All statistics going in the right direction last week
Pending Sales 7106 (+39 from last week)
Active With Contingency 1329 ( +75 from last week)
Total Contracts 8435 ( +114 from last week)
Closed Escrow 4.21-4.27.08 1092 ( +11 from last week)
Active Listings 55472 ( -115 from last week)
Closed Month to Date (4.27.08) 3627
All the numbers were working toward the right direction in the last week. The new contracts continues to grow, while the the pendings did only slightly. I was expecting to get to do a headline that "combined contracts crossed 8500" as they were temporarily yesterday, but we are nearing the end of the month, and there is a concentration of closings this week, so many pendings came off the board. Which is a good thing, obviously. Allof the other stats show another week of stability in the market, albeit in the face of more negative national news. We still have an overloaded inventory, to be sure, but if sales can continue to grow despite these challenges, we will eventually start coming out of this. We have shaved several hundred properties off the MLS inventory number over the last few weeks, but it is still an almost insignificant change. I think we will hit an increase in sales for the month over March, and that is including having one less day to do it in. It seems prices will likely remain weak for the time being as inventory still overhangs any sales growth. This will likely lead eventually to increased sales, as the large attractive market of lower priced homes will bring people here, and convince potential first time home buyers to make a move to ownership. It is the law of economics, despite what naysayers wish to crow about the undoing of the housing market. It is not a matter of "if", it is a matter of "when", and in the scope of things, that could be some more time. Still, it is hard not to read into this with some optimism that we are starting to turn the tide. I have been talking to homebuilders to have been snapping up finished lots at discounted prices, getting ready for the next cycle. The building prices are undoubtedly going to be lower than what we have seen, as the market paradigm has shifted from the frivolous nature of the construction boom that started in the early part of the decade-don't expect to see granite in every spec home in the new subdivisions.
This ties into the land market. Many areas have been hard hit by the home price deflation. Custom home areas like Wittmann, Desert Hills, and North Scottsdale which once boasted impressive land price acceleration due to the evermore luxurious construction, have fallen into a funk, and prices have decreased accordingly, and there are still relatively few buyers. Smart money is starting to pick up these lots at bargain prices, but there is no urgency yet from land investors, as they still feel the price will be the same or lower 6 months from now. We have not reached the interest level for investors yet in this recovery for much of this kind of property. There are few sales, and the sales that have occurred have been at incredibly soft pricing. I did read that March new home sales ticked up over the previous month, but it is still to soft to give the builders much optimism.
It will be interesting to see how things play out in the summer months.
chris
Tuesday, April 29, 2008
Tuesday, April 22, 2008
MLS STATS 4/14-4/20/08
Pending Contracts Top 7000, Inventory Falls Slightly
Pending Contracts: 7067 ( +206 from last week)
AWC Contracts: 1254 ( +3 from last week)
Total Contracts: 8321 ( +209 from last week)
Closed Escrows 4/14-4/20/08 1081 ( +338 from last week)
Active Listings: 55,587 ( -173 from last week)
Month to Date Closings 4/20/08 2,480
Buying activity is still growing, according to the MLS, as we have reached a new high for the year in pending sales. Sales are stretching out longer than what we would expect however, as closed escrows have been slow to swell at the same rate of increase as contracts. It occurred to me that this phenomenon is likely linked to there being quite a few short sales in the pending category, which could explain why these pendings are taking so long. I don't know that all realtors mark short sales as pending contracts once their seller has agreed to it or not-I have recently seen it done both ways-but I am certain a percentage are being considered pendings, and as I have found, short sales tend to drag out for many more weeks than normal. I doubt that is a comprehensive answer as to why we have doubled pendings, yet have only marginally increased sales. The pendings growth has been impressive, while sales growth, while it is getting better, has not followed the same trend line. April is not going to be a breakout month for sales, although it might surpass March. We still have increasing pending sales figures, which point to us being in a recovery mode, but we still are in a softer market than most of us would like. Another positive, although it is not a trend yet, is that active listings went down. They haven't climbed substantially for some months, but neither have they retreated. We would need to fall under 50,000 for me to feel that we are turning the corner on this market, and we have not been able to shave this number despite all of our gains this year so far. Maybe this is a start. The important thing is that pendings continue to grow, which they seem to be doing. You can't get to closings without first getting to pendings, and as long as we can point to pending growth, we can take it as a sign of better things to come. As far as pricing goes, despite increased sales, the amount of inventory dictates we may see prices slide a bit further until inventory comes into line. That doesn't mean that the home someone is purchasing is going to down in value-it is still an excellent time to buy given prices and interest rate, and the relative amount of homes that are now underpriced, and a broad selection of them-there are enough good deals out there, and those will simply sell first, and the market price deals will not. Over pricing is still the reason so many homes are on the market, and it will affect how long it sits on the market, and ultimtaely affecting long term pricing.
Pending Contracts: 7067 ( +206 from last week)
AWC Contracts: 1254 ( +3 from last week)
Total Contracts: 8321 ( +209 from last week)
Closed Escrows 4/14-4/20/08 1081 ( +338 from last week)
Active Listings: 55,587 ( -173 from last week)
Month to Date Closings 4/20/08 2,480
Buying activity is still growing, according to the MLS, as we have reached a new high for the year in pending sales. Sales are stretching out longer than what we would expect however, as closed escrows have been slow to swell at the same rate of increase as contracts. It occurred to me that this phenomenon is likely linked to there being quite a few short sales in the pending category, which could explain why these pendings are taking so long. I don't know that all realtors mark short sales as pending contracts once their seller has agreed to it or not-I have recently seen it done both ways-but I am certain a percentage are being considered pendings, and as I have found, short sales tend to drag out for many more weeks than normal. I doubt that is a comprehensive answer as to why we have doubled pendings, yet have only marginally increased sales. The pendings growth has been impressive, while sales growth, while it is getting better, has not followed the same trend line. April is not going to be a breakout month for sales, although it might surpass March. We still have increasing pending sales figures, which point to us being in a recovery mode, but we still are in a softer market than most of us would like. Another positive, although it is not a trend yet, is that active listings went down. They haven't climbed substantially for some months, but neither have they retreated. We would need to fall under 50,000 for me to feel that we are turning the corner on this market, and we have not been able to shave this number despite all of our gains this year so far. Maybe this is a start. The important thing is that pendings continue to grow, which they seem to be doing. You can't get to closings without first getting to pendings, and as long as we can point to pending growth, we can take it as a sign of better things to come. As far as pricing goes, despite increased sales, the amount of inventory dictates we may see prices slide a bit further until inventory comes into line. That doesn't mean that the home someone is purchasing is going to down in value-it is still an excellent time to buy given prices and interest rate, and the relative amount of homes that are now underpriced, and a broad selection of them-there are enough good deals out there, and those will simply sell first, and the market price deals will not. Over pricing is still the reason so many homes are on the market, and it will affect how long it sits on the market, and ultimtaely affecting long term pricing.
Tuesday, April 15, 2008
MLS Stats through 4/13/08
Pending + Active with Contingency top 8000!
Week of 4/7/08-4/13/08
Pending Transactions: 6861 (+587 from last week)
AWC Contracts: 1251 (+79 from last week)
Total Contracts: 8112 (+666 from last week)
Closed Transaction 4/7- 4/13/08 743 ( -312 from last week)
Active Listings: 55760 (+59 from last week)
Month To Date Closings (4/13/08) 1372
We are continuing to see sales activity rise in the Valley, but we have still not seen a great surge in closings. Certainly our closings have increased , as March was a much better month than January or February, but it seems the pending sales have become somewhat stretched out, and are not falling in a 45 day window. We have what is getting to be a very healthy number of pending sales, which is practically double the number for most of the second half of last year, but we haven't yet seen this show up in comparable closings. We also have the AWC contracts, which have almost tripled since the beginning of the year, and they seem to be contributing to the vastly increased pendings, but we seem to have longer escrows for many of these deals, as this increased trend started in the first quarter. Perhaps the end of April will yield a large crop of closings. We have about two full business weeks to make our numbers, and we are on a poor pace for closings so far. Certainly the last week will yield better results, but so far, the month is soft for closings. The sheer amount of pendings will eventually have to show up somewhere. They are there, they just aren't affecting closings yet.
Another troubling aspect is that I felt we would be in prime inventory cutting season right now, and we have done almost nothing to reduce inventory on the market. It is essentially flat, and not growing any measureable amount, but we are not reducing. We may still see increasing sales, but that kind of inventory means prices stay flat or even decrease, even if gross sales are high. It is the number that I fear the most, as it means that more people are still trying to dump their homes, even in a poor sales environment. That doesn't speak well to the economy or people's confidence in owning a home.
Generally speaking, the new home sales figures for the past week improved sharply, and we are seeing a lot less cancellations, which has been a big problem for many of the new home sellers. They have also generally done a good job of cutting backing inventory and subdivisions, which reduces their operating cost, and limits the downward pressure on prices due to oversupply. We would all like to see more activity, but they are running lean right now, and hopefully their turnaround isn't too far down the road. They have certainly reduced prices accordingly, and you can buy new housing in some areas of Phoenix proper in the mid-100's again. Didn't think I would be saying that again. Also, I went by a subdivision in East Maricopa a few weeks ago with homes starting in the $80k's...that is a tremendous value, and eventually people will realize that fact. One new housing index I observe shows that while we are down from last year's first quarter, we are at a level that suggests that the new home market is poised to do better then the last three quarters of last year.
Overall, a better week in many respects-sharply higher buying activity specificially- but I would like to see those mid month weekly sales touching in the 1000's again. That ensures a healthy number at the end of the month. It is tax time, and that may have something to do with the poor showing so far, but maybe this next week will post improved sales.
Week of 4/7/08-4/13/08
Pending Transactions: 6861 (+587 from last week)
AWC Contracts: 1251 (+79 from last week)
Total Contracts: 8112 (+666 from last week)
Closed Transaction 4/7- 4/13/08 743 ( -312 from last week)
Active Listings: 55760 (+59 from last week)
Month To Date Closings (4/13/08) 1372
We are continuing to see sales activity rise in the Valley, but we have still not seen a great surge in closings. Certainly our closings have increased , as March was a much better month than January or February, but it seems the pending sales have become somewhat stretched out, and are not falling in a 45 day window. We have what is getting to be a very healthy number of pending sales, which is practically double the number for most of the second half of last year, but we haven't yet seen this show up in comparable closings. We also have the AWC contracts, which have almost tripled since the beginning of the year, and they seem to be contributing to the vastly increased pendings, but we seem to have longer escrows for many of these deals, as this increased trend started in the first quarter. Perhaps the end of April will yield a large crop of closings. We have about two full business weeks to make our numbers, and we are on a poor pace for closings so far. Certainly the last week will yield better results, but so far, the month is soft for closings. The sheer amount of pendings will eventually have to show up somewhere. They are there, they just aren't affecting closings yet.
Another troubling aspect is that I felt we would be in prime inventory cutting season right now, and we have done almost nothing to reduce inventory on the market. It is essentially flat, and not growing any measureable amount, but we are not reducing. We may still see increasing sales, but that kind of inventory means prices stay flat or even decrease, even if gross sales are high. It is the number that I fear the most, as it means that more people are still trying to dump their homes, even in a poor sales environment. That doesn't speak well to the economy or people's confidence in owning a home.
Generally speaking, the new home sales figures for the past week improved sharply, and we are seeing a lot less cancellations, which has been a big problem for many of the new home sellers. They have also generally done a good job of cutting backing inventory and subdivisions, which reduces their operating cost, and limits the downward pressure on prices due to oversupply. We would all like to see more activity, but they are running lean right now, and hopefully their turnaround isn't too far down the road. They have certainly reduced prices accordingly, and you can buy new housing in some areas of Phoenix proper in the mid-100's again. Didn't think I would be saying that again. Also, I went by a subdivision in East Maricopa a few weeks ago with homes starting in the $80k's...that is a tremendous value, and eventually people will realize that fact. One new housing index I observe shows that while we are down from last year's first quarter, we are at a level that suggests that the new home market is poised to do better then the last three quarters of last year.
Overall, a better week in many respects-sharply higher buying activity specificially- but I would like to see those mid month weekly sales touching in the 1000's again. That ensures a healthy number at the end of the month. It is tax time, and that may have something to do with the poor showing so far, but maybe this next week will post improved sales.
Tuesday, April 8, 2008
Weekly Sales 3/31-4/6/08
Weekly Buying Activity:
Pending Transactions: 6274 ( +568 from last week)
AWC Contracts: 1172 ( +57 from last week)
Total Contracts: 7446 ( +625 from last week)
Closed Transactions 3/31/08 1055 ( -210 from last week)
Active Listings: 55701 (+40 from last week)
MTD Sales: 630
Another strong week of buying activity. I know much of this is seasonal improvement, but it is showing very positive gains. Looking inside the numbers, we saw a very sharp jump in pending sales. Now, if pending sales are coming out of AWC contracts, that means even with the big number of AWC converting to pending, we had enough new contracts come in to more than replace them. That is a sure sign of strength. We have almost 7500 homes under contract, and that is a very workable number long term. We would all like to get back to the 11000 sales numbers of 2005, but that is probably not healthy long term, so if we can keep this pace, we will be doing well. The active stayed flat, which isn't helpful, as apparently many sellers are still putting homes on the market. I had hoped that the bulk of these sellers had already done so, but apparently not, as we are cutting into the active listings only very slowly.
New home sales are on a much slower pace than 1st quarter last year, but in the most recent week were up sharply. There are also seems to be fewer cancellations. While this could happen for any number of reasons, fewer cancellations leads to more confidence for builders and buyers, and could denote a settling down of the volatility of buyer emotions in the market.
This is an upbeat report, and while I am always optimistic so you can take this with a grain of salt, read through my posts since the beginning of 2008, and you will see the markedly upward trend of the resale market. Sales so far are incrementally better than the fall, but we keep seeing increasing strong buying trends, and those numbers will start making positive news eventually.
Pending Transactions: 6274 ( +568 from last week)
AWC Contracts: 1172 ( +57 from last week)
Total Contracts: 7446 ( +625 from last week)
Closed Transactions 3/31/08 1055 ( -210 from last week)
Active Listings: 55701 (+40 from last week)
MTD Sales: 630
Another strong week of buying activity. I know much of this is seasonal improvement, but it is showing very positive gains. Looking inside the numbers, we saw a very sharp jump in pending sales. Now, if pending sales are coming out of AWC contracts, that means even with the big number of AWC converting to pending, we had enough new contracts come in to more than replace them. That is a sure sign of strength. We have almost 7500 homes under contract, and that is a very workable number long term. We would all like to get back to the 11000 sales numbers of 2005, but that is probably not healthy long term, so if we can keep this pace, we will be doing well. The active stayed flat, which isn't helpful, as apparently many sellers are still putting homes on the market. I had hoped that the bulk of these sellers had already done so, but apparently not, as we are cutting into the active listings only very slowly.
New home sales are on a much slower pace than 1st quarter last year, but in the most recent week were up sharply. There are also seems to be fewer cancellations. While this could happen for any number of reasons, fewer cancellations leads to more confidence for builders and buyers, and could denote a settling down of the volatility of buyer emotions in the market.
This is an upbeat report, and while I am always optimistic so you can take this with a grain of salt, read through my posts since the beginning of 2008, and you will see the markedly upward trend of the resale market. Sales so far are incrementally better than the fall, but we keep seeing increasing strong buying trends, and those numbers will start making positive news eventually.
Thursday, April 3, 2008
UPDATE: MARCH CLOSINGS finishes at 4,276
*A fairly accurate final tally of ARMLS closings in March is 4,276....getting back to a respectable level.
I have also heard that mortgage applications are rising, on the strength of sub 5.75% interest rates, and falling home prices. Falling prices is a temporary pain, but people buying homes is the biggest private economic driver we have in this country.
I have also heard that mortgage applications are rising, on the strength of sub 5.75% interest rates, and falling home prices. Falling prices is a temporary pain, but people buying homes is the biggest private economic driver we have in this country.
Tuesday, April 1, 2008
MLS WEEKLY Stats Through 3/30/08
March Sales Surpass 4000- Up 23% from February!
This past week's stats are through 3/30/08, but I am also giving you the end of month sales as of April 1st A.M. There are likely some stragglers on the number of homes sold in March, as agents haven't entered them yet, but we did have a good end of month and blew through 4000 sales for March. It is not a huge number, but it is significant. Here are the numbers:
Pending Sales: 5706 ( -294 from last week)
AWC Contracts: 1115 ( +7 from last week)
Total Contracts: 6821 ( -287 from last week)
Closed 3/24-3/30: 1265 ( +450 from last week)
Active Listings: 55,661 ( -873 from last week)
Closed MTD 3/31/08: 4,214 ( +801 from February) +23%
We did in fact have a strong end of the month, and we are likely to add a few more when all the agents get their postings in. It is not as good as we all would like to see it, but nevertheless, it is a positive figure. The pending number went down, as is typical in strong end of months, but our AWC contracts kept up its pace, and we will probably see the pendings climb again next week. The final sales figure for the month that you see published in the Republic will likely be higher than my figure, as it has been historically. I am not sure what they use for their calculations, but mine are according to the raw data of the ARMLS.
Before we get ahead of ourselves here, the March numbers are supposed to be better than the February numbers, so we can't get that excited. Things are looking better though. An added bonus is that there was a significant decrease in the amount of active listings this past week, so that is good. However, at that attrition rate, it would take six months to lower the number down to a manageable figure in the mid 30k's...We would have to see some serious acceleration of the market to keep up that average. I think the number of active listings contributes more to the decrease in home values than it is does directly affect the raw sales, however. In a cumulative effect, it does impact total sales, as a huge supply of homes causes soft pricing which might dissuade people from buying now, as they wait for the bottom, but this is a secondary or even tertiary effect on sales going forward. We may have reached bottom already, and are seeing more people view housing as a good deal, given rates and selection and low possibility of massive price declines forthcoming. Families still need homes, and this is where we are seeing strength-in lower priced working family homes.
This past week's stats are through 3/30/08, but I am also giving you the end of month sales as of April 1st A.M. There are likely some stragglers on the number of homes sold in March, as agents haven't entered them yet, but we did have a good end of month and blew through 4000 sales for March. It is not a huge number, but it is significant. Here are the numbers:
Pending Sales: 5706 ( -294 from last week)
AWC Contracts: 1115 ( +7 from last week)
Total Contracts: 6821 ( -287 from last week)
Closed 3/24-3/30: 1265 ( +450 from last week)
Active Listings: 55,661 ( -873 from last week)
Closed MTD 3/31/08: 4,214 ( +801 from February) +23%
We did in fact have a strong end of the month, and we are likely to add a few more when all the agents get their postings in. It is not as good as we all would like to see it, but nevertheless, it is a positive figure. The pending number went down, as is typical in strong end of months, but our AWC contracts kept up its pace, and we will probably see the pendings climb again next week. The final sales figure for the month that you see published in the Republic will likely be higher than my figure, as it has been historically. I am not sure what they use for their calculations, but mine are according to the raw data of the ARMLS.
Before we get ahead of ourselves here, the March numbers are supposed to be better than the February numbers, so we can't get that excited. Things are looking better though. An added bonus is that there was a significant decrease in the amount of active listings this past week, so that is good. However, at that attrition rate, it would take six months to lower the number down to a manageable figure in the mid 30k's...We would have to see some serious acceleration of the market to keep up that average. I think the number of active listings contributes more to the decrease in home values than it is does directly affect the raw sales, however. In a cumulative effect, it does impact total sales, as a huge supply of homes causes soft pricing which might dissuade people from buying now, as they wait for the bottom, but this is a secondary or even tertiary effect on sales going forward. We may have reached bottom already, and are seeing more people view housing as a good deal, given rates and selection and low possibility of massive price declines forthcoming. Families still need homes, and this is where we are seeing strength-in lower priced working family homes.
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