ARMLS STATS 12/29/09

***Closed Escrows Reach 90K+ for '09***

Active listings up slightly over the last several weeks.

Pending: 10,453 Previous Week (*NA)
Pending Sfam: 9,116 Previous Week (*NA)

AWC: 6,038 (Not Available)

AWC SFAM: 5,248 N/A)

Closed 12/21-12/27/09: 1,208 (Last Week: 1,815)

Closed Single Fam: 1,043 (Last Week: 1,519)

Active Listings: 34,174

Active Sfam: 26,593

Closed thru 12/27: 5,646

Closed Sfam: 4,880

I apologize for not posting the last few weeks, as I have been extremely busy, and with December being a relatively nondescript month in home sales, there was not much interesting going to happen anyway. Here is what we have. As expected, pendings tend to slide a bit during the holidays, and this year is no different. We won't see that activity pick up again until February, most likely. We will see inventory picking up until that time as well, as many people put their homes on the market after the first of the year. Sales for December are going to be less than previous months, but this is expected for December. It is still not a bad month, with sales likely topping 7000, although the last week is hard to predict here. We are at over 6000 including yesterday, so we might see a little flourish that puts us over 7000. Last December sales totaled 5451 for the whole month, and was about 4300 through the 27th, so we can expect another 1000-1200 sales from our current position, I think. We have reached 90,000 sales, which is a pretty good year for sales. Inventory is still too high, but we might see that being reduced substantially by May once the spring buying season heats up. It is not likely to be as dramatic as last year, but it still looks likely. Prices are likely to flatten a little bit locally, as buying pressure decreases in the winter, but will pick up again in March and April.

Pricing will be a key issue this upcoming year. I do think we will be flat if not down over the next few months. When we start seeing a push in buyer activity beginning in late February, we will see upward price pressure again.

This chart is courtesy of MLS, and it shows some of the trends for the past year. We have improved our situation pretty dramatically since January of last year. Prices have stabilized, and while they may bump along for a few months, we still will see an increase by this time next year- probably a fairly substantial one.

I wish you all a very happy new year, and hope that we will have a lot of good things to discuss about our industry going forward!

chris

Active Listings Up
Only 1/3 of new listings this week are lender-owned.
Another 500+ are short-sale listings.
3,065 of November Sales were Bank-Owned.

Pending: 10,905 ( +84 from last week)
Pending Sfam: 9,535 ( +67 from last week)

AWC: 6,244 (+112 from last week)
AWC SF: 5,472 ( +99 from last week)

Closed 11/30-12/6 2,204 ( +614 from last week)
Closed Sfam: 1,902 ( +510 from last week)

Active Listings: 33,903 ( +428 from last week)
Active Sfam: 26,346 ( +362 from last week)


Here is a little data to place in historical perspective that you might find interesting.

Year to Date Sales: 84,848 (Through 11/30/09)
2003: 79,512
2004: 98,294
2005: 104,133
2006: 74,106
2007: 54,231
2008: 59,225
2009: Likely to top 90,000 sales.

New listings for the week were 2,488. About 800 were bank listings, far less than what I expected. I just envisioned that as being higher.

I am swamped today, so no analysis. I did pull the number of bank-owned sales in November, and I was surprised that the number wasn't higher. I was also surprised to see that bank-owned didn't make up a larger portion of the new listings from the last week. I checked last year's inventory levels for this week, and they all climbed in the first week of December, before starting to fall off a bit. If the number of new listing was massively lender-related, I would be more concerned that the number wouldn't be falling over the course of December. It still might not, but its playing pretty close to the seasonal factors right now.

Have a great week.

ARMLS STATISTICS FOR 11/23-11/29/09

Preliminary Sales Reach 7599 for November
Actives down, Pendings off sharply.
AWC also down; are short sales finally closing?

PENDING: 10,821 ( -1024 from last week)
Pending Sfam: 9,468 (-912 from last week)

AWC: 6,132 ( -252 from last week)
AWC Single Fam: 5,373 ( -230 from last week)

Closed: 1,592 (-286 from last week)
Closed Sfam: 1,392 (-230 from last week)

Active Listings: 33,475 ( -156 from last week)
Active Sfam: 25,984 ( -112 from last week)

CLOSED Nov. 7,599
Closed Sfam: 6,584

I am under the weather today, so I am not to going to do much with this. The closings show that we are going to come up short of the 8000 we projected for November. The current number is going to rise, as realtors will be adding more in from yesterday's closings, but it won't be enough to reach 8000. Its an okay month, but not an outstanding one.

Inventory fell a little in the past week, as did AWC contracts. I am not sure if that means more short sales closed, or that new contracts have slowed. It is likley the second one, as we are going into a dormancy period for a few months, and new activity can be expected to slacken.

I will update a more complete final closing tally later this week; it certainly will surpass 7600.

armls stats 11/16-11/22/09

Pendings Fall, Sales Rise
Active Rise slightly, AWC start to fall.
Holiday Season variables start to show up.

PENDING: 11,845 ( -277 from last week)
Pending SFam: 10,380 ( -250 from last week)

AWC : 6,384 ( -68 from last week)
AWC Sfam: 5,603 ( -87 from last week)

Closed: 1,878 (+366 from last week)
Closed Sfam: 1,622 (+329 from last week)

Active: 33,631 ( +163 from last week)
Active Sfam: 26,096 ( +134 from last week)

Closed MTD: 4,842
Closed Sfam: 4,180


I am not going to delve too deep into the numbers today; things are clicking along normally for the season. Sales are fairly strong, having risen again, boding well for the end of the month sales to come close to matching a very good October. We are actually ahead of October's pace 4727- 4842 at the same date in the month. I think it will even out though, as we lose two days here this week, and one at the end of the month. We are seeing the decline of pendings, as many buyers aren't as interested in timing up closings for the Holiday season. We are likely to see a light number of pendings until they start to rise in February again. Still, November looks excellent, and we are going to have a strong 2009 in terms of sales. In terms of pricing, well, not so much- but we are seeing consistent improvement, and steadying demand. Hopefully, the strong progress of first time homebuyers, coupled with the tax incentive for move-up buyers, starts to have an effect in slightly higher-priced homes.

I would also mention that nationally we have seen some steadying of home prices per this article at CNBC. Home prices rising this many months in a row means something. We are not in a strong position yet, but we are improving, and that is excellent news.

Have a very happy Thanksgiving Holiday!

ARMLS STATS 11/9-11/15/09

Inventory Rising As Expected
November Closings on excellent pace.
Pendings starting to falter as holiday season hits...

PENDING: 12,122 ( -124 from last week)
Pending Sfam: 10,630 ( -113 from last week)

AWC: 6,452 ( +17 from last week)
AWC Sfam: 5,690 ( +11 from last week)

CLOSED: 1,512 ( +204 from last week)
Closed Sfam: 1,293 ( +155 from last week)

ACTIVE: 33,468 ( +275 from last week)
Active Sfam: 25,962 ( +266 from last week)

Closed MTD: 2,927
Closed Sfam MTD: 2,525

The numbers are what we would expect, but the rising number of listings show that the banks are still pushing inventory out. We saw a similar increase in listings at this time last year, but we did see several large weekly spikes in inventory last year in the same weekly periods, followed by a fall, so this is not all that unexpected, even with bank listings probably on the increase. I don't have the time to dig deeply into that today, but these are manageable figures, even if we don't like to see them. It will be common for several months for inventory levels to rise, and I am guessing that prices might level temporarily until the late winter/early spring sales season. For comparison sake look back at the 2008 archives through the link on the left of the page. You can see what the inventory build numbers were last year at this time.

Encouraging is the start of the month we have in sales. Last year at this time there were only 1,745 sales. This is a good increase for a normally very slow month. The stimulus has something to do with that, but at the same time,we are in a better environment in any number of ways to last November. Its a number about on par with October 09, which by all accounts was an excellent month for sales. I do think we will see a typically dreadful December, but that is not unexpected and nothing to get worried about. January will be similar, but by February, we will start building up sales again.

There wasn't any real great news articles this week, but there was one bit of news that I think we can glean something from. The foreclosure rates for October fell sharply from last year in Arizona, and fell from September. This will be an interesting trend for us to watch, as we can gauge how far we are through this thing based on foreclosures. If they start to dissipate, we will see prices bouncing back more quickly. A lot of that depends on external forces, like the economy and subsequent consumer sentiment.

We are going to be going into a holiding pattern that will last until after the holidays, and probably into February. It will be pretty difficult to discern which direction we are going, but as long as inventory doesn't get too out of hand during this slow period, I think we can expect a fairly strong rebound in the second quarter, and given demand levels last year, we may see the demand start bleeding into new housing, causing a small surge in new home sales as well, as many builders are very competitive on their home pricing now. That is just something to look for in Second Quarter of 2010.

ARMLS STATISTICS FOR 11/2-12/8-09

INVENTORY RISING AS EXPECTED
Pendings Rebound, AWC flat
Sales start well in November.
Real estate in the news:

PENDING: 12,246 ( +225 from last week)
Pending Sfam: 10,743 (+173 from last week)

AWC: 6,435 ( +17 from last week)
AWC Sfam: 5,679 ( +9 from last week)

Closed: 11/2-11/8 1,308 ( -1,532 from last week)
Closes Sfam: 1,138 ( -1,321 from last week)

Active: 33,193 (+704 from last week)
Active Sfam: 25,696 (+618 from last week)

Active listings continue to rise due to seasonal slowdowns in buying activity, but more so due to increased lender inventory. We normally would see inventory start to fall off as we reach the holidays, but I don't think we will see that this year. We are likely to see a bit of an inverted "V" in inventory for the next six months, as inventory will likely rise for several months until we get to the spring selling season, which will start somewhere in February. All bets are off on timing of things, as the recently passed home buyer tax credit may spur stronger activity starting now or even after the first of of the year.

I do expect somewhat of a rise in inventory levels, but we are also likely to see stronger sales than normal during the same period, certainly better than the sales in the same months last year. Last year, the reporting period for this week was 11/3-11/9, and we had 778 closed escrows. We are almost double that this year. we have double the pending sales, six times as many active with contingency, and 21,000 less active listings. No doubt we are in better shape, but the inverted V inventory number is going to be a reality. I do expect prices to flatten over the next several months, until spring. Even with the homebuyer tax credit, we would have to see a massive surge in demand across the price spectrum to really counter-act inventory level gains during what is traditionally a seasonal slowdown. Normally, this period is accompanied by inventory reductions, but I think banks are not bound by these rules, and are placing new inventory on the market. Do expect a good sales month in November, but it is not going to be enough to ward off an inventory increase completely. I think it may be a month in which price gains may stall out- temporarily.

Obviously, the big news this past week was the homebuyer tax credit extension and expansion. This makes move-up buyers eligible for $6500 in tax credits too, but with certain stipulations. This should encourage some sales at slightly higher prices. This is an area that needed help, as low prices homes have dominated. This credit is a huge boost to our industry and combine it with continuing low interest rates, and we have the opportunity to pull ourselves out of the almost 4 year slump we have been in. (The land slowdown happened before home realtors felt it)

There was also this story about the luxury market, which has been suffering, as the higher-end buyer had also lost confidence in the idea of owning a home. There is some evidence that sales are starting to happen in this category, as confidence in general is improving. These sales are happening in part to some very attractive pricing for luxury homes, but these buyers were no where to be found over the last few years.

This was another story relating to pending sales that I think is worth reading, but I don't think it is necessarily on point with current conditions. Our pendings are doing pretty well, but we do have inventory rising to a degree as well. What I would take from it is that there is continuing strength in the demand numbers, but we are not really leaving inventory issues behind. The foreclosure and short sale market are too big a part of our market, and we can't truly recover until that inventory dissipates.

If you want to find bad news in the market, it is always possible to do so. This article from CNBC is typical of something they run, which shows you can create a headline to say whatever you want. We of course know that sales prices took a massive hit in the last year; prices from this time last year have fallen precipitously. Yet the headline of this story makes it sound like this is new and current info. Yes, year over year we are still struggling. This article should be accompanied by a quarter to quarter comparison. I think CNBC's purpose is to create news that contradicts, thereby causing investor discomfort, so they will continue to buy and sell from day to day depending on good or bad news. CNBC is the investment broker industry's best friend. We could easily go back in the last week and find an article that says that prices have risen- same generic headline, completely contradictory, but using a quarter to quarter analysis.

We are entering our winter doldrums now, and even though the homebuyer tax credit will be a tremendous support for the industry, I don't expect that we will be working inventory numbers down until at least March, except for maybe a period of time in December when most of the new marketing activity does stop. The key is whether inventory levels remain low enough for the sales growth season to quickly dissipate the extra fat that comes on the market over the winter. Price growth is not likely to happen with inventory levels rising.

11/3/09 ARMLS DATA

**October Sales: 8,146-All-Time Record?**
Inventory Rising: Actives up again
Short Sales Starting to move?
In the News:

PENDING: 12,021 ( -1178 from last week)
Pending SFam: 10,570 ( -1013 from last week)

AWC: 6,418 ( -120 from last week)
AWC SFam: 5,670 ( -105 from last week)

CLOSED: 2,840 ( +1216 from last week)
Closed Sfam: 2,459 ( +1033 from last week)

Active: 32,489 ( +277 from last week)
Active Sfam: 25,078 (+218 from last week)

CLOSED OCTOBER: 8,146
Closed Single Family: 7,061

Sales finished very strong in October, posting 2800+ sales in the final week, to boost us comfortably past 8000 sales. For comparison, there 5,335 sales in October 2008. For comparison sake, October 2005, there were 7,973 sales. Of course, the dollar volumes were much higher in 2005, so lets not get ahead of ourselves, but the sales activity is very good. October 2004 was a very good month, and was at the forefront of the boom. It saw a total of 8,128- which means that 2009 is likely the best October in ARMLS history in terms of sales numbers. A dubious record, one might say, due to the decreased dollar volumes, but the positive I take from it is that there is a high amount of interest in purchasing a home again, which is good for our industry.

The flip side of this equation is that we are seeing the banks putting inventory out there at full force. We are seeing an uptick in residential listings, which is fairly normal for this time of year. It normally would start to fall around Thanksgiving, as people put off listings homes until January, but with the bank sales being such a large component of listings, we might see a steady progression through the winter months, until sales start to pick up again in February. There could be a lot of things different this year. Inventory is going to be a key factor to watch, as the increase in pricing we are seeing may be encouraging lenders to try to turn around properties faster.

Now, that being said, we are seeing just a modest leveling off of AWC contracts, the bulk of which are made up of short sales. In fact, 5,760 of the AWC listings are short sales. This number needs to start falling for a few reasons: 1. To unclog the short sale system so people don't become frutstrated by the idea of buying one, and 2. these are pending sales locked into a holding pattern, therefore holding back what should really be some better sales numbers every month. AWC has gone from being a number forecasting future pending contracts, to a dirty word implying contracts that are tied up for months on end. Banks need to realize they are not helping themselves by holding these sales up- they are going to happen anyway, and they might as well approve them and get down the road.

There was some other positive news this week. Gilbert is being singled out for really eye-raising new construction numbers. In an article in the AZ Republic, it is being described as a "mini-boom". Permits are outstripping any other community in the valley. I would not characterized it as a boom, but as one of the most attractive newer areas of the valley, it is understandable why we would see Gilbert activity at the forefront of a new round of new construction. Some builders are even referring to a land rush there- hard to believe that kind of vocabulary even exists here, but hopefully it continues.

I don't always agree with her, but Diana Olick of CNBC wrote a very prescient article about where the homebuying assistance should be focusing on, and she is right. First time homebuyers are critical, and perhaps make up a large part of the market, but move-up buyers are the bottleneck, and while the expansion of the credit will help them to a degree, it would have been a good idea to give them at least the same tax credit that lower-priced homebuyers are receiving. There can be no price appreciation without these buyers confidently looking at getting into better neighborhoods, making their lower priced homes available to first time buyers. Still, the extension will help us through the winter months, and allow many buyers an opportunity they might otherwise sidestep.

Pending home sales were up nationally for eight consecutive months, signalling that maybe we are reaching a point of recovery. There are a lot of obstacles, least of which is inventory, but there are getting to be more positive signals than not, so it seems we are headed in the right direction.

ARMLS STATS FOR GREATER PHOENIX 10/27/09

Actives Rise Again....Pendings Too.
AWC Fall....
Sales for month likely to top 8000....

Pending: 13,199 (+99 from last week)
Pending SFAM: 11,583 ( +88 from last week)

AWC: 6,538 ( -88 from last week)
AWC SFam: 5,775 ( -96 from last week)

CLOSED 10.25 1,624 ( -12 from last week)
Closed SF: 1,426 ( -2 from last week)

Active: 32,212 ( +325 from last week)
Active Sfam: 24,860 ( +318 from last week)

CLOSED MTD: 5,311
Closed Sfam: 4,615

I don't have time for much analysis today, but two key things are showing up. One is that active listings continue to rise; Troy Wahlberg, of AZValley Real Estate, wrote in that since anti-deficiency legislation was repealed, banks have increased the number of homes that they are foreclosing as they are not hedging that they might be able to go after owners for deficiencies any longer. He has seen the trustee sales return to their previous level, which would account for the slight uptick in listings we are seeing hit the market. It is not a wave, certainly, but we are likely to see an increase in inventory as we go through the winter months, when sales typically slow down. Listings also typically slow down, but much of our new inventory is lender-owned so the seasonal aspect may not matter much to them.

The second issue is that we are on track for a decent sales month, and I will say that we will pass 8000 sales overall. Its not a given, but the last week should be fairly decent, and all things being equal, we should get there. Its not a blowout month, but we are definitely far ahead of 2008's pace.

We would like to see inventory falling, but we are not at the peak sales months, and we are also seeing some evidence of new home sales likely competing for buyers. I have been seeing new homes going up in many of the outlying communities like Buckeye and Coolidge. Builders are offering some tremendous value for new homes, and the new home reports are showing some consistently better numbers than last year. In all likelihood, those are not spec homes- builders, even the big ones, are not going to go and put up 20+ spec homes at a clip on the same block- they either already have buyers for those homes, or they have some reasonable data that tells them they are selling fast enough to warrant their construction. Our resale prices have been going up, but I think we are going to see where they encounter some resistance as builders bring their pricing power to bear and offer up bargains that many buyers, especially first-time buyers, can't ignore.

ARMLS STATS 10/12-18/09

Pendings Top 13K, Actives up slightly.
AWC still higher as short sales climb.
October should top September's Sales

PENDING SALES: 13,100 ( +134 from last week)
Pending Sfam: 11,495 ( +140 from last week)

AWC: 6,626 ( +14 from last week)
AWC SFam: 5,871 ( +11 from last week)

Closed (10/18): 1,636 ( +309 from last week)
Closed Sfam: 1,428 ( +279 from last week)

Active: 31,887 ( +147 from last week)
Active Sfam: 24,542 ( +70 from last week)

Closed MTD (10/18): 3,636
Closed MTD Sfam: 3,154

The number of active listings rose slightly, as we have reached that time in the early fall before the holiday season that home listings tend to increase, and sales start to slow down. It was not a sharp increase, but it did go up statistically. I will discuss more about this next week. We are not being buried by new foreclosure listings, so I will leave it there for now.

Interestingly, pendings continue to rise, now topping 13,000 again. Solid pending numbers usually lead to solid sales numbers, so we can anticipate that October will be okay. We are running slightly ahead of September's pace, but not significantly so. Enough to put us over the 8000 mark, which will not be bad for October. Still, it is likely that activity will decrease somewhat as we head into the dormant season. I expect active listings to rise a bit during the fall, as there are foreclosures out there, and they will be put on the market by the banks.

We are of course still buried in short sale contracts. They are taking far too long to close, and that is affecting what should look like an even stronger recovery in home resales.

There has been in some interesting development in other areas that I will have to address another time; I don't have the time today to do so. One of those articles is that London, England, who had virtually the same problem we had with their housing market before we did, is now suffering a housing shortage. Bloomberg has the article here. Their market is not our market, but it does show how quickly these things can change. They were considered to be in a massive housing freefall, and now it appears they are coming out of it.

There are a couple of other articles posted by Diana Glick of CNBC that shows the dichotomy of the real estate market. There are massive foreclosures, but getting a house you want is competitive. Its not the way we want the market to be working, but there is a reason for buying in places like Arizona and Nevada: the future population is moving here. Boomers are just starting to make moves, and places like Anthem in Pinal County, and Vegas, and Northwest Arizona across the bridge from Nevada will be growth areas. Count on it.

Lastly, indicators are that October should be a decent month-we can expect it to be better than September, although probably not by a lot. It might be a lot better; its difficult to read that right now. We are only slightly better paced than September, but we do have good pending numbers, so I am not sure. We are in all likelihood going to top 8000 sales in October, so that is pretty positive.

ARMLS STATS FOR GREATER PHOENIX 10/13/09

Active Listings Rise
Pendings up Sharply, Too
AWC reaches new heights, short sale contracts likely cause.

PENDING: 12,966 ( +406 from last week)
Pending SFam: 11,355 ( +305 from last week)

AWC: 6,612 ( +79 from last week)
AWC SFam: 5,860 ( +75 from last week)

Closed 10/5-10/11 1,327 ( -807 from last week)
Closed SFam: 1,149 ( -721 from last week)

Active: 31,740 ( +420 from last week)
Active SFam: 24,472 ( +359 from last week)

CLOSED MTD 10/11/09: 1,977
Closed SFam: 1,713

The number of active listings rose sharply in the last week, as more homes are put on the market as historical data shows in the fall. The number of pendings rebounded sharply as well, forecasting probably a good but not great October, but also a better than normal November.

The closings for the first full week of October are a decent number at 1300+, so we can anticipate sales reaching similar levels as September, but maybe just a tad better. We are going into what is a traditionally slower period of buyer activity, and a somewhat higher level of Seller activity, so we will likely see a short-lived spike in listings through October, before the normal fall-off in November and December.

I have a full day planned here, so I don't have any time for analysis, but hopefully I can comment more on the source of the rise in inventory after I do some research. It was a fairly sharp uptick, so one wonders if a particular bank released a bunch of their listings on to the market. I will dig a little deeper and see if I can come up with that info.

MLS STATS 10/06/09

September surprise-Almost 8000 closings!
AWC falls, are short sales starting to move?
Fall in pendings, actives slightly higher.
Home prices: Up or Down in September?

PENDING: 12,560 ( -588 from last week)
Pending SFam: 11,050 ( -546 from last week)

AWC: 6,533 ( -56 from last week)
AWC SFam: 5,785 ( -62 from last week)

Active: 31,320 ( +103 from last week)
Active Sfam: 24,113 ( +82 from last week)

Closed 9/29-10/4: 2,134 ( +20 from last week)
Closed SFamily: 1,870 ( +15 from last week)

Closed September: 7,946 (September '08: 6,067)
Closed Sfam: 6,961

September finished fairly strong, almost reaching 8000 sales which I didn't expect. The number of sales shows there is still some life in the market before the dormancy that usually hits us in October and November and lasts until March. Pendings took a little dip, which is fairly normal, as quite a few closings at the end of the month will disappear. They normally rebuild over the next several weeks.

I thought it was interesting to see AWC fall; this number has climbed pretty well forward for the the last year, mostly due to long-lived short sales residing there. Its possible that they are starting to move a bit, or that short sales in the system might have crested and could now start disappearing a little. Its not the ideal time of year, as there is not a lot of sale momentum going into November, but the pendings are still relatively high, and November is likely to show up okay. There have been some historically low interest rates, and there is still some buyer activity out there.

The best stat is that sales ended up stronger than expected; as I really didn't have a lot of faith we would cross 7500, and we fell just short of 8000. That is a very good month, by any measure of the circumstances we are in.

It is also necessary to place this in the context that the new home sales index has been stronger for much of the year than in either 2007 or 2008, and has been making even bigger gains the last several weeks as well, hitting a peak last week not seen since 2006. This is not to say that there are tremendous raw numbers of sales, but the index uses sales to subdivision ratio, and that ratio is tremendously better than last year or 2007. The most telling way to look at this is: in 2008 for the same week, the traffic to sale ratio was 21:1. That means for every 21 people who looked, one person bought. The 2009 ratio for the same period is 10:1! That is showing marked improvement, and is one of the reasons that there are getting to be more cautiously optimistic builders. It is not a bull market for them, by any means, but they can at least see that things are moving in the direction that they can start thinking about putting up homes again to meet demand.

Now, the best for last. The most fascinating statistic that I found for September sales was that the median sale price for sold listings jumped from $126,000 in August, to $130,000 in September. That is about a 3.2 % increase in price. That is a great sign. The dollar volume of sold listings also increased over August, and has bested the 2008 monthly dollar volume for the last four months, and 5 out of 6. This is also a positive sign. These are leading indicators about trends, and as we saw from 2006-2008, the trends don't change very quickly, they tend to follow a course. We are on a course for a better real estate market in six months than we have today, and I think we can take some comfort in that.

The number of new listings has also continued to decline over the summer. March is the highest number of new listings, but June was the highest this summer. We have fallen since then. It is still a relatively high number compared to sales, but apparently, we have reached something of an equilibrium in inventory. It might rise a little, but the number of new actives tends to fall pretty sharply in November-December. There are variables of course, such as lender listings, but they have been claiming that since March, and it has yet to happen. In fact, it looks like March was the peak month for listings this year, and we weathered that. We would have to see a catastrophic amount of listings in October, with a drastic reduction in sales, to really erode our position of a real estate recovery at this point.

WEEKLY ARMLS STATS Metro Phoenix

ARMLS STATS 9/29/09


Pending: 13,148 (-43 from last week)
Pending SF: 11,596 (-80 from last week)

AWC: 6,589 ( +52 from last week)
AWC SFam: 5,847 ( +73 from last week)

Closed: 2,114 ( +362 from last week)
Closed Sfam: 1,855 ( +315 from last week)

Active: 31,217 ( -36 from last week)
Active Sfam: 24,031 ( +21 from last week)

Closed MTD Through 9/27/09: 6,002
Closed MTD Sfam: 5,271

I have zero time to do any analysis this week, but we are on track for a weaker month of September. If we reach 7600 sales we will be doing very well, but I expect it to settle less than that.

MLS STATS 9/14/09-9/20/09

Inventory Flat, AWC Stuffed with Short Sales

Weekly Sales Up, But September will Disappoint

Pendings Rising Close to June Levels; Big October Coming?

PENDING: 13,191 ( +269 from last week)

PENDING SF: 11,676 ( +209 from last week)

AWC: 6,537 ( +16 from last week)

AWC Single Fam: 5,774 ( +36 from last week)

Closed: 1,752 ( +454 from last week)
Closed SFam: 1,540 ( +393 from last week)

Active: 31,253 ( +27 from last week)
Active SFam: 24,010 ( -1 from last week)

CLOSED MTD: 4,192
Closed SFam: 3,678

September sales are likely to finish a little bit light, as the first two weeks closed was disappointing. This past week was better, and pending sales are pointing to what looks like a stronger October. September could finish exceptionally strong, but this week would have to be gangbusters, and the short week next week would have to follow suit. I am not anticipating 8000 sales this month, but we could be surprised. What's interesting is that pending sales are rising at a pretty good clip. In fact, they are practically at the same level as June, which preceded pretty good numbers for July. The end of May pending numbers were higher by a few hundred, so we are not likely to see June-type sales numbers, but this forecasts pretty strong sales. We will keep an eye on it, but the next few months may blunt the expected inventory rise that comes with 4th quarter reduction in sales.

September sales are not going to be great; the first two weeks started very poorly, and this past week was okay, but not strong enough to make up for the first few weeks. I don't expect that we will sell 2500 for each of the next few weeks, so I am expecting somewhere in the high 7000's for overall sales. A bit disappointing, but the recovery was going to go in fits and starts, and September looks like it will be one of those mileposts. October could be a much stronger month than expected, given pending sales, so September might just be a blip.

We are solidly in recovery, and I am seeing fairly widespread anecdotal evidence that the best priced housing product is disappearing at a pretty rapid clip. This doesn't mean that "market priced" homes are going quickly- buyers are still finding an abundance of lender owned properties at lower prices- but we are getting closer.

We continue to have low interest rates, making sales possible, and there is some talk about extending the $8000 tax credit, and possibly expanding it too all homebuyers, in order to stimulate the housing recovery. This is likely, given the "cash for clunkers" program's success. It is one of the few forms of the stimulus that actually puts money directly into the hands of consumer. We could see a pretty good uptick in sales were they to give the consumer a kick like that.

-chris

MLS STATS 9/7/09-9/13/09

Inventory Rises Slightly Again
Pendings, AWC both Climb
Inventory likely is rise slightly through the fall.


PENDING: 12,922 ( +327 from last week)
Pending SF: 11,467 ( +265 from last week)

AWC: 6,521 ( +158 from last week)
AWC SF: 5,774 ( +133 from last week)

CLOSED: 1,298 ( -649 from last week)
Closed SF: 1,147 ( -570 from last week)

ACTIVE: 31,226 ( +116 from last week)
Active SF: 24,011 ( +135 from last week)

CLOSED MTD: 2,393
Closed SF MTD: 2,102


Inventory rose just a bit for the second time in September, signifying an increasing number of new listings. Single family listings rose more than overall listings, suggesting that condo sales are perhaps starting to show some strength. A look inside the numbers shows that new listings increase in September and October. This is likely the case again, as it is a seasonal issue. Of the 2,290 new listings in the last week, 654 were lender owned, which was an increase of 222. There were 570 more listings put on the market this week than last, so that is going to have an effect. August was a much slower month for lender-owned properties going on the market, as it appears that lenders were perhaps holding back foreclosures waiting for the new law regarding deficiencies that they tried to sneak through the legislature. This failed, so we may see an increasing number of lender listings come on the market. Comparatively, there were about 1000 more listings put on the market this week in September than there were in the similar week of August '09. Of these,
665 were not lender-owned or short sale. A very large share of our inventory is still bank-owned and short sale, which contributes to the flat pricing we are experiencing. We may see more lender owned homes on the market in the next quarter, due to the aforementioned repeal of the deficiency legislation. The lenders don't have as much reason to forestall foreclosures now, as that law would have benefited them tremendously and unfairly. We will watch the inventory trends for the next few weeks to see what happens.

The positive side is that pendings are still rising, which foreshadows decent sales at the end of this month, and possibly October. The month has started off slow, I would say, but we won't know until the end of September. It certainly will be better than last year, but is not likely to be the best month of 2009. The AWC count also continues to rise, as more and more of potential sales are being delayed as they are short sale properties. This fact may mean that we see a fair amount of closings stretch out into the quieter months of 4th Quarter. I think we are going to see this trend continue, as so much of the available inventory is short sale. Sales are taking longer to go through, so it appears that sales activity is slower than it really is. For example, this same week in 2008, the total number of AWC contracts was only 1,048. It has grown sixfold due to short sale contracts. Those are a large number of contracts that could have already closed, but sit in purgatory waiting for lenders to do something. They are being their own worst enemy here.

It is encouraging to see pendings rising still, as it does denote strength, but we are also likely to see some inventory gains, as we go through the slower winter period. The normal pattern is that normal sellers also take a break in the fall, putting less inventory up for sale after September, but with lender-driven properties being such a large part of the inventory, we will have to wait and see.

I have some things that require my immediate attention, so I am going to cut analysis short today. I will try to make up for it next week.

chris

MLS STATS 8/31/-9/6/09

Pendings and AWC Rise
August Finishes over 8,000 Closings
Active listings flat; inventory has probably reached low point for '09.

PENDING: 12,595 ( +404 from last week)
Pending SF: 11,202 ( +328 from last week)

AWC: 6,363 ( +279 from last week)
AWC SF: 5,641 ( +256 from last week)

CLOSED: 1,947 ( -102 from last week)
Closed SF: 1,717 ( -89 from last week)

Active: 31,110 ( +99 from last week)
Active SF: 23,876 ( +51 from last week)

CLOSED SALES: AUGUST 2009: 8,042
Closed Single Family Aug '09: 7,070

These stats included a holiday weekend, which tend to throw stats off somewhat. Typically, less showings and less sales occur. We do see that pendings rose, along with AWC. Short sale listings are a very large contributor to overall sales right now. Out of 1,031 new AWC contracts since 8/31/09, 732 are short sales. Interestingly though, only 532 of the 2523 homes that went "Pending" in that same time frame are listed as short sales. That is a very telling statistic that shows why AWC has grown so much. These homes don't tend to go pending very quickly, nor close quickly, and linger in AWC for months. Only 535 of the closings that have occurred since then are listed as short sale closings. With so many short sale listings, we can see how this is beginning to "stretch out" sales that should already be occurring. Banks need to stop worrying about whether someone did a dime under the foyer plant, and start loosening up these closings. It doesn't really do a lot of good to let them languish while they thoroughly investigate the finances of the seller. There is no percentage in that for them, they are only stretching their pain out.

August did finish over 8000 sales. I saw an article in the paper about how few sales occurred in August, using yet another data supplier. The article did not give any recent historical data that made any sense, saying how sales were down some percentage. Yes, August was down compared to July, but that is expected. However, the numbers given were just misleading. One, MLS data, while the gold standard for number of sales because of its consistent reporting, reports low. There are transactions outside of MLS- these will only show up in the county recordings. I am not concerned with those sales, as they don't significantly change the totals, and they aren't reported consistently. Statististics are worthless if you don't have other results with which to compare. I use MLS stats as they are readily available, typify the general market, and are updated daily. They report a little low; and there are not going to be a negative amount of recordings-we know this, so this data in the article they get from random people showing barely 7000 sales for the month is not very credible. So you come to the conclusion that they are picking out zip codes, and using only those zip codes for sales. This is just not relevant as so much of our home sales occur in places like Wittmann, Buckeye, Maricopa, and Casa Grande. To start suppressing the numbers by limiting the area reported after long reporting the whole system unfairly reports the real result. August was not the best month this year; July was superior, as was June. August is not the best month of the summer per prior statistics, so this result was not unexpected. We reached 8000 sales which was very good given last year. We reduced the number of listings on the market, and prices maintained. It was a decent month, despite the searching out of negative news by the media looking to pull eyes through fear.

I do suspect that we have probably reached the low ebb for inventory this year. We do expect some lenders to quicken the foreclosure process on many homes that they were holding off on due to the insidious deficiency law they tried to sneak through. It was repealed, and now they have no reason to delay this process. I do think we will probably see a w-shaped inventory report from 2009 through 2010. There eventually has to be more inventory. And as we are going to be leaving our prime sales season, we could see that inventory rise in October. Traditional homeowners tend to slow down listing property going into the winter months here, but we will see more non-traditional listings hit the market from banks. I don't see a doomsday increase, but we are likely to see some. The counter to this argument all year has been that traditional homeowners are staying put, as they can't sell for a profit, and they can't re-qualify for a better home, so their homes are not being made available as inventory, so the supply of bank assets is being offset by the decrease in traditional listings. Its difficult to say whether that relationship will continue, but inventory shrunk markedly this year, despite all of the foreclosures.

One last thing I wanted to mention was that I was in Florence yesterday at Merrill Ranch at Anthem. There is a beautiful golf course down there called Poston Butte, and the summer rate was too good to pass up. I hadn't been there in a year, but what was surprising to me was how many new homes were being built down there as you work your way through the course. It is a fairly new course, and community, but to see as many new homes under construction in the far reaches of the valley was very telling to me. They could not continue to build these homes if they were not selling them. The time of mass spec home production is behind us, and there was a lot of activity, and they were even stuccoing homes yesterday. As a land broker, this was very reassuring to me.

MLS STATS 8/24-8/30/09

AUG. PRELIM CLOSINGS: 7979- a little light.
Single Family Listings Fall into 23K's!
AWC contracts slide slightly-short sales beginning to Close?
**September 1st is the two-year anniversary of this blog. **


PENDING SALES: 12,191 ( -601 from last week)
Pending S.Fam: 10,874 ( -496 from last week)

AWC: 6,084 ( -46 from last week)
AWC Single Fam: 5,385 (-47 from last week)

CLOSED: 2,076 ( +393 from last week)
Closed Single Fam: 1,806 ( +329 from last week)

Active Listings: 31,011 ( -257 from last week)
Active Single Fam: 23,825 ( -176 from last week)

August CLOSED: 7,979
August Closed SFam: 7,010

Sales for August turned up a bit light, as expectations were they would cross 8,000. It still is likely to happen, as realtors sometimes lag in putting their closings in to the system. I usually wait a few days before putting this figure up, but it did close out yesterday, so this is fairly accurate within several dozen closings in the MLS for August.

Pending sales also fell at the end of the month as per usual, but the number is still pretty strong. We will see it grow again going into September, but we will start to see the predictive numbers tail off, as October and November are not expected to be blowout months. Perhaps because of the $8000 credit, we will see some stronger activity after September, but don't bank on it.

Interestingly, AWC contracts fell for the first time, I think, in quite a long time, as sales either are decreasing, or short sales are finally starting to exit the system. There were 159 more short sales in August than July, which means that given August had a smaller sales figure, they do make up an even larger proportion of sales in August than July. Its enough to account for the number, but the number of short sales categorized as AWC did fall slightly from last week, so that does support that short sales may finally start closing, instead of clogging up AWC in the MLS system.

Encouragingly, Active listings fell at the end of August, relatively sharply too. We have finally fallen into the $23K's in Single Family Listings. We have also reached a reduced number of closings, compared to June, so its not all great, but we need to see listings fall as low as possible prior to the fall slowdown. We are likely to see some foreclosures added back to the market in October and November, when sales won't be able to keep up with new foreclosure listings.

Both single family and sales overall average median prices stayed the same- $130K, and $125K, respectively. We are still seeing the pricing effect of bank and short sales making up such a large portion of available inventory. Prices are kept relatively low, as people see these as less valuable properties. There is also a steady supply of them. September is usually a month in which a lot of listings come on the market as well, so we will be watching for that.

We did have 1,580 less listings in August than we did last year, and we did surpass August 2008 in dollar volume of sales, even with the drastically reduced prices year over year. These are minor statistics, but they do point to stability in the current market.

On the media front, nationl pending sales figures made news today. So much of our industry is psychological, and thse are the kind of stories that are crucial to the turnaround. First, it does prove that housing is getting better, but its arguably as important for the consumer to see that its safe to poke his head above ground again- or more accurately, dig up the bankroll he buried in the backyard. The cash for clunkers program was a tremendous benefit to the overall psychology of consumers, at a measly price of 3 billion dollars. We as a nation are sheeple, and we tend to follow the crowd. "If others are buying, I should be too." That is how it works.

The other positive bit of news, besides GM's blowout car sales report, is that the labor market may be bottoming. Let's hope that is true.

Kind of a mixed bag this week. I would have hoped we would blow past 8000 sales in August, but we likely just reached it. But we did have inventory levels falling again, and we reached a new multiyear low in Single Family listings. We also might be starting to see banks dispose of short sales a little quicker, which would be a tremendous benefit to all of us.

MLS STATS 8/16-8/23/09

STATISTICS SHOW MARKET STEADY
Pending Sales Climb Slightly, AWC too.
Listings falling slightly again.

PENDING SALES: 12,792 ( +140 from last week)
Pending Single Fam: 11,370 ( +134 from last week)

AWC Contracts: 6,130 (+117 from last week)
AWC Single Fam: 5,432 (+102 from last week)

CLOSED (by 8/23) 1,683 ( +19 from last week)
Closed SFam: 1,477 ( -2 from last week)

Active Listings: 31,268 ( -48 from last week)
Active Single Fam: 24,001 ( -77 from last week)

CLOSED MTD : 4,983
Closed SFam 4,390

There is not a lot to be gleaned this week, other than the market continues to perform at a sustainable pace. Listings are falling slightly, but not with real momentum. The number of weekly sales is very consistent with last week. It is a solid number for a middle week as well. There appears to be a slight amount of growth to pending sales, as it has continued to climb in recent weeks, albeit at a fairly modest pace. I don't think we will see a big breakout occurring in pending sales, as the recovery is likely to be a modest one. We are seeing continuing growth in the AWC category, which as we have said is not all for the best. They are contingent sales, no doubt, but 5400 of the 6000+ AWC contracts are short sales. Short sales take several more months to sell, therefore they tend up to pile up in number. Their growth continues to take away from actual sales in that the number of short sales waiting to be approved is now more than 50% of the sales we have each month. If they were to close on a normal basis, we would be seeing at least a 10% increase each month. There were only 1384 short sales in July, a statistic dwarfed by the number visible in AWC. Using our simple realtor math, we can see that it takes about 3.9 months for short sale inventory to go from AWC to Closed. If that buyer had not purchased a short sale, the closing would have happened in probably no more than 60 days, and as we know, almost all would occur within 45 days. Short sales effectively reduce the number of monthly sales, as sales are delayed to subsequent months- several months. These are only the contracts that are visible. As i have pointed out, not all accepted contracts by the seller go into Active with Contingency- some are left as Active in order to attract more buyers. It is difficult to measure this, so that we don't look biased towards optimism of the number of pending contracts, we assume that all short sale contracts are listed as AWC- this is not the case, but better to be wrong short than wrong long, or people accuse you of cooking the numbers to paint a rosy picture.

These numbers, should they stay in this range, are very sustainable. Now, we can expect fall off coming in November through February, as is usual here, but we can also expect a stronger recovery of demand come next March. We may have a better 4th quarter than expected, we don't know for sure. I expect it will be better than last year. We are on a good pace this year, and no matter what any news organization says, we have done well to recover from where we were. We can't have it all better in one night; wounds don't heal, and there is no lucky star to wish upon to make it all better over night. The reality is we are almost at full recovery; it is not perfect, prices have not bounced back to what everyone paid for their homes, but we are fortunate people are buying, and that first time buyers are enthusiastically entering the market, and finding affordable product. There is definitely more good than bad happening right now, and while this depends on the recovery of our economy, housing is doing as well as any of us should be hoping right now. These are real numbers, not projected what-ifs that we hear from so many negative sources.

Here are some other real numbers you never hear about. We will pass the number of total sales in 2008 by Wednesday of this week. We are currently 269 sales short of the 59,237 sales posted in 2008. We are in August, which means we have done that in what will essentially be 7/12 months. We can expect another 4000 or so sales in August, so we will have obliterated the number by 4000 in 2/3's of the time. We are currently ahead of the same point in time last year by 22,580 sales.

Here's another one. There have been 10,028 less listings put on the market this year than there was by the same point last year. This is the fact this year, despite the foreclosure crush the media talks about.

If you are still feeling negative about where the housing market is headed, here are a few other items that I rarely mention because the concept is a little broad for short term analysis. These are numbers pulled straight from MLS, so if you disagree with me about a recovery in the housing market, consider these numbers as well.

-The median new list price has been climbing for three straight months, and generally climbing for six months.

-The dollar volume of sold listings has exceeded the same months last year 3 out of the past 4 months, will probably be 4 of the last 5 by the end of August.

-The number of new listings each month this year is less than last year every month this year except for March.

-The number of sales has exceeded every month last year by a minimum of 54.9%.

Things as I see them are heading in the right direction, and there are no guarantees that we won't see some bumps, it is just about time for some optimism about the market to take hold. Ultimately, without optimism by consumers, the market will not recover. This 24 news cycle has a tendency to always find the negative no matter how positive the numbers coming out are, and they just continually feed the pessimism. As I wrote that last sentence, I thought "I better back this statement up." So, I decided to look for a news article that supported what I said. I didn't have to go far. It was a headline. Here is a perfect example of reporting good news, but spinning it negative. The article quotes the most bearish of housing analysts, Robert Shiller of the Case-Shiller index, just falling over himself about this massive increase in price, but they are already begging the question of why haven't we won the next victory, even though that battle has yet to be fought. I do get frustrated by the way news is reported, and I have sworn off watching about 90% of the financial news that I used to watch, only really tuning in to Fox Business Channel occasionally, for mostly the scenery.

You can only take so much of this being dragged one way by the hard news, and then being dragged the other way by their manipulation of your fears in order to get you to tune in again for the next death-defying, cliff-hanging, economy collapsing statistic that is going to show up and spell either doom for us, or allow us to sleep safely in our beds-for this night at least. Their methods remind of watching the old NWA wrestling when I was a kid. They never left a show without a bad guy entering stage left, pounding the hero with a chair or something, starting a melee as the camera cut out and the show ended. As kids we just died waiting for next week's show to find out what happened when the cameras wer off. The modern media has taken this to a global scale, and we all sit around waiting for them to tell us what is happening that we can't see. The financial channels, when they were there mostly to sell us on investing in wall street, basically operating the same as trackside television does for horse racing, encouraging betting, we at least knew what their purpose was. Now, it is either at least more insidious, and certainly more subtle, as their own real quest is for ratings has them tapping in to the global soap opera of Life On This Planet, and using the flow of really useless information to most of us, to put us in that same mindframe as the kids on the couch watching saturday night wrestling: don't miss the next show, because its going to be big, Big BIG!!

Don't buy into the minute by minute ups and downs. We are all interested where things are going, but news is no longer just about reporting news, its about them needing to hook more people, and a few thousand people to financial channels is more significant than we realize. Watch the larger trends, watch out for the "yeah, buts" reports. We are likely to see a lot of them. Sorry about the rant, but I have been getting so frustrated with the positive reports followed up by the "could happens". Have a great week.

ARMLS STATS 8/10-8/16/09

Brett Farve Signs with the Vikings!
Pendings Up, Sales Up, Overall Listings Slide
AWC continue to grow; not necessarily a positive.


Pending Sales: 12,652 ( +284 from last week)
Pending SFam: 11,236 ( +231 from last week)

AWC: 6,013 ( +186 from last week)
AWC SFAM: 5,330 ( +152 from last week)

Closed: 1,664 ( +252 from last week)
Closed SFam: 1,479 ( +236 from last week)

Active Listings: 31,316 ( -230 from last week)
Active SFam: 24,078 ( +14 from last week)

CLOSED MTD: 3,257
Closed SFam: 2,879

Statistics for the week don't tell us a lot; the closings continue to show strength, putting us on track for 8000+ closings in the month in all likelihood. Overall listings fell again, but single family stayed stable. Either condos are starting to sell, or there are a few more foreclosures making an appearance. I will let a few more weeks go by before I do a detailed analysis of this. The national new housing sales is actually positive, with overall starts down, but single family starts were actually higher. This being reported as negative news is baffling certainly apartment construction contributes to economic activity, but reporting it in the context that housing starts are down, because apartment construction is down, is deceiving. Beazer, Fulton, DR Horton, and Toll Brothers could care less if apartment construction dropped to zer0; in fact they might like it, as it denotes how consumers view economic conditions. If they feel good about the long term, they will buy homes, if they are unsure, there is more demand for rental properties. I have always been baffled by the combination of these two statistics.

The statistics show we are still in recovery, albeit with one that there are still significant numbers of foreclosures out there. We still see the AWC category reaching new records each week, due to short sale contracts piling up. At some point, these short sales must start closing. Only 535 of the closings this month are short sales so far. These are starting to jam up the system, and the banks need to do a better job of clearing these.

Most importantly this week, and quite honestly the reason I won't be doing a lot of in-depth analysis, is that Brett Favre signed with the Vikings, and I am just too excited about the season to do much analysis today. So between that, and the mid- month point we are at, this is going to be an abbreviated post. It looks like we are still doing well, and will probably continue to do well into September. The Vikings will start doing well in September. Go Vikes!

chris

MLS STATS 8/3-8/09-2009

LISTINGS RISE FOR FIRST TIME IN MONTHS
PENDINGS UP SHARPLY, AWC UP AGAIN
Rise in inventory attributable to Lender -owned listings...

PENDING SALES: 12,368 ( +340 from last week)
Pending Sing. Fam: 11,005 ( +278 from last week)

AWC: 5,827 ( +126 from last week)
AWC Sing. Fam: 5,178 ( +102 from last week)

Closed Escrows: 1,412 ( -1362 from last week)
Closed Single Fam: 1,243 ( -1194 from last week)

Active Listings: 31,546 (+215 from last week)
Active Single Fam: 24,064 (+221 from last week)

Closed MTD (8-9-09): 1526
Closed MTD SFam: 1,342

The big news of the week is that active listing rose for the first time in quite a while. The reason for this was a sharp weekly increase in single family listings. There were 753 new single family listings compared to the week before. Its highly likely that some lender pushed out a whole raft of inventory all at once to contribute to this rise. The other categories- condos, mobiles, townhomes, etc, were actually down slightly. Compared to the previous week, there were 100 more active listings put on the market in Phoenix, 42 more homes in Scottsdale, 29 more in Maricopa, 10 more in Mesa, and 9 more in Surprise. There is no real discernable geographic pattern where the increase in listings is coming from. New weekly listings are broadly spread, as you can see, and would expect. The bulk of the listings, 1277 out of 1989 single family listings, occurred in the price range of 100K-500K. Only 633 of the 1989 were listed as lender-owned, however, which I found surprising. 535 were short sale properties. That number is not particularly high, as the previous weeks short sale listings were 466-this is not the source of the increase. Lender owned does explain a bit more of the increase- there were 431 lender owned listings the previous week, an increase of 202. That does explain the inventory. We may see more of that from lenders as a whole, but as I understand it, one lender in town is pulling all of their listings off the market in the next couple of weeks, as they take the process in house, apparently. Or they may choose to pull these homes off the market, temporarily, as prices seem to have bottomed out somewhat, and they may be able to get considerably more in the next several months. If their financial position has stabilized somewhat, they may feel it is worth the wait to do so. It will be interesting to see if this was an aberration, or if we have more increases in lender owned properties.



We also saw pending sales rise fairly sharply, which is a good sign that we will have continuing demand, at least through August and September. The AWC figure keeps rising, and out of that 5,178 single family AWC contracts, 4568 are noted as short sales. That seems high, but out of 24000 single family listings, over 25% of them are short sale listings. So, many of the homes under contract would be short sales, as they often are the homes had at the best prices and condition. Lender sales are often in worse shape than short sales, as the short saler has a motivation for upkeep. There is a growing distaste for this process, and th federal government has said they are going to prompt greater short sale success with the lenders, so perhaps this process will start going quicker. It should be noted as well that many short sales are NOT changed to AWC, as many sellers will keep these homes as active as it is desirable to try and find someone who will pay a better price, which can easily happen over the course of the months it takes to get a short sale through.

Interestingly, there were 230 short sales completed last week, and while the distribution of homes on the map usually follow the pattern of density of the metro area- meaning that Phoenix gets a high distribution of listings, sales, etc, on the map, short sales in Phoenix seem to be tougher to accomplish. Look at this map of the short sales from last week:

Very few short sales occurred in Phoenix. That could be an aberration, of course, but it seems like our subarbanites are more likely to ask banks to take a hit on the loan. Its more of a social experiment than valid real estate news, but it would be interesting to see if the incidence of lender foreclosures is higher in the core city or the suburbs.

In other items that are pointing to a more positive 4th quarter, consumer confidence was up. Consumers are just starting to shake off the cobwebs, some buying new cars, others are investing in homes. We also saw productivity rise sharply, which will show up in profitability in later quarters. Of course, this is usually at the expense of bloated payrolls, which have been slashed by companies big and small.


The gorilla out of its cage this week is the increase in single family lender-owned properties. We knew it was coming eventually, but we don't want it to be a trend. I would say that it is a fairly timid increase, as we have been told various times about the 5000-10000 in a month scenario. This looks like a little spike, and quite honestly is looking more and more that this is the result of so many homes going the short sale route that could take 90-120 days to complete, which is 3-4 times as long as a normal escrow. A thought I would leave you with is that if we have such a short sale loaded AWC category, how many potential short sales are there still sitting in the Active category? I myself have 4 short sale deals I am working on, and only one of them has been changed to AWC, the rest the agents have left as active. That is in land, people, not houses, so you can imagine how many "invisible" residential contracts are out there right now. Hopefully, that process begins to speed up, as it is beginning to clog the system.

MLS STATS 7/27-8/2/09/09

**JULY SALES TOP 9000**
Active Listings Drop again.
National Housing News turns positive.

PENDING SALES: 12,028 ( -814 from last week)
Pending Sing. Fam: 10,727 ( -704 from last week)

AWC: 5,701 ( +11 from last week)
AWC Sing. Fam: 5,076 ( +19 from last week)

Closed Escrows: 2,774 ( +921 from last week)
Closed Single Fam: 2,437 ( +790 from last week)

Active Listings: 31,331 ( -364 from last week)
Active Single Fam: 24,043 ( -307 from last week)

CLOSED IN JULY: 9,096
Closed Single Fam: 7,987

July finished up with just enough kick to top 9000 sales for the month; this figure is less than June's Sales of approx 9300, but then it always is. Still, July was a very good month for inventory reduction and sales increases, as inventory has continued to fall, although at a slower pace than it had. Inventory is not going to fall to zero, so we are starting to reach the bottom of inventory's elasticity, especially given the current economic realities. We are doing very well considering the challenges. We are now at 3.01 months of single family inventory, and and about 3.4 months overall. This is a very sustainable level; it is probably the appropriate level that will cause home prices to bounce back to what I would refer to as natural levels. Median prices remained relatively stable from June to July, with the admittedly small sample size of August showing a slight uptick already. The direction of prices is going to go up, of that we can be sure. The prices are currently deflated, but this condition will not last forever as psychology improves with the positive news coming from seemingly every corner of the housing industry. What I can point out price wise is that dollar volume for single family sales outstripped June's total by $7,500,000. This might seem insignificant, except that were more than 250 more homes sold in June than July, and this translates to about an average $12,000 per home increase in price. This is not the median, but the average. This shows that prices are getting better, even as the median continues to be held down by the sheer number of low end homes being sold. There are even seems to be a little more movement in the million dollar market, as 91 homes sold in July at $1,000,000 plus. This is about a 1/3 increase over just a few months ago.

Regarding current inventory, I suspect we may see a little spike coming up as it seems lenders have been holding back foreclosures to take advantage of a new state law that is supposed to go in effect in September that would allow them to pursue the owners for a deficiency judgment. This law was written poorly in the middle of the stream, and a pretty big outcry has forced even its sponsor (Pierce, Prescott, AZ) to recant it, and it is likely going to be repealed. Its possible the lenders were waiting on this law to go into effect, so there might be a spurt of new actives coming on line if they decide to accelerate the foreclosure process, as there would be no advantage to them to hold off any longer. I am not positive of this effect, but it seems reasonable that there will be some spike in inventory. Of course, demand may dispose of that quickly, as it has been doing with foreclosures all year, but we don't know how big a wave it will be, nor do we know how well demand will hold up.

I don't normally like to give a reading list of news articles, but working this many into a coherent paragraph would require more time than I have today. So here are several articles from around the web that are starting to change the psychology around the housing market. They are wide-ranging and realistic, and I think they can start to be believed as more than cheerleading for the industry. Especially the Case-Schiller data- they are like listening to the resigned-to-a-nuclear-war BBC announcer in the sixties with the doomsday clock ticking in the background normally- pessimism and destruction on its way, all the time. If they are acknowledging better numbers, we have likely bumped bottom. Here is the list, should you care to follow the articles:

Pending Home Sales Rise: CNBC

Case Schiller Reports Reversing: Realty Times

Local: Builders report positive signs: AZ Republic

Foreclosures Stabilize in Arizona: AZ Republic

Builders find success with smaller homes: KTAR

Signs of Hope in California Housing: CNBC

Now, you may not want to read all of these, but the point really is that there seems to be some really good news out there developing in the housing industry, and it is about time. The news is there, which is critical to turning around the psychology of malaise that the industry has suffered through for the last several years. We are hoping for a strong month of August, and we will need to see if pendings pop back up after their sharp end of the month drawdown in July.

It was a very good month of July, and a very good week, as the positive news seems to be tumbling out all over. Hopefully it will continue.

chris

MLS STATS7/20-7/26/09

Pendings slide, AWC up again
Sales to Top 8000 for July, less than June
Inventory falls slightly again


PENDING: 12,842 ( -97 from last week)
Pending Single Fam: 11,431 ( -81 from last week)

AWC: 5,690 ( +95 from last week)
AWC Single Fam: 5,057 ( +71 from last week)

Closed 7/20-7/26 : 1,853 ( -165 from last week)
Closed Single Fam: 1,647 ( -126 from last week)

Active Listings: 31,695 ( -97 from last week)
Active Single Fam: 24,350 (-109 from last week)

Closed MTD 7/26: 6,362
Closed MTD Single Fam: 5,607

The numbers don't tell us a whole lot as we get close to closing out July. The number of pendings seems to have done its normal peak in June, signifying that we have likely reached our potential best selling range. July is shaping up to be seasonally in line with what normally happens after June. This implies that these are not just recovery numbers that will continue to rise, but are the actual market numbers. This is good and bad; this means that we won't have continued growth in sales, which in a recovery period would be very nice to see; but it also means that because they are not growth numbers, these are probably long term sustainable levels of sales, which are very healthy numbers. We might see things kick up a bit in September, but this is our selling range here, between 8000 and 10000 sales a month.

Conservatively, you might say we will only achieve another 1800 sales this month, which would put us over 8000. This is the low end, as statistically the last week is always stronger than this week, for example. So we can expect that at the minimum. A more realistic number may approach 2500, which would take us to approaching 9000 sales. I would consider that to be a more accurate assessment of where we are going to finish. I don't see great potential for climbing over 9000, but its possible.

Going back to the pending numbers, we seem to have hit our ceiling for that statistic, and have retrenched a little. I don't know if that is because homes are now selling quicker, with less hangups, as we aren't losing a lot in the way of overall sales by the end of the month, or if the short sale escrows are instead being placed in AWC, which is still rising. There are certainly sufficient numbers of pending sales, but the slight retrenchment troubled me for a while. We have been getting good consistent weekly sales now, even if those numbers are off their highs, so it be a little overanalysis on my part.

Inventory drops seems to have leveled off. We have reached a point where the excess has been mostly sold off, and we are now at a level of three or so months worth of homes, which is a normal market that will cause small price upticks. As I had earlier posted, national stats have now shown a slight price increase for U.S. homes, which is an indicator that we have reached a bottom in prices as well as in the oversupply of inventory. We also had the surprise announcement of the increase in new home sales at a pretty solid 11%, which will eventually spur consumer confidence, although consumer confidence lagged in July. This is somewhat of a lagging indicator and I expect to see that number better in the later summer. We do have the difficulty of what looks like a jobless recovery, so we have to see how that plays out.

It was a good solid week for sales, and we should have an acceptable level of sales in July. It would be nice to see continued growth in demand, but demand at this level is acceptable, and will continue to push prices upwards. The bogeyman still out there is how long the supply of foreclosure homes holds out. We know they are out there, and potentially more may come available.

Off point a little is the announcement of this anti-deficiency law that Arizona passed, essentially bypassing consumer protections from banks should they foreclose on a home you have not lived in. This law allows them to pursue you for the deficiency, which would be devastating for so many people. This was not a well-thought plan by the legislature, and was done at the behest of bank lobbyists. The big problem with it is the law of unintended consequences- their purpose, they say, is to prevent "investors" from not paying them back simply because its upside down, so they have to live in the property for six months in order for it to be classified as a residential home. The problem is that these kind of investors are few and far between, and what is really far more common is the individual with the second home, or a vacation home, or the homeowner who got caught in the middle of buying a new home, and couldn't get theirs sold before the market went south. The banks, of course, realize this, but as long as they can get the law rewritten so they can get their nose back into the trough for as much as they can, they don't care. Its a travesty that our legislature, which is supposed to look out for the consumer, is so clearly in the banks' pockets. This is especially disconcerting, as they claim its not retroactive, but anybody who is already in a home who is only starting to lose it is subject- in fact, the bank can hold off foreclosure until post september 30, and make those people subject. Call your legislator, and ask him or her if they support this noxious bill. They will get the message. Personal responsibility is one thing, but to cause the personal ruin of tens of thousands of people in this state is not in our best interests.

I will get off my soapbox now, but have a great week.

ARMLS STATS 7/13-7/19/09

News media finally seeing the light?
Pendings Fall; but Sales top 2K for the week.
Listings and AWC flat as summer takes hold.



PENDING SALES: 12,939 ( -306 from last week)
Pending Sin. Fam. 11,512 ( -261 from last week)

AWC: 5,595 ( +14 from last week)
AWC Single Fam: 4,986 ( +22 from last week)

CLOSED 7/13-7/19: 2,018 ( +494 from last week)
Closed Single Fam: 1,773 ( +441 from last week)

Active Listings: 31,792 ( -16 from last week)
Active Single Fam: 24,459 ( - 1 from last week)

CLOSED MTD (7/19): 4,474
Closed Single Fam: 3,924


Pendings fell sharply, but this is probably due to the increased number of sales that closed this week. 2,000 sales is very good for a middle week. It seems we have reached our natural inventory levels, as listings declines have now flattened out. We are likely to see some weeks where listings increase again. From what I heard from some local realtors, they had some slow weeks from buyers when rates climbed back up for a while; rates have fallen again, however, and applications have risen solidly.

Sales remain good; not as good as June, which is typical, but pretty good nonetheless. We will expect that July will finish in the 8000's in overall sales, which of course is down from July, but it is still a very strong number. I expect the number of listings to climb a bit as well, before being pushed down in September. We are likely to have a small W-Shaped recovery, as many people are dealing with job losses and there is likely to be a high inventory level for a while. It may not be overwhelming, but it might be steady for a while.

I think the most interesting development this week is how the national news media seems to be turning the corner from the gloom and doom it has been spouting. All of a sudden, Oil is up on better housing news, and rates are low, and signs of stability as we have reached 12 months of falling supply.

This is the very best thing for our industry, as it is the consumer psyche that drives the idea of whether a major investment such as a home is a good idea or not. Put all the stimulus you want out there, but if someone thinks the value of their home is going down over the near term, they aren't buying it. We seem to have some changes in how people are perceiving the economy; all of the positive earnings reports coming out are doing a lot of the heavy lifting right now. The news on the street is good, so the commentators sound more pleased, and this gives people more hope that stability is here. Many pundits are saying the see the recession coming to an end very shortly. With that kind of talk dominating the airwaves in the last few weeks, it is no wonder that we are starting to see a shift out of depression mentality, and one that is more hopeful for recovery. Housing news is getting better, and while what we see right now may be as good as it gets for a while in terms of demand, we could live with that. We don't need to see 2005 again to have a healthy industry.

I do think we are going to see a bit of a lull here in July and parts of August, but we should have an excellent September. October is too hard to predict, as we have that expiring tax credit, and there may be a lot of people who want to get in under the wire of November 30th. There could be an artificial boomlet in those two traditionally weaker months.

We are still going in the right direction, with good sales numbers, high buying activity, and relatively low inventory. We are also seeing prices climb, and for the first time, there seems to be optimism in the news media that housing is turning around. That is really the first time I can say that has been the case for several years, and it is one of the crucial steps in regaining consumer confidence in investing in a home.

ARMLS STATS 7/6-7/12/09

Pendings & AWC Rise
Active Listings Fall slightly


PENDING SALES: 13,245 ( +375 from last week)
Pending Single Fam: 11,773 ( +316 from last week)

AWC: 5,581 ( +115 from last week)
AWC Single Fam: 4,964 ( +104 from last week)

CLOSED: 1,524 ( -994 from last week)
Closed Single Fam: 1,332 ( -887 from last week)

Active Listings: 31,808 ( -170 from last week)
Active Single Fam: 24,460 ( -73 from last week)

Closed MTD July: 2,412
Closed MTD Sing. Fam: 2,111

Pending sales rebounded last week from the holiday weekend, which shows there is still deep demand for housing. The demand is still at the lower end of the pricing spectrum with 2304 of the 2412 sales in July so far selling for under $500,000 or under. This is a trend we expect to see for a while, as financing for higher priced homes has lagged available mortgages for entry level properties. There also seems to be a national trend showing continuing demand, as mortgage applications continue to climb.

Active with contingency contracts are higher, but this is probably a mixed blessing-some of the increase is undoubtedly short sales, which tend to clog up the system longer than most sales. There is some evidence that much of the current AWC inventory is short sales- most of the best priced property is of course either lender owned or short sale properties, so this would make sense. The actual numbers are unclear; the statistic is not well-defined on MLS, and I am going to do some checking to see if I can nail that down. The statistic literally shows every home in AWC as being a short sale, which I don't think is the case, as there are significant other sales out there.

The silver lining of this statistic is that our actual monthly sales should be even higher, but these sales are pushed out another 2-3 months in some cases. This has a significant impact on monthly closings, so demand is actually better than what our closings show. What is not positive about this is that there are still so many short sales. The reality is that inventory is weighted heavily with short sales and lender owned properties. As this is the case, they also become a substantial portion of sales. The fact is, we have a bottleneck in sales due to lenders holding up short sales. We may not love the kind of sale it is, but it is still a sale, and for the most part, short sales will sell at "closer to market" prices than will lender owned repos, so we need to look at them as very relevant to the market. Banks need to start allowing a better flow for short sales; they are simply postponing the inevitable anyway.

There is not a lot of other info to be gleaned from statistics this week; it is too early to tell how this month will end up, and while active listings have continued to fall, the level has fallen to its potential lows given the economy and employment factors. Buyers are still buying, but we are going to continue to see some people who will not be able to hold on to their home as their income dissipates. We are not out of the woods, but let's look at what our housing market has accomplished in the last six months-we went from disaster to being back to normal levels of inventory and sales, and while sales are at lower prices, even those are starting to rebound. Hopefully, we are one of the states tha can experience a little job growth over the second half of this year, and change the psyche of the consumer to a more positive outlook.

MLS STATS 6/29-7/5/09

***JUNE CLOSINGS: 9,359***
Pendings Fall in first week of July
AWC still rising slowly
Listings Fall again to 31K's
**2.95 months of single family inventory**


PENDING: 12,870 ( -600 from last week)
Pending Single Fam: 11,457 ( -538 from last week)

AWC: 5,466 ( +43 from last week)
AWC Single Fam: 4,860 ( +32 from last week)

Closed 6/29-7/5/09: 2,518 ( +485 from last week)
Closed Single Fam: 2,219 ( +423 from last week)

Active Listings: 31,978 ( -539 from last week)
Active Single Fam: 24,533 ( -390 from last week)

CLOSED JUNE '09: 9,359 ( +123 from May '09)
Closed Single Fam: 8,311 (+68 from May'09)

June finished up decently enough to surpass May's sales, giving us our best month of the year so far. It was a slight rise, but the numbers very much reinforce that we are in a period of recovery in housing. July will likely be slightly lower, but still strong, as will August. September last year was our best month of 2008, so we are likely to see some continuing strength in the market for at least the next several months, and we are likely to surpass all of 2008 sales in the middle of August!

Interestingly, AWC contracts continue to rise-not sharply, but it is still up. It is a predictor, but I don't think it is an accurate predictor of what July sales might be. I don't expect July to surpass June's, but we don't know that for sure. Our pendings are a little light, as the end of the month sales take effect. We will see if the number bounces back next week; if it doesn't, I would expect we will see a sales range in the 8K's in July.

We are still seeing inventory drop, which given the dire predictions for June listings, is a very positive sign. The drop isn't as pronounced now, as we continually work with smaller numbers, but smaller inventory gives builders cause to start thinking about building and competing again with resale homes. If you do the math on the single family figures above, you will find the 2.95 month of single family inventory. 24,533 divided by the 8,311 sales = 2.95 months. This is a significant milestone. It is not likely to stay under three months of inventory, but it is an important milestone when considering whether we are in recovery or not.

One of the most interesting examples of this inventory shakeout that I have seen is in Maricopa. The fact is, Maricopa is one of the hardest hit areas for foreclosures due to it rapid run up in prices, and its relative remoteness from places of employment. The price was not justifiable, and many people who overpaid chose to walk away. But, at the right price, this community is very much in demand. Here is the current situation. There are 406 active single family listings in Maricopa- not overly high for the size of the community it has become. There are 444 pending single family sales in Maricopa! If you bring in the AWC contracts, which I am sure contain a large contingent of short sale contracts that languish in AWC for a while, there are 688 homes under contract! This looks to be a relatively new rush to Maricopa, as there were only 273 single family homes sold in June-this bears watching to see if these homes start closing at a more rapid rate, but 273 homes sales give active listings of 444 is a pretty strong number. I am quite sure many listings that are in maricopa aren't listed as maricopa, as they are rural, but this area looks like a builder opportunity in the next year. It is good to see demand back for Pinal County.

Not to belabor the point, but the idea that we are currently working with less than 3 months worth of inventory is mind boggling considering where we started the year. Yes the dollar totals are bad comparatively to other years, but we knew that-what is important that new buyers are feeling confident enough to buy, and it is driving the market forward. We still have excellent interest rates, value in the pricing across a broad spectrum of housing, and financing is getting easier. Obviously, we have employment issues in the US, but despite that, our housing situation continues to improve. Its not perfect, but its improving, at least locally. Less than three months of inventory is the basis of a formula for home prices going up, which they did in June. It is a very broad measure, but the MLS statistic shows the median sale price went from $119,700 in May, to $125,000 in June. It is not a detailed analysis, but that is a sharp gain. Even more hopeful is that single family median prices went from $121,500 to $130,000! That is a sign that demand is starting to push prices.

There are many reasons for optimism that the market is finally turning, and the fact that we have a fairly low supply and and prices are rising fairly sharply should tell you something. We have a lot of economic challenges, without a doubt, but at the same time, for a metro area that is highly reliant on the real estate industry, we can point to our biggest economic and employment engine and say its getting cranked up again. We might be 6 months away from the news feeling good about it, but the statistics don't lie- we are selling homes at a good clip, and we are starting to sell homes at higher prices. A couple of very important conditions when considering the direction of our housing market.