Weekly Sales Down, August to be lower than July Sales
Pending Sales Climbing Again, Active listings falling slightly
Pending Sales: 7,255 ( +221 from last week)
AWC: 1,091 ( +10 from last week)
Closed Escrows (as of 8/24) 1,114 ( -142 from last week)
Closed MTD (8/24) 3,685 (3,801 as of July 24, '08)
Active Listings: 52,408 ( -98 from last week)
SINGLE FAMILY QUICK STATS
Pending: 6,512 ( +206 form last week)
Closed Escrows: 990 (-150 from last week)
Closed MTD: 3,308
Active: 42,955 ( -78 from last week)
Just a few quick thoughts about this week's stats. Sales should end up the month okay, but are going to be less than July. That is somewhat negative news, but that is seasonal adjustment components as well. We should end up in the 5,000's somewhere; not great but better than last August by a long way. (August 07- 4,307 Closed) This is encouraging that our bottom locally may have happened last summer.
Pending Sales have rebounded a bit, after struggling near the 7000 level for a while; hopefully this will continue. I have little faith in the AWC numbers; I don't think agents are entering them in the same manner as in the previous system, so that statistic as a measuring device may be a casualty of the new MLS system. ARMLS already knows my thoughts about this new system and how little additional utility we get out of it for a ridiculous bump in fees while we are in a soft market, but most of you aren't interested in that.
We are running slightly behind July 08, figures, intimating that are sales will fall short of last month. Barring some unforeseen sales surge, I think that will hold up and we will fall short of July.
Actives are slipping a bit, and its possible we could see it fall into the 51K's at the end of August. For this number to really fall, it will require a big jump in sales, which is not likely to happen in the fourth quarter. The fourth quarter is not traditionally a strong home sales quarter in Arizona, so we may have to wait until next year for something that looks like a recovery. A consistent drop in inventory would be the goal for the end of the year. The actual sales numbers will be better than last year, but they will likely be lackluster. If we were to fall into the high 40K's in overall listings, and in to the high 30k's for single family listings, I think we could look on that as success going into the new year.
I should also mention the national housing news, as it has been in the media this week. Resales climbed 3.1% in July nationally, a very nice increase that I was expecting based on our strong local performance. It is being spun badly in the news, with the authors focusing on falling prices. I have addressed this before, but I would much rather see falling prices than no sales. There was a report on Fox business channel yesterday in chicago about a formerly nice home that couldn't be sold for $119K, and because it didn't sell, thieves stripped it of all saleable materials-wiring, pipes, appliances, etc. The house is now for sale for $11K. It is ruined. We don't encounter that as much here because our market at least has some forward progression. I am thankful for that. The falling prices are distressing certainly, and sometimes devastating for the individual, but for the market as a whole, it is adapting here, and while we may see some falling prices still, our market is getting healthier. The price drops were inevitable in some submarkets, but we are selling more homes than we were before, so that means more people believe in the market than they did a year ago at this time.
The other news is that new homes sales numbers were also up nationally, in a sign that there is some pent-up demand among those buyers who were shut out in the 2005 spike. There are some exceptional deals in new homes now, rates are low, and I think people are finally realizing it. The tax credit of $7500 is only going to help first time homebuyer sales in the near future, and we may experience a mini-spike in entry home markets in the next two quarters, although I am skeptical that it is enough to move the market substantially.
Builder inventory in the valley has been falling for months, and most are running pretty lean. They are not big contributors to the glut of homes right now, but they are sitting on a wealth of lots that they would like to build on. I think some more trimming in resale inventory is needed before builders start recovering now. I had always been of the belief that builders would recover first, but I think the high price of gasoline has prevented this from happening. Cheap, not just reasonable, but flat out low cost new housing exists on the fringes of Phoenix in Maricopa, especially, but the cost of driving for many people cancels out the bargain these homes provide. New homes starting in the $90k's in Maricopa is just flat out ridiculous, but there has not been a huge sales trend with these homes. It probably doesn't help that financing is tougher, but these events have conspired to blunt the impact of these low priced homes in the recovery effort.
My impression is that we are still six months away from the market looking healthy enough to call a recovery underway, but we are locally at least moving in the right direction.
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