Sales Fall, Pendings Rise Slightly, New Contracts Flat
Inventory Continues to Climb
Pending Sales: 6,515 ( +52 from last week)
Active w/Contingency: 1,047 ( +1 from last week)
Closed Escrows: 966 ( -75 from last week)
Active Listings: 54,143 ( +142 from last week)
Closed through 10/26/08 3,661
SINGLE FAMILY STATS
Pending Sales: 5,924 ( +63 from last week)
AWC 958 ( +3 from last week)
Closed Escrows: 872 ( -67 from last week)
Active: 44,580 ( +166 from last week)
Closed MTD : 3,302
The past week continues to show the difficulty we are facing in the housing market, locally and nationally. Our statistics are better than the first half of the year, but they are not showing improvement over the last several months, and this month could take a dramatic downturn from September. There are some seasonal considerations, of course, but if we were in a full recovery, it wouldn't matter, as the fact is, as good as September was, it would not be considered a great month in a decent market. For sales to reach even 5,000 in October, we will have to have a very strong last week. It is possible, of course, but given the relatively weak weekly showings in October, if we do reach 5000 sales, it won't be by much. We are looking for month to month growth, and that is not the case.
The other twist in the knot is that active listings continue to rise. I really thought with our sustained sales growth over the last half year, we would start cutting into inventory sharply by now, but instead, after making some early gains, we are moving closer to the high water marks than away from them. I don't know if its because banks are flooding the market with inventory, or if it is a case of better market news, giving people more hope they can put the house on the market now. I think it is likely the former.
The good news is nationally that sales rose both in new homes and in resales according to the most recent statistics. This was of course accompanied by the normal gloomy reporting of home prices falling.
We knew that prices are still going to recede for a while, as there is simply a lot of inventory driving the market. There is also the concept that people are going to buy lower priced homes, as they are not being driven by the "irrational exuberance" of the "McMansion" days. Simply put, buyers are looking for Basic Black. A good many of the homes being sold now are bank repos and short sales, and many of the homes they got back were for entry level buyers, so the homes that come on the market were originally from the lower end of the spectrum. This drags on the average price. Banks are trying to unload homes, even if its at a loss, so there is much downward pressure on pricing. It is a great time to be a bargain hunter. There is lots to choose from, at relative to the last 3 years, at very good prices.
That brings me back to my chief concern, which is of course, the inventory. Builders have brought their inventory down to manageable levels, but the glut of resales is our biggest obstacle right now. We are not going the right way with that number. Mccain's plan to bailout homeowners is not likely to be put in place, although it seems to me that before we spent the hundreds of billions bailing out banks, the taxpayers probably should have been helped in some way. I think I heard a stat yesterday that said that ridiculous program they came up with to help homeowners had all of 79 homeowners actually go through with it, while they were expecting as many as 400,000. Not a well designed plan if homeowners won't use it. I think it included giving up half your equity when you do finally sell the house in the future.
Still, we have to hope that the recent sales numbers like September will hold up. I have been perhaps a little too negative about October, but I had hoped for some build in numbers and reduction in inventory to cement the idea that we are on our way to recovery. Instead, we got treading water numbers. November through January are not typically very good months anyway, so don't expect to see any substantial good news about our market until February. That is why I had higher hopes for October-we are going to go through a seasonal decline, and it would have been nice to be able to point to October as a great "normal" month. If we can tread at the 5000 sales per month through November to January, I will actually consider that to be pretty good, however. Less homes tend to come on the market in November and December, so its possible if we have decent sales, we may also cut the inventory back in those months.
Tuesday, October 28, 2008
Tuesday, October 21, 2008
MLS STATS 10/13-10/19/08
PENDING ARE FLAT; ACTIVES RISING STEADILY
SALES NOT KEEPING PACE
PENDING SALES: 6,463 ( -107 from last week)
AWC: 1,046 ( + 11 from last week)
CLOSED ESCROWS: 1,041 (+157 from last week)
ACTIVE LISTINGS: 54,001 ( +532 from last week)
CLOSED MTD: (10/19) 2,644
SINGLE FAMILY STATS
PENDING SALES: 5,861 ( -86 from last week)
AWC: 955 ( +1 from last week)
CLOSED ESCROWS: 939 ( +144 from last week)
ACTIVE LISTINGS: 44,414 ( +437 from last week)
CLOSED MTD: 2,388
This week probably denotes that we are going to see the effects of the financial crisis hit us in the fourth quarter. The numbers are not promising. Sales are up a bit over last week, but they are still far too low to signal a good number at the end of the month. What's most troubling is the number of Listings-inventory keeps climbing, and as it took almost the whole year to make the progress of reducing listings by a few thousand, we have given all that ground back. We are going into the worst 4 months of sales during the year, and inventory is already rising. There is no doubt September was the best month we have had in a long time, but it appears the financial shock has caused more people to put their homes on the market, and given that this is not the time of year we absorb inventory, our recovery might stall for the next quarter. I think starting in February, we will start to see some good sales again, but we are going dormant for the next several months in all likelihood. People's confidence is shaken, and while we seem to have weathered it to some degree, and there also appears to be a plan in place by the Feds to bolster home prices as a key part of their rescue plan, it is going to take several months before we see that effect. In the meantime, inventory looks like it might continue to grow, and sales will dip seasonally, as they usually do. This is not going to help prices.
We are not on a good pace to hit 5500 sales in October; last month at the same date, we had 3,298 closed escrows already, compared to 2644 this month. That is not a good indicator. There might be a blowout at the end of the month, but that would be required to just get to 5000 sales. That is not an entirely bad number, given the last two years, we are adding inventory at a greater pace than sales, so it is indicating a lack of progress.
The good news is that September leading indicators were actually up, and gas prices are sliding rapidly, which may do more for consumer confidence than anything else. I heard Fargo ND, had a price of $2.38 this week! Our prices will fall similarly once we get to the winter blend of gas. This will help the consumer almost immediately, more so than any stimulus check.
We also have the "election effect" which seems to always slow down growth and optimism prior to choosing a president. After its over, America will get back to business with a renewed sense of optimism, no matter who wins-at least we hope so.
SALES NOT KEEPING PACE
PENDING SALES: 6,463 ( -107 from last week)
AWC: 1,046 ( + 11 from last week)
CLOSED ESCROWS: 1,041 (+157 from last week)
ACTIVE LISTINGS: 54,001 ( +532 from last week)
CLOSED MTD: (10/19) 2,644
SINGLE FAMILY STATS
PENDING SALES: 5,861 ( -86 from last week)
AWC: 955 ( +1 from last week)
CLOSED ESCROWS: 939 ( +144 from last week)
ACTIVE LISTINGS: 44,414 ( +437 from last week)
CLOSED MTD: 2,388
This week probably denotes that we are going to see the effects of the financial crisis hit us in the fourth quarter. The numbers are not promising. Sales are up a bit over last week, but they are still far too low to signal a good number at the end of the month. What's most troubling is the number of Listings-inventory keeps climbing, and as it took almost the whole year to make the progress of reducing listings by a few thousand, we have given all that ground back. We are going into the worst 4 months of sales during the year, and inventory is already rising. There is no doubt September was the best month we have had in a long time, but it appears the financial shock has caused more people to put their homes on the market, and given that this is not the time of year we absorb inventory, our recovery might stall for the next quarter. I think starting in February, we will start to see some good sales again, but we are going dormant for the next several months in all likelihood. People's confidence is shaken, and while we seem to have weathered it to some degree, and there also appears to be a plan in place by the Feds to bolster home prices as a key part of their rescue plan, it is going to take several months before we see that effect. In the meantime, inventory looks like it might continue to grow, and sales will dip seasonally, as they usually do. This is not going to help prices.
We are not on a good pace to hit 5500 sales in October; last month at the same date, we had 3,298 closed escrows already, compared to 2644 this month. That is not a good indicator. There might be a blowout at the end of the month, but that would be required to just get to 5000 sales. That is not an entirely bad number, given the last two years, we are adding inventory at a greater pace than sales, so it is indicating a lack of progress.
The good news is that September leading indicators were actually up, and gas prices are sliding rapidly, which may do more for consumer confidence than anything else. I heard Fargo ND, had a price of $2.38 this week! Our prices will fall similarly once we get to the winter blend of gas. This will help the consumer almost immediately, more so than any stimulus check.
We also have the "election effect" which seems to always slow down growth and optimism prior to choosing a president. After its over, America will get back to business with a renewed sense of optimism, no matter who wins-at least we hope so.
Tuesday, October 14, 2008
MLS STATS 10/6-10/12/08
LISTINGS RISE SHARPLY, SALES DROP
PENDING: 6570 ( +110 from last week)
AWC: 1,035 ( +29 from last week)
CLOSED ESCROWS: 884 ( -907 from last week)
ACTIVE LISTINGS: 53,469 ( +599 from last week)
CLOSED MTD: 1,533
SINGLE FAMILY STATS
PENDING: 5,947 ( +103 from last week)
AWC: 954 ( +22 from last week)
ACTIVE LISTINGS: 43,977 ( +536 from last week)
CLOSED ESCROWS: 795 ( -825 from last week)
CLOSED MTD: 1,379
This past week was a terrible one for confidence in the global financial system. The stock market was rocked, and confidence was just hammered, and it seems like maybe it took a toll on housing. The amount of closings shriveled, and the number of homes on the market shot up unexpectedly. The pending number is decent, but not really strong, and I have to think that the financial scare is going to affect October and November's housing numbers now. It does appear more people are putting homes on the market, as either this financial scare affected them, or that the increasing amount of sales makes people think that it is feasible to get a home on the market again.
Other people are more optimistic about October, although I am not really sure what they are basing that on. This is an article from The Republic about investors chasing lower priced houses. I don't think that October will be a banner month for sales; I am hoping that it will hold up to September and August, or even somewhat close to that. This past week was way below what a weekly closed figure has been lately, and it makes it tough to recover over the next few weeks to get to even 5000 sales, a number that is far below what the last several have been. Granted, people had a lot of other things on their mind this past week, but the numbers should really have been better than this.
I don't even want to get into the Active listings...they have been climbing, despite our increasing sales, and I don't think there is any denying that fact. While our new construction inventory has now fallen below its historical high water mark, resales are still clogging up the system, and until that number starts to fall we will not reach a pricing bottom. We have reached a sales bottom, I think, a year ago almost, but pricing pressure is still downward, as we can't seem to get past this inventory point.
PENDING: 6570 ( +110 from last week)
AWC: 1,035 ( +29 from last week)
CLOSED ESCROWS: 884 ( -907 from last week)
ACTIVE LISTINGS: 53,469 ( +599 from last week)
CLOSED MTD: 1,533
SINGLE FAMILY STATS
PENDING: 5,947 ( +103 from last week)
AWC: 954 ( +22 from last week)
ACTIVE LISTINGS: 43,977 ( +536 from last week)
CLOSED ESCROWS: 795 ( -825 from last week)
CLOSED MTD: 1,379
This past week was a terrible one for confidence in the global financial system. The stock market was rocked, and confidence was just hammered, and it seems like maybe it took a toll on housing. The amount of closings shriveled, and the number of homes on the market shot up unexpectedly. The pending number is decent, but not really strong, and I have to think that the financial scare is going to affect October and November's housing numbers now. It does appear more people are putting homes on the market, as either this financial scare affected them, or that the increasing amount of sales makes people think that it is feasible to get a home on the market again.
Other people are more optimistic about October, although I am not really sure what they are basing that on. This is an article from The Republic about investors chasing lower priced houses. I don't think that October will be a banner month for sales; I am hoping that it will hold up to September and August, or even somewhat close to that. This past week was way below what a weekly closed figure has been lately, and it makes it tough to recover over the next few weeks to get to even 5000 sales, a number that is far below what the last several have been. Granted, people had a lot of other things on their mind this past week, but the numbers should really have been better than this.
I don't even want to get into the Active listings...they have been climbing, despite our increasing sales, and I don't think there is any denying that fact. While our new construction inventory has now fallen below its historical high water mark, resales are still clogging up the system, and until that number starts to fall we will not reach a pricing bottom. We have reached a sales bottom, I think, a year ago almost, but pricing pressure is still downward, as we can't seem to get past this inventory point.
Wednesday, October 8, 2008
Real Estate News Headlines
There are a couple of important headlines I thought relevant here.
Pending Homes Sales reached a yearly high in August......
-nothing we didn't know locally, but this bears out the stronger sales in September, at least. It also talks a bit about mortgage rates coming down as a result of the rush to US Treasuries. Its a simple breakdown, but actually helpful in explaining the situation. This is the article from CNBC
Mortgage applications rise....
-I don't know if these applications are getting approved, but it does show a certain segment of the population is interested in buying a home. This is a good indicator that we at least have a floor in the housing market. The prices have come down enough to bring people in to start the process, despite the horriffic news and daunting task of obtaining financing.
Feds Cut Rates 1/2 point
-This seems to have stabilized the market a bit for today, but it is not nearly as much as the street was clamoring for. It might be that it was enough though. I am not sure if continually cutting rates is the right way forward either. This one was necessary.
Pending Homes Sales reached a yearly high in August......
-nothing we didn't know locally, but this bears out the stronger sales in September, at least. It also talks a bit about mortgage rates coming down as a result of the rush to US Treasuries. Its a simple breakdown, but actually helpful in explaining the situation. This is the article from CNBC
Mortgage applications rise....
-I don't know if these applications are getting approved, but it does show a certain segment of the population is interested in buying a home. This is a good indicator that we at least have a floor in the housing market. The prices have come down enough to bring people in to start the process, despite the horriffic news and daunting task of obtaining financing.
Feds Cut Rates 1/2 point
-This seems to have stabilized the market a bit for today, but it is not nearly as much as the street was clamoring for. It might be that it was enough though. I am not sure if continually cutting rates is the right way forward either. This one was necessary.
Tuesday, October 7, 2008
MLS STATS 9/29 to 10/5/08
PENDINGS DOWN, ACTIVES UP
Pending: 6,460 ( -555 from last week)
Active with Contingency: 1,006 ( -35 from last week)
Closed Escrows: 1,791 ( +234 from last week)
Active Listings: 52,870 ( +127 from last week)
Closed MTD (10.5.08): 615
SINGLE FAMILY STATS
PENDING: 5,844 ( -430 from last week)
AWC: 932 (N/A)
CLOSED ESCROWS: 1,620 ( +192 from last week)
ACTIVE LISTINGS: 43,441 ( +186 from last week)
MTD CLOSINGS: 553
The beginning of the month was a short week, so not very much to glean from the activity either way. The closings include the end of the month, so they are artificially high. The disturbing trend to me is that despite the large amount of sales, the number of listings actually went up at the end of the month. Too many homes still on the market, and going on the market, and that is something that will put off a housing recovery. If we have blockbuster sales of 8,000 a month through the fall, which I don't see happening, 40K single family homes on the market would be okay. But there is nothing pointing in that direction, as I am sure most of you know.
September was a very good month, but we have now gotten into the heart of this credit crisis, and it is very difficult to say where things go from here. I will be watching the pendings next week, and seeing if that number rebounds, as well as the active with contingency. AWC's are already at their normal level, but if they increase a bit, that will be a good sign that there are still people out hunting for homes, despite the negative news. All I can say is that I hope that trend will continue.
Pending: 6,460 ( -555 from last week)
Active with Contingency: 1,006 ( -35 from last week)
Closed Escrows: 1,791 ( +234 from last week)
Active Listings: 52,870 ( +127 from last week)
Closed MTD (10.5.08): 615
SINGLE FAMILY STATS
PENDING: 5,844 ( -430 from last week)
AWC: 932 (N/A)
CLOSED ESCROWS: 1,620 ( +192 from last week)
ACTIVE LISTINGS: 43,441 ( +186 from last week)
MTD CLOSINGS: 553
The beginning of the month was a short week, so not very much to glean from the activity either way. The closings include the end of the month, so they are artificially high. The disturbing trend to me is that despite the large amount of sales, the number of listings actually went up at the end of the month. Too many homes still on the market, and going on the market, and that is something that will put off a housing recovery. If we have blockbuster sales of 8,000 a month through the fall, which I don't see happening, 40K single family homes on the market would be okay. But there is nothing pointing in that direction, as I am sure most of you know.
September was a very good month, but we have now gotten into the heart of this credit crisis, and it is very difficult to say where things go from here. I will be watching the pendings next week, and seeing if that number rebounds, as well as the active with contingency. AWC's are already at their normal level, but if they increase a bit, that will be a good sign that there are still people out hunting for homes, despite the negative news. All I can say is that I hope that trend will continue.
Thursday, October 2, 2008
September Resales Hit 2008 High
MLS Records 6,130 Sales in September!
Single Family Sales Totaled 5,559 of these sales
Single Family Inventory at lowest point this year-7.7 Month Supply
Builder Report shows inventory levels of spec homes have fallen to an important milestone.
September sales finished with a flourish, striking 6000 sales for only the second time this year. September beat July '08's tally of 6,033. September '08 bested September '07 6130 to 3377-almost doubling it!
Single family sales did double from last September in MLS- from 2,735 to 5,599 for this year.
Gross inventory numbers are not falling as much as sales are increasing, so that is a little disheartening, but we still have reached a low in inventory ratio. The single family ratio is actually a better number to watch, as the gross inventory, as I have mentioned before, includes condos, mobile homes, and even timeshares, including out of state timeshares, on occasion. The building industry is driven by single family homes, so in regards to the inventory levels, a 7.7 month supply is getting us a lot closer to where we need to be. We are getting close enough to market stabilization that you might see prices also stabilizing a bit. I recently saw a statistic that used 5 months supply as a pretty normal market, and we are getting a lot closer to that.
Overall, a very encouraging month of September. If we could have clipped a 1000 homes off the inventory number I would have been a lot happier, but the sales numbers tell the story-there is demand out there.
chris
Single Family Sales Totaled 5,559 of these sales
Single Family Inventory at lowest point this year-7.7 Month Supply
Builder Report shows inventory levels of spec homes have fallen to an important milestone.
September sales finished with a flourish, striking 6000 sales for only the second time this year. September beat July '08's tally of 6,033. September '08 bested September '07 6130 to 3377-almost doubling it!
Single family sales did double from last September in MLS- from 2,735 to 5,599 for this year.
Gross inventory numbers are not falling as much as sales are increasing, so that is a little disheartening, but we still have reached a low in inventory ratio. The single family ratio is actually a better number to watch, as the gross inventory, as I have mentioned before, includes condos, mobile homes, and even timeshares, including out of state timeshares, on occasion. The building industry is driven by single family homes, so in regards to the inventory levels, a 7.7 month supply is getting us a lot closer to where we need to be. We are getting close enough to market stabilization that you might see prices also stabilizing a bit. I recently saw a statistic that used 5 months supply as a pretty normal market, and we are getting a lot closer to that.
Overall, a very encouraging month of September. If we could have clipped a 1000 homes off the inventory number I would have been a lot happier, but the sales numbers tell the story-there is demand out there.
chris
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