MLS Stats 12/1-12/7/08

INVENTORY RISES; PENDINGS FLAT
November closings revised upward to 4449 from 4300

PENDINGS: 6207 ( +32 from last week)

AWC: 973 ( +17 from last week)

CLOSED: 12/1-12/7 966 ( -265 from last week)

ACTIVE: 54,844 ( +311 from last week)

CLOSED MTD (12/7/08) 966


SINGLE FAMILY

PENDING: 5,627 (+29 from last week)

AWC: 886 ( +9 from last week)

CLOSED 12/1/-12/7 860 ( -269 from last week)

ACTIVE: 45,077 ( +260 from last week)

CLOSED MTD: 860


December is starting off just about how expected-the activity over the next two months is likely to be soft. The interest rate reduction will likely bring some more people into the market, but this will be offset by the seasonal slowdown. Factors would predict that even though there is normally a drop off in listings this time of year, it will not happens as many of the listings going on the market are bank-driven, and thus may not be affected by the holiday season. Now there was some national action by banks to not start proceedings during the next few months, but I don't know that it will have a large effect on how many listings go up. Some of those listings will have been in the pipeline for months. Our biggest problem is still inventory, and we are going to suffer through that for a while. The thing about a lot of this inventory is, many homebuyers are not interested in buying a foreclosure that amounts to a fix up property, regardless the price; they are looking for a home, not a project. These properties can almost be put in a submarket, and cannot be fully classified as inventory. They are investor inventory, as many of homebuyers will not even look at them in their current condition. I am not trying to put a sunny face on the inventory numbers, but there is a dichotomy in the prices and inventory of ready to live homes and these bank-controlled properties. They have a reduced value for a reason, and their effect on pricing is staggering to the public perception of the housing market.

An article today in the republic reporting a strong dip in foreclosures in the valley may be a signal that the market is righting itself finally. I wouldn't go so far as saying that, but if lenders are working with even some owners to stay in their homes, that is that much less inventory on a bloated market. It may also cause some listings to be taken off the market, as people realize that they won't need to sell their home. The bottom line is that its good news, as couched in government intervention as it may be.

I don't expect 5000 sales in December; the first week was not great, and the end of the month bracketed by two holidays, is not going to be strong finisher. If we do significantly better than November's 4449 (revised from 4300), it will be a good showing. If listings can fall somewhere around 54000 by the end of the month, we can at least start the new year with some momentum. As I said, the bank-controlled listings may prevent a decline that would normally be a no-brainer, but we could get lucky with the fannie and freddie imposed moratorium on new foreclosures.

Expect about 4500-4700 closings in December.