MLS STATS 5/12/-5/18/08

MILD IMPROVEMENT IN ALL STATISTICS FOR THE WEEK, APRIL 08 surpasses April 07 sales; First month over month gain in 3 years.

Week of 5/12-5-5/18/08


Pending Sales: 7460 ( +87 from last week)

AWC Contracts: 1460 ( +46 from last week)

Total Contract: 8920 ( +133 from last week)

Active Listings: 54,188 ( -141 from last week)

Closed Escrows 5.12-5.18.08 1,240 ( +326 from last week)

Month to Date (5/18/08) 2,618

The weekly stats continue to show seasonal improvement in the resale market, with pending sales increasing even as the number of closed escrows increases. It shows we are getting a strong supply of new contracts that replace the morphing of AWC contracts into pendings, and that is an excellent sign of health. We certainly are not looking at blockbuster numbers, but we are ahead of April's pace.

I would like to say something about the AZ Republic report last week of 5585 home sales in April. That is higher than my conservative number of 4800+, which is derived from MLS sales only. I use that number for consistency, and I am glad that they are reporting a number that is even higher. I think it likely includes foreclosure sales, which I do not use, as that is often less about homebuyer activity than it is about investment activity. A home purchased at foreclosure is likely to turn up on the market in 6-12 months again, as the investor fixes it up and resells it. Not always, but that is often the case. Still a good month, as the figure they reported was higher than April 07, and the significance of that is it had not happened in 3 years. It speaks as much to the weakness by April 07 as it does to the strength of the recovery, however. We have had, even prior to the boom years, higher sales figures than that. April 2004 was 8889. That was a very good year, and many people think that was a boom time, but April 2003 was 7429, so obviously we are not back to full strength yet.

I do expect May to be a better month than April, and given the growing strength of pending sales, it could be a substantially better month, and I am looking for sales in the MLS to hit well into the 5K's. The Republic figure could hit 6K. That would be a good, and approaching the norm, as May 2002 was at 6,785. May 2003 was at 7428, so we are getting closer to a normal market as far as sales. It is not a perfect comparison, as we certainly have more homes in the city than in 2002-2003, but we have to also look at the challenging mortgage market, inflationary pressures, and negative consumer confidence. It is no small feat that we are as strong as we are, so we have to count our blessings.

The stat I haven't mentioned is the Active listings. This number is stubborn, and it has been in this range for a long while, but it is slowly slipping, and has been for several weeks. The number of listings is going to be critical to the short term value of homes, as it the Supply component of the equation, and it is still too high. It would be great to see that slip below 50K, and I think that would show a recovery in full effect. It would still be too high, but it would denote that maybe the worst was behind us.

All real estate is local, even on a micro scale, and while certain areas of the Metro area are still going to suffer price declines, as inventory and relative lack of uniqeness or features will work against them, some neighborhoods of the city are already firming up. There was an article last week about a new Blandford Home subdivision in Mesa at which people were camped out to get a chance at one of the lots. That is crazy on the surface, but the fact is that attractive neighborhoods still attract people, and this was obviously an attractive area. I could name other core areas, but the point is, certain areas are going to bear more of the brunt of coming price declines more than others. Some areas have bit the bullet already; the west valley sales are doing well, because the prices have seemed to adjust downward to where the Market will support them; Maricopa offers a mixed bag, as there are new homes selling for a lot less than resales, and that is going to affect resale prices for people that paid ultimately too much. The article a few weeks ago Pinal Co. resales was instructive though, in that the drastically increasing amount of resales can be attributed to the prices falling to where the market began to support them.

Another positive week, and a good number of sales for a middle of the month week, and I am increasingly optimistic that is a real recovery.