all the zip codes in Beverly Hills) have a much higher $/sf than Reseda (and all the zip codes in Reseda). That's one major way to detect class, and you can detect it by looking at sold homes on RedFin and looking at the sale metrics.

Aside from $/sf, investment class is also derived from absorption, days on market, as well as demographic factors such as median income, age, educational attainment, and so on (demographics are much more speculative than market analysis metrics like $/sf, absorption, DOM, etc).

I made my own tool to track these residential market analysis metrics for me, but since I only work in CA they are strictly for the Los Angeles/Ventura & San Francisco/Bay Area markets. You can use it for free, click my profile to pull up my post & guide on how to use my app. You can compare every city/zip in Los Angeles or San Francisco against one another, or you can drill down into a specific city/zip in LA or SF to pull detailed market metrics on just that city/zip. It's what I use to achieve your stated goal.

After feedback here and elsewhere, I realize developers already have a method of acquisitions that works for them. I made a tool for developers to use in acquisitions, people who are doing and making decisions that matter constantly. Those two don't mesh very well, lots of friction & seemingly pointless on their-end to try and change what they are already doing since it is working. But that's who it is really built for. So from this app's/product's perspective, it's either best for a new-to-the-game flipper/wholesaler, or developers who want to get more efficient and scale their internal ability to review property & the respective market confidently, they will be highly interested and have near-frictionless interactions.

I realize these two options yield a small market for ample & proper use. My question to the developers on here is: Do you check the market before buying, and if so, how do you do it?