PENDING SALES RISE DRAMATICALLY
PENDING FIGURES BLOW PAST 8000, AWC reach 1300!
Active Listings have reached lowest point since at least summer of 2007.*
PENDING SALES: 8445 ( +860 from last week)
PENDING SINGLE FAM.: 7643 ( +758 from last week)
AWC contracts: 1303 (-18 from last week)
AWC contracts Single Fam: 1177 (+100 from last week)
CLOSINGS: (2.2-2.8) 837 ( -769 from last week)
CLOSINGS SINGLE FAM: 756 ( -675 from last week)
ACTIVE LISTINGS: 51,276* (-207 from last week)
ACTIVE SINGLE FAM: 41,753* (-453 from last week)
CLOSED MTD (thru 2/8/09
OVERALL: 861
SINGLE FAM: 778
The numbers are very interesting this week. Pending Sales shot up sharply, surpassing anything we have seen since I started this blog in 3rd quarter of 2007. The number of new AWC contracts also grew, indicating that there is some backbone to this rise. Additionally, inventory is at is lowest peak during that time as well, and this January is a month where inventory has risen in the past. I could dismiss the falling the inventory to the government backed stoppage of foreclosure activities, but that is not something that affects the demand side of the equation. There appears to be the return of demand for housing here. We did not see it show up in closings in January, and the first week of any month is not a big sales month, but for reference points, look at the 2008 archives.
This week in February 2008, we had 4842 pending sales and 837 AWC contracts, for a total of 5679. This year, in the same week, we have 8445 and 1303, for a total of 9748. That is a huge indicator that we can expect better sales in March; I would forecast that February sales will reach into the 5000's, but much of the buildup in pendings came very recently, and the end of February is too close. I would expect March to be a blowout month though, perhaps tallying 7000 sales, or higher, depending on the action in the next two weeks.
Looking deeper into 2008, we didn't reach even 7000 pendings until April 22nd last year. If our increases hold to their normal pattern, we will see inventory fall to the high 40k's by the end of April, and single family home inventory in the high 30k's as well by the end of April. We should see at least 6000+ sales beginning in March, and continue an upward trend all through the summer, slicing inventory closer to equilibrium. We have a long way to go towards equilibrium in the market, but if we can continue at this pace, it is not quite so distant.
What is remarkable is how quickly the pendings are rising. Recorded pendings topped out at 7606 last june, which is one of the strongest months of the year for home sales activity. We have beaten that total by 11% here in early February, which bodes well for the spring. June experienced 5763 sales; a number I don't think we will quite reach in February, but should go into making March a strong month.
Overall, I am very optimistic about our mid-year status. We haven't seen the benefits of the stimulus bill kick in as of yet, and we are already positioned for recovery in the market, in terms of equilbrium. I know there are a lot of naysayers out there who keep pointing at the falling prices of homes-they are right, homes prices will have downward pressure until we reach equilibrium. That was a foregone conclusion when inventory spiked and the number of sales dissipated. It doesn't take a great deal of sophistication to understand that they would fall, but many of these people think the prices are still going to fall through the floor, and that is just not the case. They have fallen sharply no doubt, but the biggest reductions are behind us, it appears, as buying activity is picking up a lot of steam. We might see even more spikes once that huge tax credit is confirmed for buyers.
Have a great week!
chris just
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