Happy Holidays to all! I would like to start making some more general commentary on the site here, and will make an effort to do so in the the new year, once I get settled into a little better pattern. There is a lot of economic news that I think warrants our attention, and is probably a little more directly linked to the land market then the techy MLS stats that I riff on currently, but I do see this topic as one of the leading indicators for the land market. I will try to get to some of those topics in the future. For now, here are the stats for the week.
Pending Sales: 3,828 ( -118 from last week)
Pending + AWC 4256 ( -119 from last week)
Closed Escrows: 819 ( +273 from last week)
Active Listings: 55,863 ( -473 from last week)
Okay, just a few observations. We are right in the middle of the Holiday season, and that has a lot of effect on the numbers. Interestingly, most of the numbers we are looking at here are doing the right thing. The closed escrows last week was a little bit of a surprise. The pending contracts is down, but it also is not down as far as the increase of closed escrows, meaning there were new contracts replacing those that sold. A good sign. It is also nice to see that the active listings is sliding with some consistency now, whether people are just taking homes off the market or we reached some apex in over-supply, and are now coming off that number permanently, I am not sure, and will not likely know until sometime in first quarter. Still, I think the highest number of actives that I recorded was 57,940 this fall, and we have fallen 3.5% below that total. Not a huge drop, but a 3.5% drop in traditionally the worst quarter of the year gives me some hope. This is where we might start seeing some better looking number in first quarter. An increase in sales to 5000 a month means we could start seeing a reduction in the supply from a 17 month supply to under a 10 month supply within first quarter. The supply burn rate at 5000 homes could go from a 1000 a month to 3000-4000 a month, getting us down into the 40,000's, which would be the harbinger of equalizing the market. This is not an overnight process, but if we can come out of first quarter in the 40,000-45000 actives, I think we could start breathing again. Those are my thoughts on the matter.
Tuesday, December 18, 2007
Tuesday, December 11, 2007
12/03/07-12/09/07 Weekly MLS Statistics; land investing article...
Good Morning!
First week of December figures are out. Nothing exciting; these are typical of the past few months, which are typically sluggish. The amount of pendings and new contracts is likely to slow down, as we don't see a lot of closings planned before the end of the year. I like that they are holding pace with October/November Sales. If December can hold its ground, than we can expect First quarter to be better.
Pending Sales: 3946 ( +112 from last week)
Pending + AWC: 4375 ( + 89 from last week)
Closed Escrows: 546 ( -614 from last week)
Active Listings: 56336 ( -113 from last week)
Closed escrows is always down after the end of a month, so nothing to get excited about. Its actually not a bad number. The pending have risen, so that is showing some positive momentum going into the late holiday season. The amount of Active listings is sliding a bit, which is encouraging, but that number could shoot up after the first of the year when many homes go on the market traditionally, so I am a little guarded about that one. We have shaved well over a 1000 listings in the last two weeks, though, so it is good, if only temporary news. However, as first quarter is traditionally a stronger buying period, home sales could start eating away at the listings, even if there is a little bit of a rush of homes to market in January. I do think that much of the surge of homes has already hit the market, so we may not see any surge at all. Its hard to tell, though, about the mortgage problem. Hopefully we have seen the worst of the listing surge.
I also found this article very interesting....it is interesting that we are seeing news about these things now. I do think that there will be land buyers out there testing the waters again in early 2008. They will be looking for the best deals they can find, of course, but I do think we will start seeing some activity, if home sales continue to strengthen in the early parts of first quarter.
New home builders will recover first, as I have said. The sales for the year are lagging 2007 substantially, especially due to a poor third quarter, but the sales have been consistent, and it looks like that was maybe the baseline for sales, and we will see that number go higher in the new year, as prices and mortgage rates have fallen substantially, and mortgage availability is a little more consistent again, at least for entry level priced homes.
First week of December figures are out. Nothing exciting; these are typical of the past few months, which are typically sluggish. The amount of pendings and new contracts is likely to slow down, as we don't see a lot of closings planned before the end of the year. I like that they are holding pace with October/November Sales. If December can hold its ground, than we can expect First quarter to be better.
Pending Sales: 3946 ( +112 from last week)
Pending + AWC: 4375 ( + 89 from last week)
Closed Escrows: 546 ( -614 from last week)
Active Listings: 56336 ( -113 from last week)
Closed escrows is always down after the end of a month, so nothing to get excited about. Its actually not a bad number. The pending have risen, so that is showing some positive momentum going into the late holiday season. The amount of Active listings is sliding a bit, which is encouraging, but that number could shoot up after the first of the year when many homes go on the market traditionally, so I am a little guarded about that one. We have shaved well over a 1000 listings in the last two weeks, though, so it is good, if only temporary news. However, as first quarter is traditionally a stronger buying period, home sales could start eating away at the listings, even if there is a little bit of a rush of homes to market in January. I do think that much of the surge of homes has already hit the market, so we may not see any surge at all. Its hard to tell, though, about the mortgage problem. Hopefully we have seen the worst of the listing surge.
I also found this article very interesting....it is interesting that we are seeing news about these things now. I do think that there will be land buyers out there testing the waters again in early 2008. They will be looking for the best deals they can find, of course, but I do think we will start seeing some activity, if home sales continue to strengthen in the early parts of first quarter.
New home builders will recover first, as I have said. The sales for the year are lagging 2007 substantially, especially due to a poor third quarter, but the sales have been consistent, and it looks like that was maybe the baseline for sales, and we will see that number go higher in the new year, as prices and mortgage rates have fallen substantially, and mortgage availability is a little more consistent again, at least for entry level priced homes.
Monday, December 3, 2007
MLS WEEKLY SALES NOV 26-DEC 2
Weekly MLS STATISTICS Nov 26th- Dec 2
Pending Sales 3834 ( -361 from last week)
Pending + AWC 4286 ( -415 from last week)
CLOSED ESCROWS 1160 ( +597 from last week)
Active Listings 56449 ( -929 from last week)
This week only tells us a few things. This was an end of the year week, so the number of sales would be relatively high. They were higher than I expected which led to an excellent finish for November Sales of 3277. The amount of pendings is down, as is normal when a large amount of closings occur. The number of new AWC's shows a healthy number of new contracts. December is not expected to be a strong month for sales, but so far is shaping up just like November, which was really better than expected. Not exceptional, but getting better. Even better, there was a significant reduction in the amount of Active Listings, over 900 less. That shows that the tide of homes going on the market is lessening, and maybe just maybe that number can start coming down. If we see that number under 50,000 by the end of January, we can start talking about a recovery trend. It is still a little premature to talk about that yet.
Pending Sales 3834 ( -361 from last week)
Pending + AWC 4286 ( -415 from last week)
CLOSED ESCROWS 1160 ( +597 from last week)
Active Listings 56449 ( -929 from last week)
This week only tells us a few things. This was an end of the year week, so the number of sales would be relatively high. They were higher than I expected which led to an excellent finish for November Sales of 3277. The amount of pendings is down, as is normal when a large amount of closings occur. The number of new AWC's shows a healthy number of new contracts. December is not expected to be a strong month for sales, but so far is shaping up just like November, which was really better than expected. Not exceptional, but getting better. Even better, there was a significant reduction in the amount of Active Listings, over 900 less. That shows that the tide of homes going on the market is lessening, and maybe just maybe that number can start coming down. If we see that number under 50,000 by the end of January, we can start talking about a recovery trend. It is still a little premature to talk about that yet.
November MLS Sales
November sales figures are in, and they offer some encouraging signs. They are not as good as October, as expected, but as of Monday night, when most closings should have been reported for November, closed sales tallied 3,277 homes in the MLS system. Somewhat less than October, but a better finish than I had hoped from last week's tally. I do think December is going to be slower, but November sales do show that our market has some resiliency, and while me may not know until after January whether thinks are going to continue improving, I am starting to believe that the worst may be over.
Thursday, November 29, 2007
Some additional encouraging news...
In an article in the sometimes under appreciated East Valley Tribune, it is noted that builders in the Valley continue to shed inventory, by selling about twice as many homes as they are pulling permits for. It is short term painful for all in our industry, whether you have land to sell, or do drywall, or are an engineer. The builders are correcting their oversupply, and October Sales new home sales, while not flashy at 3159, registered the highest number of sales in 7 months. Not a huge number, by an means, but a good solid stable number. I don't think anyone expects that November new homes sales will match october, so we might have a let down there, but overall, we can start to see where builders may be in a position of recovery if demand for new homes at newly affordable prices, I might add, hold up. The word is still out on November resales, and whether they can hold much of the momentum of a decent October.
I tend to focus on the broad home sales numbers a lot, which may not directly interest those of you interested in land sales, but it has a huge tie-in. One, this new home sales number is a great indicator whether or not builders will be buying land in the near future. The fact that they are slowing permits down means that they are also going to be slowing down buying new land to dispose of lots they already own. This is a negative obviously for our industry, as it is slowing our sales down massively. But, the light at the end of the tunnel is that the builders are making headway, and should be back on track to buy dirt as they deplete what they have. It is big ship, and it takes time to turn, but as I have said many times on this blog, the builders have pricing power, and have the ability to turn it around before the resale owners do, to a large extent. Buying new homes for reasonable prices, as opposed to resales at higher prices, is what convinces many first time homebuyers to get in the water, in my opinion. Well, the 2005 market killed that, when new home prices were driven through the roof. Builders have recognized this and are marketing homes at some pretty fair deals for consumers, and will continue to do so, until the demand catches up. There is light for our market in 2008, as long as there are no further surprises in the credit markets.
I tend to focus on the broad home sales numbers a lot, which may not directly interest those of you interested in land sales, but it has a huge tie-in. One, this new home sales number is a great indicator whether or not builders will be buying land in the near future. The fact that they are slowing permits down means that they are also going to be slowing down buying new land to dispose of lots they already own. This is a negative obviously for our industry, as it is slowing our sales down massively. But, the light at the end of the tunnel is that the builders are making headway, and should be back on track to buy dirt as they deplete what they have. It is big ship, and it takes time to turn, but as I have said many times on this blog, the builders have pricing power, and have the ability to turn it around before the resale owners do, to a large extent. Buying new homes for reasonable prices, as opposed to resales at higher prices, is what convinces many first time homebuyers to get in the water, in my opinion. Well, the 2005 market killed that, when new home prices were driven through the roof. Builders have recognized this and are marketing homes at some pretty fair deals for consumers, and will continue to do so, until the demand catches up. There is light for our market in 2008, as long as there are no further surprises in the credit markets.
Tuesday, November 27, 2007
MLS STATS 11/19/07-11/25/07
The Thanksgiving Holiday week stats are in; nothing unexpected. A little short on sales, as the week is not a popular one for closing escrows. We will see what the last week brings. The last week could peter out a bit, and we could end up with poor sales for the month, but let's hope not. There is an article out today about national home prices being down, but the home price level being down was just about a given in a market that we are experiencing now. Home prices come down to attract buyers, and that is what is happening. Many, many of the homes on the market (not to mention land) is significantly over-priced to sell in the current market. It does not help. Here are the numbers for the week.
Pending Sales: 4195 ( -4 from last week)
Pending Sales + AWC 4701 (+5 from last week)
Closed Escrows 563 ( -232 from last week)
Active Listings 57378 ( -389 from last week)
Month to Date Closings 11-1-07-11/26/07 2265
A couple of notes on these numbers. Obviously active W/contingency contracts are holding up, even slightly better, but just slightly. Still, that is positive considering the season we are in. Sales are down from last week, but it was a short holiday week. The pace of the last week of the month's sales in October was 1200+, and I am not sure we will see that number, but something approaching 800 would put in us very acceptable territory for November. A 1000+ would be a nice surprise. We will just have to wait and see if we finish November strong. At least we are holding up though, as November could have been reasonably expected to be a lot worse.
Pending Sales: 4195 ( -4 from last week)
Pending Sales + AWC 4701 (+5 from last week)
Closed Escrows 563 ( -232 from last week)
Active Listings 57378 ( -389 from last week)
Month to Date Closings 11-1-07-11/26/07 2265
A couple of notes on these numbers. Obviously active W/contingency contracts are holding up, even slightly better, but just slightly. Still, that is positive considering the season we are in. Sales are down from last week, but it was a short holiday week. The pace of the last week of the month's sales in October was 1200+, and I am not sure we will see that number, but something approaching 800 would put in us very acceptable territory for November. A 1000+ would be a nice surprise. We will just have to wait and see if we finish November strong. At least we are holding up though, as November could have been reasonably expected to be a lot worse.
Monday, November 19, 2007
MLS Resales 11/12/07-11/18/07
Resale numbers for the past week are in. There is nothing spectacular to report, other than the numbers are showing some resiliency at slightly better levels than had been prevailing as of late.
11/19/07 Pending Sales: 4199 (+0 Change from last week)
11/19/07 Pending + AWC 4696 (+8 from last week)
11/12-11/18: Closed Escrows 795 (+288 from last week)
11/19 Active 57767 (+192 from last week)
The number of sales is interesting; this is a middle week of the month, but the number of sales is actually pretty strong compared to normal. The other interesting thing is that the number of AWC contracts is 496; it is about 10% higher than what I normally see. The total number of escrows is equivalent to normal, but as I have said, if November sales equals October sales, I will be fairly enthused. Right now, we are on a good track, but this week's sales are likely to slow down due to a holiday week. As of now, we are tracking fairly close to October sales. The number of actives continues to oscillate in the 57K's, a number I would like to see start falling. Even with increasing sales, the number of homes going on the market is not falling.
11/19/07 Pending Sales: 4199 (+0 Change from last week)
11/19/07 Pending + AWC 4696 (+8 from last week)
11/12-11/18: Closed Escrows 795 (+288 from last week)
11/19 Active 57767 (+192 from last week)
The number of sales is interesting; this is a middle week of the month, but the number of sales is actually pretty strong compared to normal. The other interesting thing is that the number of AWC contracts is 496; it is about 10% higher than what I normally see. The total number of escrows is equivalent to normal, but as I have said, if November sales equals October sales, I will be fairly enthused. Right now, we are on a good track, but this week's sales are likely to slow down due to a holiday week. As of now, we are tracking fairly close to October sales. The number of actives continues to oscillate in the 57K's, a number I would like to see start falling. Even with increasing sales, the number of homes going on the market is not falling.
October Resales -Are up better than I reported according to AZ Republic
you may recall that I was doing a comparative analysis with someone else's calculations used by the AZ Republic as their official number, and that they may come out higher than I reported for October. That report is in, and you can find the details at this article in the AZ Republic. Basically, they did show up better than mine, and although the Republic downplayed the increase as minor, it was 18% higher than September Sales. From about 3090 sales to 3600+ sales. This is important, as the market seemed to ripe to regress. Therefore, it was an especially nice increase from September. The fact that prices were down a bit is actually okay; it shows there are buyers when prices are realisitic. The article makes a big deal out of this, but in all the trends that could happen, home values retrenching a bit is not the worst one. A lot of people inflated the value of their home, and they probably shouldn't expect to "get" their inflated asking price. I know their are people who simply in their home for too much money, and my heart goes out to them, as they can't sell it, but as an overall trend, a slight turndown in pricing is not the end of the world. We need the market to be affordable to first time homebuyers, because withou them, the market will not recover.
Here are a few bits of news from last week.
1. Mortgage applications were up 5.5% last week. Applications mean more people are intending to buy, or at least refinance, which can also be a positive, as it shows someone who may not be putting their home on the market if they can refinance.
2. As lousy a month as November and December typically are, we seem to be on a fairly decent pace for sales in the next 30 days. New contract numbers are showing to be just as strong if not stronger than September and October, and assuming those numbers hold up, November won't be the disastrous month many thought it might be. The numbers look very similar to October, and that would be a victory at this point. I will have more on this when I do my weekly update.
Mortgage rates can be found as low as 6.19%. That is close to historic lows, and people can buy with advantageous financing, if they are qualified. Jumbo loans and subprime may still be difficult; I don't work in that industry, so I don't know for sure, but I have been told that the run of the mill mortgage is still easily obtainable for qualified parties.
I will check in tomorrow with the past week sales performance.
Here are a few bits of news from last week.
1. Mortgage applications were up 5.5% last week. Applications mean more people are intending to buy, or at least refinance, which can also be a positive, as it shows someone who may not be putting their home on the market if they can refinance.
2. As lousy a month as November and December typically are, we seem to be on a fairly decent pace for sales in the next 30 days. New contract numbers are showing to be just as strong if not stronger than September and October, and assuming those numbers hold up, November won't be the disastrous month many thought it might be. The numbers look very similar to October, and that would be a victory at this point. I will have more on this when I do my weekly update.
Mortgage rates can be found as low as 6.19%. That is close to historic lows, and people can buy with advantageous financing, if they are qualified. Jumbo loans and subprime may still be difficult; I don't work in that industry, so I don't know for sure, but I have been told that the run of the mill mortgage is still easily obtainable for qualified parties.
I will check in tomorrow with the past week sales performance.
Tuesday, November 13, 2007
MLS STATS 11/05/07-11/11/07
MLS data 11/5/07-11/11/07:
Pending Sales: 4199 (+243 From Last Week)
Pending + Active W/Contingency: 4688 (+282 from Last Week)
Closed Sales: 507 ( -523 from Last Week)
Active Listings: 57575 (+335 from Last Week)
The data for the week shows a couple of things. The sales numbers are way down, which would be expected in the first full week of the month. Last week was the residual of October and the first few days of the month, which there would be a little spillover from the end of october sales, so it is a heavier number of closings. This is running about par for the for the last few months for a weekly sales number for a middle of the month week.
Second, the active listings did not climb a lot for the beginning of the month. I am hoping to see a wholesale slide, but it may not happen in November. The number is meandering, but it is statistically equivalent to last week, about half a percent higher. It is not good news, but not bad news either. It does appear to be off its highs, however.
Third, I am taking some heart in that pending sales and active w/ contingency numbers are pretty strong for this early in the month. That is a very good number, as this shows the new contracts trendline is strong compared to the current trend, and especially so given that sales in the last few months of the calendar should be expected to be very weak, even weaker than September and October. These numbers normally would be expected to build during the month somewhat, and if they show up as sales at the end of the month and December, we could go into the new year with some new momentum. I would love to see that.
It would have been nice to see the actives decrease, but we can't have everything at once it seems. The numbers overall are not significantly better than October, but I had lower expectations, and again, I would be fairly happy with matching October Sales in November, given historical data.
Pending Sales: 4199 (+243 From Last Week)
Pending + Active W/Contingency: 4688 (+282 from Last Week)
Closed Sales: 507 ( -523 from Last Week)
Active Listings: 57575 (+335 from Last Week)
The data for the week shows a couple of things. The sales numbers are way down, which would be expected in the first full week of the month. Last week was the residual of October and the first few days of the month, which there would be a little spillover from the end of october sales, so it is a heavier number of closings. This is running about par for the for the last few months for a weekly sales number for a middle of the month week.
Second, the active listings did not climb a lot for the beginning of the month. I am hoping to see a wholesale slide, but it may not happen in November. The number is meandering, but it is statistically equivalent to last week, about half a percent higher. It is not good news, but not bad news either. It does appear to be off its highs, however.
Third, I am taking some heart in that pending sales and active w/ contingency numbers are pretty strong for this early in the month. That is a very good number, as this shows the new contracts trendline is strong compared to the current trend, and especially so given that sales in the last few months of the calendar should be expected to be very weak, even weaker than September and October. These numbers normally would be expected to build during the month somewhat, and if they show up as sales at the end of the month and December, we could go into the new year with some new momentum. I would love to see that.
It would have been nice to see the actives decrease, but we can't have everything at once it seems. The numbers overall are not significantly better than October, but I had lower expectations, and again, I would be fairly happy with matching October Sales in November, given historical data.
Monday, November 5, 2007
MLS figures for October 29th-November 4th
MLS Statistics Week of 10/29/07
Pending MLS Sales 10/29/07-11/04/07: 3956 ( -226 from Last Week)
Pending + Active W/Contingency: 4406 ( -240 from Last Week)
Active Listings: 57240 ( -520 from Last Week)
Closed Sales: 1030 (+ 255 from Last Week)
Typical beginning of the month numbers; it seems that the first week of the month is always the weakest for new contracts. It is likely that the numbers won't get a lot better for this month, as November and December are poorish months for sales. If November sales hold onto the sales of October, I think most people would consider that a positive.
Speaking of positive, the number of Active Listings shrank a significant number for the first time in a while. Don't read too much into the Sales increase, it was the last week of the month, and sales are supposed to be higher. It would be great to see actives shrink another 1000 by the end of November. That would be an unqualified success at this point. If we can shave this number under 55000 by the end of the year, I would be impressed. We will hope that excess inventory will start really shrinking significantly in First Quarter. So much of the market is psychology, and right now, this large amount of listings is what is causing so much concern in the market. We should really be doubling the sales figures we are currently registering, glut of homes or not, but people are deeply disturbed by the prospect of the market continuing to fall.
For example 6000 sales in January would probably cut 3000-3500 homes off the market inventory. A similar or increasing number in subsequent months could knock 15% of the inventory off the market by the end of 1st quarter. That would be significant, and do a lot to straighten out the market. The biggest challenge to this scenario is how many foreclosures come back on the market. That is an unknown number, and I hope that their impact will be stretched out and marginalized. Something that may also impact resales is the amount of new home sales. I have a feeling, that I have mentioned before, that new homes will be a better value for buyers in the short term, especially in the outlying areas.
Pending MLS Sales 10/29/07-11/04/07: 3956 ( -226 from Last Week)
Pending + Active W/Contingency: 4406 ( -240 from Last Week)
Active Listings: 57240 ( -520 from Last Week)
Closed Sales: 1030 (+ 255 from Last Week)
Typical beginning of the month numbers; it seems that the first week of the month is always the weakest for new contracts. It is likely that the numbers won't get a lot better for this month, as November and December are poorish months for sales. If November sales hold onto the sales of October, I think most people would consider that a positive.
Speaking of positive, the number of Active Listings shrank a significant number for the first time in a while. Don't read too much into the Sales increase, it was the last week of the month, and sales are supposed to be higher. It would be great to see actives shrink another 1000 by the end of November. That would be an unqualified success at this point. If we can shave this number under 55000 by the end of the year, I would be impressed. We will hope that excess inventory will start really shrinking significantly in First Quarter. So much of the market is psychology, and right now, this large amount of listings is what is causing so much concern in the market. We should really be doubling the sales figures we are currently registering, glut of homes or not, but people are deeply disturbed by the prospect of the market continuing to fall.
For example 6000 sales in January would probably cut 3000-3500 homes off the market inventory. A similar or increasing number in subsequent months could knock 15% of the inventory off the market by the end of 1st quarter. That would be significant, and do a lot to straighten out the market. The biggest challenge to this scenario is how many foreclosures come back on the market. That is an unknown number, and I hope that their impact will be stretched out and marginalized. Something that may also impact resales is the amount of new home sales. I have a feeling, that I have mentioned before, that new homes will be a better value for buyers in the short term, especially in the outlying areas.
October MLS Sales-3474 Residential Closings- Up from September!
I meant to post this last Friday, but apparently it didn't save. The final sales figures from October are in, and it looks like we did better than September, albeit not by a lot, depending on whose statistics you use. According to ARMLS, there were 3474 MLS residential listings sold in October, which, using the same methodology, was significantly better than the 3090 or so that sold in September. I have seen higher numbers reported for September, something like 3400 also, but the methodology was different, and I would expect that reported number using the same methodology should be higher for October as well. The 3474 number is what I am reporting, so the sales figures have gone up a bit. I don't expect November and December to be strong months at all, and I will report pending sales tomorrow. They are both typically poor months due to the holidays, and this year is not likely to be much different. There appears at this point to be a slowdown in the pending sales for the pasts week, but at the time of this posting, many slaes that occur over the weekend have not been entered yet. I will take the measurement as of 9 pm on Monday night as I usually do.
Monday, October 29, 2007
MLS Weekly Sales Data 10/22/07-10/28/07
I don't want to get too excited about this, but....MLS numbers are out, and sales trends over the last month are still holding up fairly well. This is typically a very weak time of the year, and while we are not going to blow away September sales, I am happy to report that sales are not falling off, and quite possibly, we will beat September's sales figures. They will be close; it all depends on how many last day of the month closings we see. I will update this on Friday, as we can see how total October sales figures play out.
October 22-28, 2007
Pending Sales: 4182 ( -27 from last week)
Pending + Active W/Contingency: 4646 ( -23 from last week)
Sold 10/22-10/28: 775 (+20 from last week)
Active: 57940 (+171 from last week)
What we see from this picture is that sales are stable, but are in no way spectacular. This week might have turned up a little low in numbers as well because contracts are often written for the last day of the month, so we might see a little surge by Wednesday that will put us over September's numbers. We are a little short of that. There was a large spike in the last week of september, reaching 1200 closings, so we will see if that happens in October. The new contracts seem to be replacing the closings, so that is a good sign. The sales at the beginning of october seem to be a little slow, with a couple of weeks of tepid sales, but the last few weeks have rebounded nicely. There are still a few more homes going on the market than there should be every month, so the supply of actives are not yet declining, but the increase is pretty small. There was an article in the republic about the decrease in new permits to the point of less than half of the number of new homes sold, so the supply of new spec homes is also being reduced by over 1500 a month, although, it is killing the land business as builders hunker down to sell homes on the dirt they have. This has started to take on the look of things working themselves back to normal, and if we see further rate cuts, we might actually find ourselves in recovery. If we can get close to 5 thousand a month of resales starting by January, with some additional strength in the traditionally strong second quarter, (a not overly aggressive target given our past performance), it will cut 10% of the inventory of resales every couple of months, and I am ballparking here, but I think 30-40 thousand active homes is probably a fairly healthy number for a metro area of this size and how often people move. If we are selling 6000 homes a month, which is probably a healthy target for 2008, thirty thousand homes would be a five to six month supply, which is normal for many markets, although a little long for Phoenix standards. In 2003, we had 80000 mls sales. Right now, we are on a pace for 60,000, or less if the fourth quarter trend continues. That is a number less than 2001, when we were a much smaller metro area. It is hard to believe that this trend can continue. We might not see an immediate increase in resales in January, but I think we are going to see a strengthening trend of new home sales, as the prices have become very manageable. I am curious what the new home sales figures show for October.
October 22-28, 2007
Pending Sales: 4182 ( -27 from last week)
Pending + Active W/Contingency: 4646 ( -23 from last week)
Sold 10/22-10/28: 775 (+20 from last week)
Active: 57940 (+171 from last week)
What we see from this picture is that sales are stable, but are in no way spectacular. This week might have turned up a little low in numbers as well because contracts are often written for the last day of the month, so we might see a little surge by Wednesday that will put us over September's numbers. We are a little short of that. There was a large spike in the last week of september, reaching 1200 closings, so we will see if that happens in October. The new contracts seem to be replacing the closings, so that is a good sign. The sales at the beginning of october seem to be a little slow, with a couple of weeks of tepid sales, but the last few weeks have rebounded nicely. There are still a few more homes going on the market than there should be every month, so the supply of actives are not yet declining, but the increase is pretty small. There was an article in the republic about the decrease in new permits to the point of less than half of the number of new homes sold, so the supply of new spec homes is also being reduced by over 1500 a month, although, it is killing the land business as builders hunker down to sell homes on the dirt they have. This has started to take on the look of things working themselves back to normal, and if we see further rate cuts, we might actually find ourselves in recovery. If we can get close to 5 thousand a month of resales starting by January, with some additional strength in the traditionally strong second quarter, (a not overly aggressive target given our past performance), it will cut 10% of the inventory of resales every couple of months, and I am ballparking here, but I think 30-40 thousand active homes is probably a fairly healthy number for a metro area of this size and how often people move. If we are selling 6000 homes a month, which is probably a healthy target for 2008, thirty thousand homes would be a five to six month supply, which is normal for many markets, although a little long for Phoenix standards. In 2003, we had 80000 mls sales. Right now, we are on a pace for 60,000, or less if the fourth quarter trend continues. That is a number less than 2001, when we were a much smaller metro area. It is hard to believe that this trend can continue. We might not see an immediate increase in resales in January, but I think we are going to see a strengthening trend of new home sales, as the prices have become very manageable. I am curious what the new home sales figures show for October.
Tuesday, October 23, 2007
Pheasant hunting on the Great Plains
Wow,
When I read articles like this, I realize this is what I miss about living in South Dakota. This was always my favorite time of year: football, waterfowl hunting and pheasant hunting following Viking games on Sunday. Groton is a small town about an hour away from where I grew up and I lived in Aberdeen for three years before moving to Arizona. It is a pheasant mecca, and from what I understand, this is a better year than most. There is very little as exciting as having a couple of roosters explode out of the grass in front of you. The noise can be just shocking if you aren't expecting it, which you never are. It is an incredible adrenaline rush, and just about as fun as actually hitting something. Anyway, I had to link this article, because I do miss hunting there.
When I read articles like this, I realize this is what I miss about living in South Dakota. This was always my favorite time of year: football, waterfowl hunting and pheasant hunting following Viking games on Sunday. Groton is a small town about an hour away from where I grew up and I lived in Aberdeen for three years before moving to Arizona. It is a pheasant mecca, and from what I understand, this is a better year than most. There is very little as exciting as having a couple of roosters explode out of the grass in front of you. The noise can be just shocking if you aren't expecting it, which you never are. It is an incredible adrenaline rush, and just about as fun as actually hitting something. Anyway, I had to link this article, because I do miss hunting there.
Monday, October 22, 2007
MLS Weekly Sales Data 10/15/07 to 10/21/07
The weekly MLS numbers are mostly encouraging. They are not overwhelming, but they are showing some residual strength in that the good numbers seem to be trending upward, even though we are in a traditionally week time of the year. The fact that these sales figures are holding steady and even growing modestly gives me a little hope that we might see a bit of real strength by January.
Pending Sales: 4209 (+35 from last week)
Pending Sales + Active with Contingency : 4669 (+27 from last week)
Homes Sold: 755 (+227 from last week)
Active Listings: 57769 (+227 from last week)
I would still like to see the number of actives start shrinking; homes are going on the market faster than they are selling. The encouraging number that caught my attention is that even though there was a nice increase in number of sales this week, the number of pendings and actives kept pace. This hadn't occurred in previous weeks when there was a good sale number; when homes were closing, the pendings were not being replaced. This is a good week, then. Hopefully, the end of month sales will finish strong.
Pending Sales: 4209 (+35 from last week)
Pending Sales + Active with Contingency : 4669 (+27 from last week)
Homes Sold: 755 (+227 from last week)
Active Listings: 57769 (+227 from last week)
I would still like to see the number of actives start shrinking; homes are going on the market faster than they are selling. The encouraging number that caught my attention is that even though there was a nice increase in number of sales this week, the number of pendings and actives kept pace. This hadn't occurred in previous weeks when there was a good sale number; when homes were closing, the pendings were not being replaced. This is a good week, then. Hopefully, the end of month sales will finish strong.
Monday, October 15, 2007
Weekly MLS Data 10/14/07
10/08/07 to 10/14/07 MLS DATA
Pending Sales: 4174 (+234 from last week)
Pending Sales + Active With Contingency 4642 (+252 from last Week)
Sold 10/08/07 through 10/14/07 528 (-17 from last week)
Active Listings: 57542 (+330 from last week)
Okay, a quick take on the numbers. It is encouraging that after pending sales flagged last month, that we are seeing a few weeks of steady increase. It certainly could be a false start, but we will have to see. That is a fairly strong number, given the time of year and the trend through the summer. The amount of sales is low, but middle months are typically lower. There are once again too many listings going on the market, as they climbed by several hundred. That is as big a problem as any. Still, more pending sales means more sales in the short term, and if we can get that number to continue to grow for the next month, we might start talking about this as a return to a stabilized if still over-supplied housing market.
Pending Sales: 4174 (+234 from last week)
Pending Sales + Active With Contingency 4642 (+252 from last Week)
Sold 10/08/07 through 10/14/07 528 (-17 from last week)
Active Listings: 57542 (+330 from last week)
Okay, a quick take on the numbers. It is encouraging that after pending sales flagged last month, that we are seeing a few weeks of steady increase. It certainly could be a false start, but we will have to see. That is a fairly strong number, given the time of year and the trend through the summer. The amount of sales is low, but middle months are typically lower. There are once again too many listings going on the market, as they climbed by several hundred. That is as big a problem as any. Still, more pending sales means more sales in the short term, and if we can get that number to continue to grow for the next month, we might start talking about this as a return to a stabilized if still over-supplied housing market.
Monday, October 8, 2007
Weekly MLS Data
The weekly MLS data is out, and frankly, it could be a lot worse. I thought it would be a lot worse after reviewing pending numbers last week. It didn't appear that new contracts were replacing the pending and contingency contracts after the end of month sales bloom that always happens, but they have caught up somewhat, and while it is not any kind of boom, the numbers are respectable. Here they are.
10/01/07-10/07/07
Pending Sales: 3940 (+283 from last week)
Pending Sales + Active W/Contingency 4390 (+282 from last week)
Sales Closed 552 (-743 from last week)
Active Listings 57212 (+669 from last week)
Sales were down from the previous week, as normal the first week of the month. The homes under contract is building a little, but I still think we are going to see some weakness as a result of the mortgage crisis that hit its apex in August and September. There were also over 3100 new homes sold in August, as builders continue to make buying a new home very competitive. This is the 5th straight month that new homes sales in the valley have remained steady or positive. (See previous post for details.)
10/01/07-10/07/07
Pending Sales: 3940 (+283 from last week)
Pending Sales + Active W/Contingency 4390 (+282 from last week)
Sales Closed 552 (-743 from last week)
Active Listings 57212 (+669 from last week)
Sales were down from the previous week, as normal the first week of the month. The homes under contract is building a little, but I still think we are going to see some weakness as a result of the mortgage crisis that hit its apex in August and September. There were also over 3100 new homes sold in August, as builders continue to make buying a new home very competitive. This is the 5th straight month that new homes sales in the valley have remained steady or positive. (See previous post for details.)
New Home Sales Stabilizing?
A small breath of fresh air for many of you affected by the real estate market in Arizona. New home sales figures in the metro area have remained steady, and at a slightly better price than some respected analysts would have thought. In an article in the Arizona Republic, RL Brown analyzes the latest data. It appears there are just about as many new homes selling as resales-or at least a lot a closer comparison than would be normal. There are definitely some bargains out there in the new home market, and I have no doubt that is why so many homeowners are feeling the pinch of slow resales. Builders have always had better pricing power than consumer resellers, and certainly more so than usual given the low equity loans many people used to get into a home. This is at least a positive trend, and I am optimistic even more given the pricing levels mentioned in the article.
Remember, on Tuesdays I will post the weekly MLS data. There were some interesting numbers worth parsing this past week as well.
chris
Remember, on Tuesdays I will post the weekly MLS data. There were some interesting numbers worth parsing this past week as well.
chris
Friday, October 5, 2007
Phoenix Housing in the News, other tidbits
There was a recent article posted in New York Resident magazine that lists Phoenix as a top 10 place to own a second home. It gives a few highlights about desert life, and pretty accurately reflects the current situation with the housing market. Here is the link to that article...
Also, on the techinical side of things, there is a question that many people in the real estate industry have been wondering about for the last several months. I don't have the answer yet, but here is the question and some more evidence that the premise of the question is valid:
If we have so much growth of population in the Valley, why is our housing market still stumbling along?
Perfectly valid question, because I wonder about it myself. Where are these people living if they aren't buying houses, and to hear it from the apartment industry, that market is cooling as well. Well, a little birdy at the DMV says that 300,000 thousand licenses were turned in for new Arizona Driver's Licenses this year through August. There were over 10,000 Californians claim AZ status alone just in August. That is not an insignificant stat, and people have to live somewhere. If we do have strong growth of population, and evidence points to the idea that we do, then where are they going? These people are not going to be staying on friends' couches forever. I am optimistic that there is a growing amount of people that are going to be in need of housing in the very near future here. It seems almost inevitable, although this idea could be offset by the following piece of analysis.
On a related note about future demand trends, and this may set off some strong feelings with some of you; this is not a political blog, so please refrain from judgement as I am only analyzing this from a real estate professional's point of view, not a sociologist. There is a lot of talk about many immigrants leaving Arizona in preparation for a new employment law coming into effect in January. I forget the nature of the law, but it boils down to it will be hard to get work if you can't prove you are legal. At least in theory. This could have the effect of lowering the population in the valley, further exacerbating the housing vacancy issue. I will make no judgements here, but it is a side effect of a tougher immigration policy, and although I don't know how much effect it will have, it could be substantial, and whether you are in favor of strict immigration control or not, this couldn't come at a worse time for the housing industry and it will cause some pain. It is a brilliant example of why you address problems like these sooner than later. We have all gotten use to higher home values and lower home maintenance costs and job growth in part because of immigration, and now we have to fix it. We have become use to the things that come with it that do benefit us, whether right or wrong, and we will be paying in various ways, including flat property values as we thin the population. I hope the expected influx of baby boomers does offset this in the coming years, as i think a vibrant real estate market is crucial to Arizona's continued success.
One last item related to new home sales. A local tracking report that I read detailed a horriffic week in new home sales. There were actually a lot of new sales for the week-maybe not a lot, but a very respectable showing, let's say. The buzzkill was the number of cancellations that came too uncomfortably close to zeroing out the sales. It was really ridiculous. There are going to be weeks like that, I suppose, and I know of at least one builder administratively through a significant number sales into cancellations probably based on the public report not being up to snuff or something like that, but still a cancellation is a cancellation, and nobody likes to see those. There is definitely some hangover regarding loans, although I have heard that is easing significantly-or maybe it was just never as bad as the media pointed out. We are going to have to watch new home sales figures very closely; as I have said, I think there is a good chance that new home sales will recover before resales, as builders have pricing power that most owners do not, and it is no competition. We are seeing subdivisions come on line starting in the $99K's as I noted in an earlier post, and that is crazy reasonable. Eventually this will drive some sales. The buyers in this category, first time homebuyers, to a large degree, were the first traumatized by the price increases of 2005, and once they realize they can afford homes again, they will lead the market back to recovery, if there is to be one.
Also, on the techinical side of things, there is a question that many people in the real estate industry have been wondering about for the last several months. I don't have the answer yet, but here is the question and some more evidence that the premise of the question is valid:
If we have so much growth of population in the Valley, why is our housing market still stumbling along?
Perfectly valid question, because I wonder about it myself. Where are these people living if they aren't buying houses, and to hear it from the apartment industry, that market is cooling as well. Well, a little birdy at the DMV says that 300,000 thousand licenses were turned in for new Arizona Driver's Licenses this year through August. There were over 10,000 Californians claim AZ status alone just in August. That is not an insignificant stat, and people have to live somewhere. If we do have strong growth of population, and evidence points to the idea that we do, then where are they going? These people are not going to be staying on friends' couches forever. I am optimistic that there is a growing amount of people that are going to be in need of housing in the very near future here. It seems almost inevitable, although this idea could be offset by the following piece of analysis.
On a related note about future demand trends, and this may set off some strong feelings with some of you; this is not a political blog, so please refrain from judgement as I am only analyzing this from a real estate professional's point of view, not a sociologist. There is a lot of talk about many immigrants leaving Arizona in preparation for a new employment law coming into effect in January. I forget the nature of the law, but it boils down to it will be hard to get work if you can't prove you are legal. At least in theory. This could have the effect of lowering the population in the valley, further exacerbating the housing vacancy issue. I will make no judgements here, but it is a side effect of a tougher immigration policy, and although I don't know how much effect it will have, it could be substantial, and whether you are in favor of strict immigration control or not, this couldn't come at a worse time for the housing industry and it will cause some pain. It is a brilliant example of why you address problems like these sooner than later. We have all gotten use to higher home values and lower home maintenance costs and job growth in part because of immigration, and now we have to fix it. We have become use to the things that come with it that do benefit us, whether right or wrong, and we will be paying in various ways, including flat property values as we thin the population. I hope the expected influx of baby boomers does offset this in the coming years, as i think a vibrant real estate market is crucial to Arizona's continued success.
One last item related to new home sales. A local tracking report that I read detailed a horriffic week in new home sales. There were actually a lot of new sales for the week-maybe not a lot, but a very respectable showing, let's say. The buzzkill was the number of cancellations that came too uncomfortably close to zeroing out the sales. It was really ridiculous. There are going to be weeks like that, I suppose, and I know of at least one builder administratively through a significant number sales into cancellations probably based on the public report not being up to snuff or something like that, but still a cancellation is a cancellation, and nobody likes to see those. There is definitely some hangover regarding loans, although I have heard that is easing significantly-or maybe it was just never as bad as the media pointed out. We are going to have to watch new home sales figures very closely; as I have said, I think there is a good chance that new home sales will recover before resales, as builders have pricing power that most owners do not, and it is no competition. We are seeing subdivisions come on line starting in the $99K's as I noted in an earlier post, and that is crazy reasonable. Eventually this will drive some sales. The buyers in this category, first time homebuyers, to a large degree, were the first traumatized by the price increases of 2005, and once they realize they can afford homes again, they will lead the market back to recovery, if there is to be one.
Thursday, October 4, 2007
New Home Prices in Metro Phoenix too High? Think again...
Something came to light today that illustrates my contention about the current housing slump. I haven't expressed it outright here previously, but my belief about the slowdown in home purchases has very little to do about price, and much to do about psychology. I don't know how much you study the news trends, but I do a lot, having previously worked in the media. This is what I know. Newspapers will hew to the line of whichever way the wind is blowing, and if it blowing south, well, expect your news to be slanted that way. We are no doubt in a trough, and it came about for a lot of good reasons, not least of which is a run up in prices. True enough. You could barely buy a home in the $200K's in Pinal County by the end of 2005. That number goes against pretty much every reason someone from metro phoenix would buy there: affordability you cuold qualify for as first time homebuyer. That all changed when prices started touching $300K for a home that sold for $109K in 2003. I digress from the point of this post, and that is that prices are not the main reason people aren't buying houses right now. We have created a monster of psychological block: that it is a bad thing to buy a home because its value may fall, and we can't get mortgages, and we won't be able to sell it anytime soon. Those are media driven issues, much like the way media drove the "housing hot spot" message in 2004-2005. People can make the argument all day that prices are too high, but here is why I disagree. Elite Communities is offering new homes in Pinal County south of Chandler starting from $99,900. When you can buy a new home in very nice master plan starting from $99,000, do not come and tell me that people can't afford to buy. This is a pre-2003 price, and while it may not be the house of many people's dreams, if you are living with a family in an apartment in Chandler or Gilbert or Mesa, it might be your dream right now. Ifyou can buy a home whose mortgage is going to be well under a $1,000 a month, simple math says it is likely going to be less than an apartment that you can rent in any crime-free area of those communities. Most people who don't follow this information might not realize this, but most "A" grade apartments sell for well in excess of $100k per door! I can give you a long list of those. What do you think that means for the owner of those units? They have to rent at a price that gives them a return, so you can start to see the math, and the math is that you can buy a new home for less than what it would cost you to rent an apartment. We don't even have to get into the deductions, etc, to understand what a good deal that is. It makes me nuts that I bought a home in central phoenix that is noticably more money for a home that needed major updating, when I should have waited a bit and and bought a home down there. Especially since I spend half my time in Pinal anyway. Off the point, but the point should be that the price of these homes should cause a boomlet of sales, but I am guessing it won't and it cannot be about price.
We have a psychological issue with the market right now-all of us, and it about a lot more than price. I read a report in the Minneapolis Star Tribune last night that 65% of Minnsesotans have a dim view of the direction of our nation. We have a national malaise, created by the war, the housing bubble deflation, the acrimony between the political parties-whatever it is, it goes beyond simply that housing is unaffordable. I agree the resale market is going to be tough for a while, because prices moved up so quickly. But what we have now is a disparity between new home and resale pricing, in favor of new, and people are still not flocking to buy. I have every intention of buying a home in Pinal County myself, and soon I hope. At that price, I can afford to have a little crash pad condo in central phoenix for the weekend social life, buy a new a home in Maricopa so I don't have to travel back and forth as much, and still be in both for half of what a phoenix home would cost. There are opportunities in the market for potential home buyers now, and I don't think you are going to see these prices last for long, and certainly it would be hard to see that they would have any chance of going lower. It is ironic that the media rarely covers the story that Pinal County homes are so affordable again. I imagine it just doesn't fit in with the current bad news trendline. A little less doom and gloom and a little more looking for a silver lining would be welcome from the news organizations.
We have a psychological issue with the market right now-all of us, and it about a lot more than price. I read a report in the Minneapolis Star Tribune last night that 65% of Minnsesotans have a dim view of the direction of our nation. We have a national malaise, created by the war, the housing bubble deflation, the acrimony between the political parties-whatever it is, it goes beyond simply that housing is unaffordable. I agree the resale market is going to be tough for a while, because prices moved up so quickly. But what we have now is a disparity between new home and resale pricing, in favor of new, and people are still not flocking to buy. I have every intention of buying a home in Pinal County myself, and soon I hope. At that price, I can afford to have a little crash pad condo in central phoenix for the weekend social life, buy a new a home in Maricopa so I don't have to travel back and forth as much, and still be in both for half of what a phoenix home would cost. There are opportunities in the market for potential home buyers now, and I don't think you are going to see these prices last for long, and certainly it would be hard to see that they would have any chance of going lower. It is ironic that the media rarely covers the story that Pinal County homes are so affordable again. I imagine it just doesn't fit in with the current bad news trendline. A little less doom and gloom and a little more looking for a silver lining would be welcome from the news organizations.
Monday, October 1, 2007
Resale Home Estimates 9-24-07 to 9-30-07
Home sales statistics for the week of 9-24-07:
Universal Pending Sales: 3656 (-599 from last week)
Pending Sales + Active W/Contingencies: 4108 (-643 from last week)
Sales Closed 9-24-07 to 9-30-07 1295 (+558 from last week)
Active Listings as of 10/01/07 56543 ( -685 from last week)
Obviously, this week benefitted from the end of month closings. More troubling is that the pending sales have fallen steeply, and active w/contingency contracts have not been replaced by an equal or greater amount of new sales. Still, the methodology I am using is less than a month old, so it is difficult to say definitively that sales are falling off for this week. It is nice to see total listings going down at least a little. Hopefully, this reduction in actives becomes a trend. New sales figures should be available on Thursday.
Universal Pending Sales: 3656 (-599 from last week)
Pending Sales + Active W/Contingencies: 4108 (-643 from last week)
Sales Closed 9-24-07 to 9-30-07 1295 (+558 from last week)
Active Listings as of 10/01/07 56543 ( -685 from last week)
Obviously, this week benefitted from the end of month closings. More troubling is that the pending sales have fallen steeply, and active w/contingency contracts have not been replaced by an equal or greater amount of new sales. Still, the methodology I am using is less than a month old, so it is difficult to say definitively that sales are falling off for this week. It is nice to see total listings going down at least a little. Hopefully, this reduction in actives becomes a trend. New sales figures should be available on Thursday.
Wednesday, September 26, 2007
New Home Sales Index 9-26-07
A weekly new home sales index often used by people in the business reported today that home sales continue to be flat. I was surprised to learn that the index from the exact same period las year showed only slightly better numbers, however, so it that time of the year for slower sales. It is not an encouraging looking graph with the number of home sales sliding down from the early part of the year to near its lowest point (the low point may have been last week.) Still, it was barely better than last week's figures.
This doesn't tell us a whole lot other than the market is still in a state of flux from the subprime lending fiasco, and the psychological impact of the bubble deflating. Many people fear they can't obtain a mortgage, so they don't even try. I have friends who are capable of getting financing, but have it already it their minds that now is not a good time to try because they will get turned down. This is a very unfortunate by-product of the subprime mess. It is the continuing cause of this malaise in the market. If affordability remains an issue, I think we may see more people heading to the 40 and 50 year mortgages. I think the time is coming when those are more the standard than our current system. We'll see what happens, but I think it is likely.
chris
This doesn't tell us a whole lot other than the market is still in a state of flux from the subprime lending fiasco, and the psychological impact of the bubble deflating. Many people fear they can't obtain a mortgage, so they don't even try. I have friends who are capable of getting financing, but have it already it their minds that now is not a good time to try because they will get turned down. This is a very unfortunate by-product of the subprime mess. It is the continuing cause of this malaise in the market. If affordability remains an issue, I think we may see more people heading to the 40 and 50 year mortgages. I think the time is coming when those are more the standard than our current system. We'll see what happens, but I think it is likely.
chris
Tuesday, September 25, 2007
Home Sales Estimates Phoenix Metro 9-17-07 to 9-23-07
This is the third week of the Home Sales Estimates for Metro Phoenix, courtesy of ARMLS. These are the unfiltered numbers, and contain oddballs like timeshares and mobile homes. There are not a lot of them, but they do account for several thousand listings.
By the way, I am going to start releasing this on Tuesday, as there are always some agents who have not inputted their weekend sales by Monday, or Friday recordings, for that matter, so we will try using Tuesday. The weekly report is what you would expect to see: fairly flat. Sales in the middle months are typically lighter, as people generally coincide closings with the opportunity to move from their present location at the end of months. Obviously, it is financially efficient to not pay another month's rent if you can move into your newe home at the same time. Here are the weekly numbers from ARMLS:
Universal Pending Sales 9/23/07: 4255 ( +9 from Last Week)
Pending Sales + Active W/Contingency: 4751 (-3 from Last Week)
Sales Closed 9/17/07-9/23/07: 737
Active Homes: end of 9/23/07 57,228 (+472 From Last Week)
The numbers basically paint the same story we already know: resale home figures are fairly flat. There are still more homes coming onto the market however, which we don't need. There is some talk that some of these are now being turned into rentals, as owners resign themselves to the idea that they can't sell for enough, and are going to have to eat some of the mortgage for a while as the market shakes out. It is being built somewhat by the apartment community, as renting a home has become competive with apartment rentals, as desperate owners who wish to get something out of their empty house are cutting nice lease deals. It is circular effect, as these people who can rent cheap (for now) and require a house instead of an apartment, are placated and don't feel they have to buy a home at present. Vicious cycle, isn't it?
By the way, I am going to start releasing this on Tuesday, as there are always some agents who have not inputted their weekend sales by Monday, or Friday recordings, for that matter, so we will try using Tuesday. The weekly report is what you would expect to see: fairly flat. Sales in the middle months are typically lighter, as people generally coincide closings with the opportunity to move from their present location at the end of months. Obviously, it is financially efficient to not pay another month's rent if you can move into your newe home at the same time. Here are the weekly numbers from ARMLS:
Universal Pending Sales 9/23/07: 4255 ( +9 from Last Week)
Pending Sales + Active W/Contingency: 4751 (-3 from Last Week)
Sales Closed 9/17/07-9/23/07: 737
Active Homes: end of 9/23/07 57,228 (+472 From Last Week)
The numbers basically paint the same story we already know: resale home figures are fairly flat. There are still more homes coming onto the market however, which we don't need. There is some talk that some of these are now being turned into rentals, as owners resign themselves to the idea that they can't sell for enough, and are going to have to eat some of the mortgage for a while as the market shakes out. It is being built somewhat by the apartment community, as renting a home has become competive with apartment rentals, as desperate owners who wish to get something out of their empty house are cutting nice lease deals. It is circular effect, as these people who can rent cheap (for now) and require a house instead of an apartment, are placated and don't feel they have to buy a home at present. Vicious cycle, isn't it?
Monday, September 17, 2007
Home Sales Estimates Phoenix Metro 9/17/07
UPDATED
This is the second week of Housing Sales Estimates, using statistics from the ARMLS. There is no great change from last week, and we will need a much longer analysis period to determine where things are. It is clear though, that we are down almost a third in home sales since last year's figures for the same time period. Certainly, resales are suffering, but they are also the highest priced (relatively) housing product available now. New homes are relatively low-priced in many submarkets, compared to existing homes, and therefore resales could suffer.
Here is what I have found for the week of 9.10.2007-9.16.2007
Universal Pending Sales as of 9/17/07: 4246
Pending Sales + Active with Contingency: 4754
Sales Closed 9.10.07-9.16.07: 796***
Active Homes: 56,756**
*This only applies to reported sales as of 9/17/07 at noon, there will likely be more reported eventually.
**This number includes mobiles and likely timeshares, etc, so it must be taken with a grain of salt. It is simpler to include them and relate it to the total sales figures, then to sift through and pull sales that might be mobiles, etc. This is technically the most accurate statistic; it just includes listings and a few sales we are not really interested in.
***I had originally only searched for closings that happened during weekdays; apparently, many sales are reported by agents as closed on Saturday or Sunday as well, so there is a steep upward revision in the total closings for the week.
This is a mid-month week, and there are typically less closings during this mid-month week then at the end of the month.
http://www.justlandconsultants.com/
This is the second week of Housing Sales Estimates, using statistics from the ARMLS. There is no great change from last week, and we will need a much longer analysis period to determine where things are. It is clear though, that we are down almost a third in home sales since last year's figures for the same time period. Certainly, resales are suffering, but they are also the highest priced (relatively) housing product available now. New homes are relatively low-priced in many submarkets, compared to existing homes, and therefore resales could suffer.
Here is what I have found for the week of 9.10.2007-9.16.2007
Universal Pending Sales as of 9/17/07: 4246
Pending Sales + Active with Contingency: 4754
Sales Closed 9.10.07-9.16.07: 796***
Active Homes: 56,756**
*This only applies to reported sales as of 9/17/07 at noon, there will likely be more reported eventually.
**This number includes mobiles and likely timeshares, etc, so it must be taken with a grain of salt. It is simpler to include them and relate it to the total sales figures, then to sift through and pull sales that might be mobiles, etc. This is technically the most accurate statistic; it just includes listings and a few sales we are not really interested in.
***I had originally only searched for closings that happened during weekdays; apparently, many sales are reported by agents as closed on Saturday or Sunday as well, so there is a steep upward revision in the total closings for the week.
This is a mid-month week, and there are typically less closings during this mid-month week then at the end of the month.
http://www.justlandconsultants.com/
Friday, September 14, 2007
A housing news update...
There is a great article in the Arizona Republic about Southeast Valley Housing....good reading for anyone interested in the real estate market. It appears the sky may not be falling after all. We are still going through some rough times, but there appears to be some light at the end of the tunnel for Maricopa, and therefore Pinal County. It is encouraging to see home prices in Maricopa become affordable again.
Another article on MSN discusses the possibility of a rate cut at the meeting next week. Its going to be very interesting to see its effect on the real estate market. I don't know that it will turn a lot of renters into buyers or not, but I think its greatest effect will be psychological.
Another article on MSN discusses the possibility of a rate cut at the meeting next week. Its going to be very interesting to see its effect on the real estate market. I don't know that it will turn a lot of renters into buyers or not, but I think its greatest effect will be psychological.
Wednesday, September 12, 2007
A sliver of Good News: Pinal County still Building at a pretty good clip.
An article in the East Valley Tribune notes that Pinal County is still building, especially Maricopa. It ranks as the #1 fastest growing county in the nation, with 16.6% growth rate.
Pinal County is going to continue to grow, as it will likely be the metro area's source for the most affordable housing prices. Many builders bought land at reasonable prices, and will continue to offer homes at prices that workers-even modestly compensated workers- will likely be able to afford.
Pinal County is going to continue to grow, as it will likely be the metro area's source for the most affordable housing prices. Many builders bought land at reasonable prices, and will continue to offer homes at prices that workers-even modestly compensated workers- will likely be able to afford.
Tuesday, September 11, 2007
Rising Rental Rates finally slowing...
Rental Rates in the Valley have crested apparently. An article in the East Valley Tribune talks about the rapid rise of apartment rents from 2005-2007, accelerating over 10% in that time period. Vacancy rates are now higher in the apartment project segment, as many investors have homes they are resigned to renting out, and quite a few condos as well. Rents are expected to rise 2.5%-3%.
Vacancy rates are higher than healthy now for apartments, but I think people are definitely exercising their choices, and many are beneifitting from renting a Single Family Residence at a very reasonable cost. Its part of the cycle. The hidden factor of this is that it may draw and keep some homes off the market that would have otherwise been clogging the MLS as well. I have a home I am considering just renting out a home I have as well, as it is in central phoenix, and would probably still command a good rental rate. Central Phoenix has so far been fairly insulated from any real nasty valuation slides.
Chris
Vacancy rates are higher than healthy now for apartments, but I think people are definitely exercising their choices, and many are beneifitting from renting a Single Family Residence at a very reasonable cost. Its part of the cycle. The hidden factor of this is that it may draw and keep some homes off the market that would have otherwise been clogging the MLS as well. I have a home I am considering just renting out a home I have as well, as it is in central phoenix, and would probably still command a good rental rate. Central Phoenix has so far been fairly insulated from any real nasty valuation slides.
Chris
Monday, September 10, 2007
Home Sales Estimates-pendings 9/10/07
I am going to try to post weekly pending sales figures. This number, when viewed over time, does give us an idea of relative strength and likely sales numbers in the the next month. The number doesn't track perfectly, as some pendings will take more than 30 days to close, but there is a close correlation between pendings and monthly sales. I will try to track the accuracy of this over time. If we add the active with contingency statistic, it goes up, as many of these will soon turn to pending, but some will likely be pushed beyond the current month, so the number will usually be higher than the actual monthly sales figure. So as of 9/10/07:
pending: 4299 total homes
pending + AW/C: 4823 Total Homes
These numbers do include all condos, townhomes, SF Residences.
Arizona's subprime delinquency rate has risen, although it is certainly not as bad as some other boom states. The Arizona Republic's real estate writer, Catherine Reagor, has reported.
We have so far seemed to weather the downturn pretty well, with fallout being somewhat limited so far. It is nothing but expected that a certain percentage of subprime loans will default, that is why they are call subprime! Any lender that hasn't already calculated some percentage of that into their business model is lying. They know there will be defaults. There is going to be some pain no doubt, but if we get an interest rate cut, it will likely do wonders for the psyches of many people. Right now, it seems like so many people are paralyzed in fear, as not only do they think prices are going to slide, but also that they cannot get financing. I get more emails from lenders soliciting real estate agents to bring their deals to them now then at any time I can remember. It is really difficult to understand where the truth lies, and that is holding many people from applying for a mortgage. I have been told by industry professionals that while you can't smile and sign like you did during the last few years, if you deserve to get a loan, you typically can, on conforming loans. I have received advertising for jumbo loan financing up to 95% LTV just today, which I had heard had disappeared. Anyone with any insight on the mortgage business, feel free to comment here on what you know. Thanks!
chris
pending: 4299 total homes
pending + AW/C: 4823 Total Homes
These numbers do include all condos, townhomes, SF Residences.
Arizona's subprime delinquency rate has risen, although it is certainly not as bad as some other boom states. The Arizona Republic's real estate writer, Catherine Reagor, has reported.
We have so far seemed to weather the downturn pretty well, with fallout being somewhat limited so far. It is nothing but expected that a certain percentage of subprime loans will default, that is why they are call subprime! Any lender that hasn't already calculated some percentage of that into their business model is lying. They know there will be defaults. There is going to be some pain no doubt, but if we get an interest rate cut, it will likely do wonders for the psyches of many people. Right now, it seems like so many people are paralyzed in fear, as not only do they think prices are going to slide, but also that they cannot get financing. I get more emails from lenders soliciting real estate agents to bring their deals to them now then at any time I can remember. It is really difficult to understand where the truth lies, and that is holding many people from applying for a mortgage. I have been told by industry professionals that while you can't smile and sign like you did during the last few years, if you deserve to get a loan, you typically can, on conforming loans. I have received advertising for jumbo loan financing up to 95% LTV just today, which I had heard had disappeared. Anyone with any insight on the mortgage business, feel free to comment here on what you know. Thanks!
chris
Thursday, September 6, 2007
Home Sales in August
ARMLS reported sales of 4360 resale homes closed during the month of August in metro phoenix. It is not great numbers by any means, but I had some concern that there would be a lot of deals cancelled because of Jumbo loan sources drying up. The numbers are mediocre, but it was still good to see them stay over 4000 sales. I did some statistical modeling for september, and it looks like we may see about the same number, but possibly a little more. The AW/C numbers are not tested enough to tell if they will contribute to the current month totals, but over time we can get a better idea. I am hoping for a little bump in September. The mortgage mess is just one more psychological hurdle for buyers.
The Ryness report showed a little more disturbing trend last week; metro new home sales in Maricopa county showed a high percentage of cancellation; it makes sense in that core city new homes are typically more expensive than outlying areas, and jumbo loan financing availability has been a casualty of the mortgage crisis. The positive news was that Pinal Sales were okay, with relatively few cancellations. When homes are $130K-$200K, they are on average going to be more conforming type loans so they might not have as much trouble as the $400K plus market you see in chandler, Phoenix, and scottsdale. I do think that Pinal county and West Valley new homes are going to make resale homesellers miserable for a while, as there seems to be quite a disparity in the pricing in favor of buying a new home. I am thinking about selling my central phoenix home, and buying one in maricopa myself. As much time as I spend down there, it seems like a relative bargain.
One of my favorite areas in the metro phoenix area still seems to be doing well, and that is the little area commonly thought of as Hidden Valley southwest of Maricopa. It seems there are still many new custom homes going up in the area. It is odd to see the disparity in the asking prices of individual lots, as you will see pricing anywhere from $35K per acre to $70K an acre, and some even higher. There has to be opportunity for investors in there somewhere. Century Road is going to be a beautiful rural drive, with lovely views of the mountains to the west and south, and many nice homes going up in that corridor. Another pretty area is south of Stanfield, called high chaparral ranch. There are not a lot of small parcels available in here yet, but the area has stunning views and great landscape, right at the edge of Table Top Mountain Preserve, and you can see Casa Grande quite clearly, as the land sits a little higher. It is going to be a custom home area eventually.
I would appreciate any comments.
Best Prices on the Web - JustBlinds.com
The Ryness report showed a little more disturbing trend last week; metro new home sales in Maricopa county showed a high percentage of cancellation; it makes sense in that core city new homes are typically more expensive than outlying areas, and jumbo loan financing availability has been a casualty of the mortgage crisis. The positive news was that Pinal Sales were okay, with relatively few cancellations. When homes are $130K-$200K, they are on average going to be more conforming type loans so they might not have as much trouble as the $400K plus market you see in chandler, Phoenix, and scottsdale. I do think that Pinal county and West Valley new homes are going to make resale homesellers miserable for a while, as there seems to be quite a disparity in the pricing in favor of buying a new home. I am thinking about selling my central phoenix home, and buying one in maricopa myself. As much time as I spend down there, it seems like a relative bargain.
One of my favorite areas in the metro phoenix area still seems to be doing well, and that is the little area commonly thought of as Hidden Valley southwest of Maricopa. It seems there are still many new custom homes going up in the area. It is odd to see the disparity in the asking prices of individual lots, as you will see pricing anywhere from $35K per acre to $70K an acre, and some even higher. There has to be opportunity for investors in there somewhere. Century Road is going to be a beautiful rural drive, with lovely views of the mountains to the west and south, and many nice homes going up in that corridor. Another pretty area is south of Stanfield, called high chaparral ranch. There are not a lot of small parcels available in here yet, but the area has stunning views and great landscape, right at the edge of Table Top Mountain Preserve, and you can see Casa Grande quite clearly, as the land sits a little higher. It is going to be a custom home area eventually.
I would appreciate any comments.
Best Prices on the Web - JustBlinds.com
Saturday, September 1, 2007
Welcome, its about time I did this.
I have wanted to do a blog for my real estate website for a long time. I think it is important that there is a forum for people to make anonymous contacts, as it gives more people an opportunity to ask questions of people in the business that they might not normally ask, and also find information in a less formal, neutral setting. If you feel like spilling the beans about real estate news, deals, or other juicy bits of information, I am all ears. The most interesting aspect of this business is finding out about deal you didn't know were in the works. Lots of people who are in the business are "land junkies", and we live for analyzing the deals. Those kinds of secrets are most welcome here. So come on in and spill it. I won't give away sources, but I will publish it. So if it can be traced back to you, and you don't want it to, don't tell me here. send it to my email at chris@justlandconsultants.com, and that will be between you and me.
As a start I have put up the two polls, as I am most interested in both of those questions. I look forward to some great exchange of information!
chris just
As a start I have put up the two polls, as I am most interested in both of those questions. I look forward to some great exchange of information!
chris just
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