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.