FEBRUARY FINISHES STRONG: 5400+
Active listings Drop sharply, Single Family Inventory now below 40,000!
AWC CONTRACTS CONTINUE TO RISE-now 1500+
PENDING: 9,587 ( -69 from last week)
PENDING Single Family: 8,711 ( -35 from last week)
Active w/Contingency: 1,563 ( +73 from last week)
Active with Contingency Single Fam: 1,431 ( +83 from last week)
CLOSED 2/23-3/1: 2,183 ( +941 from last week)
CLOSED SINGLE FAM: 1,966 ( +866 from last week)
CLOSED FEBRUARY: 5,467 (+742 from Jan '09) (+2028 from Feb'08)
CLOSED SINGLE FAM FEB: 4,896 (+620 from Jan.09) (+2015 from Feb'08)
ACTIVE LISTINGS: 49,279 ( -999 from last week)
ACTIVE-Single Fam: 39,792 ( -765 from last week)
The last week of February was a good one for the Arizona Market, despite the national news on the housing front. Arizona's economy might be doing better than others, or perhaps we have better affordability-I am not sure why our pending numbers have spiked, while the national figures have fallen. We are clearly in our best position in several years on the housing front. Prices have deflated, much like everything else-stocks, energy, commodities, building supplies, you name it-but we are in a demand rebound as these trends do indicate. Our pending numbers are holding just about steady from last week, even though there is normally a precipitous drop at the end of the month due to closings. We had a great week of closings, yet new contracts have been replacing the closing contracts. The number of active listings keeps sliding sharply; we are now at a 9 month supply of overall listings, and a 8.1 month supply of single family homes. This is not a scientific formula, but generally a six month supply is normal for stable markets, and I think we would see the beginning of equilibrium in prices at a 5 month supply. This is not far off, if current trends continue. We could see inventory levels for Single Family homes nearing 37000 by the end of April. I am forecasting 7500 overall sales for May- its not exactly scientific, but its based on a formula I concocted. It seems logical as well, so it passes the smell test for plausibility. Remember, we are not even to the best selling season yet, and we have things going in a very good direction. Our inventory should really get chewed up in May, June, and July.
I do think that the Obama administration's efforts to stem foreclosures are going to keep quite a few homes off the market over the next few year that would have become inventory as well. I think the plan really misses the heart of who needs help, as you have to almost be so well qualified as to not be in any financial trouble, but it should prevent some foreclosures. We seem to be doing pretty well without it, though, and I am optimisitic that by the end of July we will see prices for ready to live in homes stabilize. There will no doubt be low priced foreclosure and fixups out there dragging down the price, but normal liveable housing will see the prices stabilize.
The next several months are setting up to be the end of the down cycle for resales. Builder sales are another matter, unfortunately, but there can be no recovery in new housing without the resale market reaching equilibrium. The good news is that it might be very much in our immediate future.
Chris
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