Pending + AWC contracts blows past 7000!
We seem to be continuing a stronger trend in the resale market....here are the stats for the week ending 3/23/08...
Pending Sales: 6000 ( +263 from last week)
Active w/ Contingency 1108 ( +50 from last week)
Total Contracts: 7108 ( +313 from last week)
Closed Contracts through 3/23/08 815 ( -114 from last week)
Active listings: 56534 ( +233 from last week)
Closed Month to Date: 3/23/08 2532
The numbers are generally good. If we look into the trends, we are seeing a growing strength in buyer activity, probably in the lower price ranges, but nonetheless, the first time homebuyers are the foundation of our market. Its great to see us cresting over the 7000 contracts threshold, and we did with some room to spare even. The closings were down, but the middle of the month usually sees a little dip, as this week's numbers should be much higher. We have this full week and monday next, so we are on a very good pace for sales beating February.
The number that still worries me most is the number of active listings. This has stubbornly held on to this mid 50K's for while, and doesn't really show signs of coming down. This is going to contribute to lower home prices, as there is a lot to choose from out there, and even with increased activity, flexible sellers are the ones who will move there homes. There is simply too much resale inventory. On the other hand, the builders have done a nice job of decreasing their stockpile of homes, so they are not exacerbating the problem, quite so much. There has been good news on many fronts for the housing market in the last few weeks. February sales were up nationally, although the west was not part of that trend. We lag, it seems, so we will show up with some better numbers in the next few months. It was widely reported yesterday that February home sales were up 2.9% nationally, although prices dipped again. Our February numbers were up better than that locally. Our future numbers, pendings and AWC, continue to rebound, with significant increases on a weekly basis. It was less than a quarter ago that the high for AWC contracts was only about 450. A very significant development when you are thinking about buyer activity.
Tuesday, March 25, 2008
Thursday, March 20, 2008
Interesting Article in the Tribune...
Some more evidence that the market is starting to turn around.... There has been a lot better news lately. I am becoming more optismistic.
Tuesday, March 18, 2008
MLS STATS Through 3/16/08
Pending Sales: 5737 (+170 from last week)
Active with Contingency: 1058 (+57 from last week)
Total Contracts: 6795 (+227 from last week)
Closed 3.10-3.16 929 (+247 from last week)
Active listings: 56301 (+313 from last week)
Month to Date Closed 3.16.08 1672
The number of pending contracts continues to grow, although the rate may be falling a bit, as the elasticity law comes into play. Still, undoubtedly, homebuying activity is up substantially from the lows it experienced in the latter half of 2007. Actual closings are not up sharply, although some other measurements showed substantially better sales in February than my metric did. It shows up as about a 12% increase over January. This month is looking pretty good as well. End of the month sales are pretty strong and we have two full weeks left and a day in the following, and that should lead us substantially past February. Four thousand closings in march would not be out of the question, and that would be an improvement, but not good relating to previous Marches. We are in a new time though, and we can't judge it by previous Marches, because those kind of sales numbers are probably not possible again for a while.
There is plenty of reason for optimism, but there is still lingering reason for caution. The number of closings has not kept pace with the increase in pendings or AWC, which means more deals could be falling out due to financing or other issues, or just that deals are taking longer to close. Either way, that isn't a sign of a crisp process, and it means that we are still having troubles. More troubling is that there has been no significant decrease in the number of homes on the market, and if we aren't reducing now at a time of increasing new contracts, it is hard to seen when we will make it through the wave of inventory. It has not increased, but 55k-56K homes on the market is not a positive equilibrium for our market. Something in the 30k-40K would be far healthier. Even that is too many given our history, but it is likely we are going to be joining the rest of the world in having a six month supply of homes on the market long term.
Still, I am guardedly optimistic. Homes under contract are the harbinger of buyer sentiment, and if we are seeing rising activity as opposed to declining activity, buyers may be deciding it is ok to go out and buy and again, and that should be a sign of reaching the beginning of a turnaround.
New home sales have remained pretty flat at an unacceptable number. This is a market that should pick up, as we have a shrinking supply of specs, rates are acceaptably low, and prices have come down substantially as builders have reined in expectations, and the cost of construction materials has decreased substantially. Builders will have a better pricing situation and pricing will be attractive. A qualified new home buyer can call his own shots within reason now. There is an article on CNN that talks about this. So much of our industry is based on psychology, and the overwhelming degree of negative news has been a hindrance the last few years, but we are starting to see the pendulum swing back a bit. Hopefully, we can avert recession, and start back down the path to a healthy market in Arizona.
Active with Contingency: 1058 (+57 from last week)
Total Contracts: 6795 (+227 from last week)
Closed 3.10-3.16 929 (+247 from last week)
Active listings: 56301 (+313 from last week)
Month to Date Closed 3.16.08 1672
The number of pending contracts continues to grow, although the rate may be falling a bit, as the elasticity law comes into play. Still, undoubtedly, homebuying activity is up substantially from the lows it experienced in the latter half of 2007. Actual closings are not up sharply, although some other measurements showed substantially better sales in February than my metric did. It shows up as about a 12% increase over January. This month is looking pretty good as well. End of the month sales are pretty strong and we have two full weeks left and a day in the following, and that should lead us substantially past February. Four thousand closings in march would not be out of the question, and that would be an improvement, but not good relating to previous Marches. We are in a new time though, and we can't judge it by previous Marches, because those kind of sales numbers are probably not possible again for a while.
There is plenty of reason for optimism, but there is still lingering reason for caution. The number of closings has not kept pace with the increase in pendings or AWC, which means more deals could be falling out due to financing or other issues, or just that deals are taking longer to close. Either way, that isn't a sign of a crisp process, and it means that we are still having troubles. More troubling is that there has been no significant decrease in the number of homes on the market, and if we aren't reducing now at a time of increasing new contracts, it is hard to seen when we will make it through the wave of inventory. It has not increased, but 55k-56K homes on the market is not a positive equilibrium for our market. Something in the 30k-40K would be far healthier. Even that is too many given our history, but it is likely we are going to be joining the rest of the world in having a six month supply of homes on the market long term.
Still, I am guardedly optimistic. Homes under contract are the harbinger of buyer sentiment, and if we are seeing rising activity as opposed to declining activity, buyers may be deciding it is ok to go out and buy and again, and that should be a sign of reaching the beginning of a turnaround.
New home sales have remained pretty flat at an unacceptable number. This is a market that should pick up, as we have a shrinking supply of specs, rates are acceaptably low, and prices have come down substantially as builders have reined in expectations, and the cost of construction materials has decreased substantially. Builders will have a better pricing situation and pricing will be attractive. A qualified new home buyer can call his own shots within reason now. There is an article on CNN that talks about this. So much of our industry is based on psychology, and the overwhelming degree of negative news has been a hindrance the last few years, but we are starting to see the pendulum swing back a bit. Hopefully, we can avert recession, and start back down the path to a healthy market in Arizona.
Tuesday, March 11, 2008
MLS Stats 3/9/08
Active with Contingency Contracts Surpasses 1000!
MLS STATS through week ending 3/9/08
Pending Sales: 5567 (+265 from last week)
Active with Contingency Contracts*: 1001 (+77 from last week)
Total Contracts: 6568 (+342 from last week)
Closed Escrows 3/3/08-3/09/08 682 ( -617 from last week)
Active Listings: 55988 ( +161 from last week)
Month To Date Closed (3/9/08): 743
There is some real sense of optimism about the resale market developing here. We continue to post strong gains in both pending sales and AWC contracts. That we have hit a 1000 AWC contracts is a milestone, without a doubt. We hadn't hit half that many since I began my blog last summer, until January. We have also seen the pending number continue to climb into what we would have to call a respectable level. Obviously, we would all like to see that number continue to climb, if we can. 6500 contracts is a great milestone, and if we can maintain that pace, we would be in good shape by the end of the year. The problem is, that pace slows due to seasonal considerations in the fall especially, and we will have to have made a pretty strong showing by then if we wish to show real progress from last year.
More puzzling to me is that seemingly little of this increased level of pending sales has manifested itself in the Closed Escrows yet. January was abysmal, and I thought February might be better, as it was in the middle of January when we started seeing this spike in contracts. However, it didn't happen, and February was about as weak as January, and March isn't exactly starting out gangbusters either. Closed escrows will have to start showing up in March, or it means the traditional model of 45 days or less closings is deeply flawed.
The other mediocre aspect here is that active listings rose a bit this past week...not completely unexpected, as it is the beginning of the month, and it frequently does increase in that time period. However, we really need to see that number coming down if we are to return to a healthy resales market. It is not an overly high number, as it is certainly off its peak by several thousand, but I think a number in the low forties or even high thirties would be much more appropriate for a healthy market of our size. That would be about the supply that most markets have-we in the valley have been spoiled with a less than 3 month market time traditionally, but those days may be past.
One last general statement. I have seen some different statistics for new home sales-it is very difficult to gauge their accuracy, so I don't report them, but indications are that they are still muddling along. They are up from the beginning of the year, but are half of what they were this time last year. Builders have reduced inventory for 10 months in the row nationally, so I still believe we will reach equilibrium in the new home market long before resales, but we don't want it to be at current sales levels, which are far too low. If one major survey taker is to be believed, which I tend to do, as he has posted some very unflattering numbers previously, then we are at the lowest point of spec inventory in at least six months, and likely much longer, as the spec inventory was quite high for a much longer period before that. Builders have smartly reined in the inventory, as well as prices, and we will start to see that work its way through the system. There certainly seems to be a great deal of land available for builders to develop, and that unfortunately, means the land market will continue to suffer for another quarter most assuredly. One last thing about the builder sales: although it is a mediocre number currently compared to the same time last year, last year also spent most of the last three quarters below the rate of sale we are currently at, so if this dull but steady number continues or increases modestly, it will end up being favorable to last year.
MLS STATS through week ending 3/9/08
Pending Sales: 5567 (+265 from last week)
Active with Contingency Contracts*: 1001 (+77 from last week)
Total Contracts: 6568 (+342 from last week)
Closed Escrows 3/3/08-3/09/08 682 ( -617 from last week)
Active Listings: 55988 ( +161 from last week)
Month To Date Closed (3/9/08): 743
There is some real sense of optimism about the resale market developing here. We continue to post strong gains in both pending sales and AWC contracts. That we have hit a 1000 AWC contracts is a milestone, without a doubt. We hadn't hit half that many since I began my blog last summer, until January. We have also seen the pending number continue to climb into what we would have to call a respectable level. Obviously, we would all like to see that number continue to climb, if we can. 6500 contracts is a great milestone, and if we can maintain that pace, we would be in good shape by the end of the year. The problem is, that pace slows due to seasonal considerations in the fall especially, and we will have to have made a pretty strong showing by then if we wish to show real progress from last year.
More puzzling to me is that seemingly little of this increased level of pending sales has manifested itself in the Closed Escrows yet. January was abysmal, and I thought February might be better, as it was in the middle of January when we started seeing this spike in contracts. However, it didn't happen, and February was about as weak as January, and March isn't exactly starting out gangbusters either. Closed escrows will have to start showing up in March, or it means the traditional model of 45 days or less closings is deeply flawed.
The other mediocre aspect here is that active listings rose a bit this past week...not completely unexpected, as it is the beginning of the month, and it frequently does increase in that time period. However, we really need to see that number coming down if we are to return to a healthy resales market. It is not an overly high number, as it is certainly off its peak by several thousand, but I think a number in the low forties or even high thirties would be much more appropriate for a healthy market of our size. That would be about the supply that most markets have-we in the valley have been spoiled with a less than 3 month market time traditionally, but those days may be past.
One last general statement. I have seen some different statistics for new home sales-it is very difficult to gauge their accuracy, so I don't report them, but indications are that they are still muddling along. They are up from the beginning of the year, but are half of what they were this time last year. Builders have reduced inventory for 10 months in the row nationally, so I still believe we will reach equilibrium in the new home market long before resales, but we don't want it to be at current sales levels, which are far too low. If one major survey taker is to be believed, which I tend to do, as he has posted some very unflattering numbers previously, then we are at the lowest point of spec inventory in at least six months, and likely much longer, as the spec inventory was quite high for a much longer period before that. Builders have smartly reined in the inventory, as well as prices, and we will start to see that work its way through the system. There certainly seems to be a great deal of land available for builders to develop, and that unfortunately, means the land market will continue to suffer for another quarter most assuredly. One last thing about the builder sales: although it is a mediocre number currently compared to the same time last year, last year also spent most of the last three quarters below the rate of sale we are currently at, so if this dull but steady number continues or increases modestly, it will end up being favorable to last year.
Tuesday, March 4, 2008
MLS STATS 3/2/08
Pending Sales 3/4/08 5302 ( -48 from last week)
Pending Sales + AW/C 6226 ( -49 from last week)
Closed Escrows: 1299 ( +573 from last week)
Active Listings: 55827 ( -277 from last week)
Closed in February: 3413
Statistics seem to show that new contract increases have peaked...if that number stays consistent, its actually not bad, but it would be nice to see it continue to climb. It might be that it simply was the end of the month, and new contracts seem to stale a bit at the end of the month. It certainly wasn't much of a drop, so if we can keep this pace, it is a good sign. We will want to watch to see if there are further drops in new contracts. Sales ended up at about the same level as January, which isn't great, but it should mean that March is a good sales month, as there are some aging pendings out there, and they will have to show up as sales eventually.
Additionally, the number of actives has fallen for two weeks in a row. It wasn't a large drop last week, but it would be great to see that number fall further. AWC contracts held pretty steady, so that is a good sign. March will tell us a lot about this year.
chris
Pending Sales + AW/C 6226 ( -49 from last week)
Closed Escrows: 1299 ( +573 from last week)
Active Listings: 55827 ( -277 from last week)
Closed in February: 3413
Statistics seem to show that new contract increases have peaked...if that number stays consistent, its actually not bad, but it would be nice to see it continue to climb. It might be that it simply was the end of the month, and new contracts seem to stale a bit at the end of the month. It certainly wasn't much of a drop, so if we can keep this pace, it is a good sign. We will want to watch to see if there are further drops in new contracts. Sales ended up at about the same level as January, which isn't great, but it should mean that March is a good sales month, as there are some aging pendings out there, and they will have to show up as sales eventually.
Additionally, the number of actives has fallen for two weeks in a row. It wasn't a large drop last week, but it would be great to see that number fall further. AWC contracts held pretty steady, so that is a good sign. March will tell us a lot about this year.
chris
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