PENDINGS TOP 9000!
SURPASSES HIGH HIT LAST YEAR BY 16%-IN JUNE!
INVENTORY reaches multi-year low, Could be in 49K's by end of month.
PENDING CONTRACTS: 9061 ( +616 from last week)
PENDING SINGLE FAM: 8,211 ( +558 from last week)
AWC Contracts: 1,359 ( +56 from last week)
AWC SINGLE FAM. 1,225 ( +48 from last week)
CLOSED ESCROW: 1,116 (+279 from last week)
CLOSED SINGLE FAM: 994 ( +238 from last week)
ACTIVE LISTINGS: 50,679 ( -597 from last week)
ACTIVE SINGLE FAM: 41,130 ( -623 from last week)
CLOSED MTD (FEB 15) 2005 ( +616 from SAME PERIOD Feb. '08)
CLOSED SINGLE FAM. 1795 ( +654 from SAME PERIOD Feb. '08)
The resale market is continuing to show surprising strength, with pendings increasing at a very rapid rate. They are at a very high number comparative to recent performance. Using February of 2008 data at approximately this point in the month, there were 5109 pending sales, and only 880 AWC contracts. Using these numbers, we can safely say that March and likely all of 2009, is going to be far better than 2008, and the stimulus provisions, weak as they are so far, haven't even kicked in yet. The falling prices have a lot to do with this, but there does seem to be a strong demand for housing returning. Even in February 2004, sales through February 15 totaled 1,908 homes, which is 97 less sales than occurred this year! Even in early 2006, while we were still in a relatively strong home sales market, there were only 2,235 overall sales.
Even with this demand, as some people rightly point out, the problem is still inventory. I completely agree with that, so let's look at that. Last year, between the first week of January to February 17th, inventory rose by 3,896-almost 7.5%. This year, in the same period, inventory fell 3.6%, during a period where we usually get a rise as people who put off putting their home on the market during the holidays get them listed. Our inventory is 10% below that figure, and seems to be falling fast. We are not geared up for a high finish in February sales, although they will be respectable. I would imagine in March we will see upwards of 6500 sales, however, and that might be conservative. 6500 sales would put our inventory depletion rate at 7.6 months using the current level. The numbers in single family only dwellings look even better. Inventory there is at 41000, and SF sales are making up about 90% of overall sales, so there is a disproportionate amount of sales to listings for single family. That brings the ratio down to 7 months of inventory-not great, but compared to a recent figure I saw for Vegas of 43 months, we are well ahead of the game. These ratios, by the way, can change rapidly, as the increased sales feed on the inventory, further perpetuating the trend. An extra 1000 sales of the estimate would mean 1000 few listings, and that knocks a whole month's worth of inventory off the ratio. The same bad mechanics that brought us into this mess could also bring us out quicker than we can imagine. The market should be fairly stabilized if we reach a 5 month supply of homes-that is well under what many mature markets are normally and experience slight upward pricing pressure at. We are used to higher prices and lower inventory numbers here, but there is still some economic and mortgage debacle fallout coming, and inventory could be buoyant for a while. It is not inconceivable to see a 5 month supply ratio reached by June or July. The government process is going to prevent many homes from becoming inventory this year.
I am most enthused with the inventory trends. I am going to try to make some graphs to show the improvements, but I have decided to do single or double purpose graphs other than an omnibus graph. I have one of those, and it is simply too ponderous to be useful, as many statistical representations become non-effective. I am going to do a seperate one for pendings, Closings, etc, and see how that works. It takes more time, unfortunately.
Here is a link to a story about home prices going up in a west valley community. A very small sample size, but this is the kind of anecdotal evidence that we will experience when we start to recover.
Thanks for reading. I think there is starting to be some light in the tunnel in our market!
chris
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