CLOSINGS TOP 1700 LAST WEEK; 5600+ SALES FOR MAY!
Active listings Drop sharply, Slide into 52K range!
PENDING SALES: 6938 ( -525 from Last week)
AWC Contracts: 1456 ( -16 from Last week)
TOTAL Contracts: 8394 ( -541 from Last week)
Active Listings: 52,877 ( -1225 from Last week)
CLOSED ESCROWS (weekly thru 6/1): 1,786 ( +576 from Last week)
CLOSED IN MAY: 5,652 ( April '08 Sales: 4863 , May 07= 5,774)
ARMLS Sales were up sharply for May from April, hitting the highest monthly sales since last May. The preliminary figure doesn't quite reach last May's total, but is very close, and last May was still a little before the real bubble burst. There might be a few stragglers roll in, but we probably won't catch last year's total. We are likely, given current trends, to reach June 07 sales next month, which would be the first time we have surpassed the sales figure for a month in quite some time. This is relevant, as it shows that we are maybe seeing the bottom. July and subsequent months are very poor, and we should surpass those months, and be in positive territory year-over-year for the rest of the year. This would signify that the market is returning to some normalcy.
Another significant development is that active listings took a large dip, and have now fallen into the 52K range. It might take a few more months to leave the 50K's, but that is an important milestone. It is still too high a number, but our long term figure for equalization of the market is going to be in the low 40's most likely, as sales will likely average in the 60K-70K in the near term, and go a bit higher in strong cycles. That means a six month supply of homes, which is fairly normal for most markets, it seems. It seems a lot for our market, but we are now a bit more mature, and I think the time of easy and quick sales are over, and homeowners will sit for a while longer than 60-90 days if they are trying to maximize their price, and wait for the well-heeled and qualified buyer. I am looking for a target number of 44,000 listings by the end of the year. If we have a recovery, it could happen sooner. If we have an economic stall, then the forecast will be null and void, and we will be flooded with homes.
The current activity numbers all take a beating during the final week of the month, as closings deplete the pending sales numbers. In past months, we have seen the numbers recover in the second week, so we will keep an eye on that for that trend.
One deeper number that I don't normally speak to here is the single family home sales. May 08 actually beat May 07 in that department: 4899 to 4660. That is significant, as a high percentage of May of this year's sales were single family homes. I do prefer the overall sales figures, even though they may include a few timeshares here and there. I started with that total, and to keep consistent, I will continue to use it. It is worth noting here about the single family sales though, as SFD are the largest portion of the market by a large margin, and the trend there is that we are up over last year. Less condos are being sold as people may want to hold on to them as it is cheaper living, or they may have decided to rent them out; I don't really know, but the fact remains that a lot more of the "other" product beside single family made up a larger share of 2007 sales than they did this year.
I will be posting an updated graph like the one I did a month or so ago shortly.
Some very encouraging positives can be taken from May, but I am going to anxiously await the recovery of pending home sales this week. That number will need to grow, or it means we have plateaued for the short term at May's sales. May was decent, and will be fine if we are on an uptrend, but if we fail to hold the trend, there may be deeper problems in regards to the economy that we will now be dealing with in addition to the inventory glut.
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