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.
Thursday, November 29, 2007
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.
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