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.
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