PENDINGS REACH 11,000+, New Multiyear High!
SINGLE FAMILY INVENTORY FALLS BELOW 39,000!
On pace for a big sales month in March.
PENDING SALES: 11,190 ( +565 from last week)
Pending Single Fam: 10,178 ( +540 from last week)
ACTIVE W/Contingency: 1,994 ( +152 from last week)
AWC Single Family: 1,822 ( +197 from last week)
CLOSED 3/16-3/22: 1,646 ( +196 from last week)
CLOSED Single Fam: 1,460 ( +134 from last week)
CLOSED MTD(3/22): 4,525 Through 3/22 of '08: 2,538
CLOSED MTD SF: 4,079 Through 3/22 of '08 : 2,141
ACTIVE LISTINGS: 48,460 ( -460 from last week)
ACTIVE SINGLE FAM: 38,854 ( -422 from last week)
Inventory continues to decline in the ARMLS; single family listings have fallen to below 39,000, which it has not been since at least the summer of 2007; that is as far back as I have kept the stats. Given that overall inventory at that time was around 55000, I think we can probably look back to 2006 for inventory levels like that-only this time, the number of listings are falling weekly, not rising. If we end up with 6500 single family sales in March, that would give us a 5.8 month supply of single family homes, going into our best 4-5 month selling season of the year. You do the math: how long do you think it will take us to reach equilbrium? I can see June or July if sales continue to rise at the rate they are. By the way, if you look at the statistics, you can see that single family sales are outperforming the general inventory levels, which is an excellent signal. Single family is the predominant abode, and the fact that it is improving faster than the general rate is all the more encouraging that we may be seeing the light at the end of the tunnel.
You likely heard about the February resale increase yesterday; we have known locally for weeks that February was much better. We can also predict that March is going to finish in excess of 6000 sales; it may top 7000. March last year finished with 4,262, which we have already surpassed. I would expect single family sales to post close to 6500 sales, maybe just short. This is a wholesale different animal than we were dealing with last year at this time.
This article talks about the sharp decline sales prices in these western markets, which I am sure are accurate. Prices are lower on average, I have no doubt; how couldn't they be, when homes in either dangerous or run down areas, or homes that are practically ruined, are being listed and sold for $10,000-$50,000? I went through a list in the MLS last night that showed a home in S. Phoenix listed for $13,000. This home is pending now. It was trashed and needs to be rehabbed, but there is the price: $13,000. How many homes sold at normal market prices does it take to make up for a home that probably sold for $100K plus to now sell for probably $10,000? Lets do the math....if the average price of a phoenix home in these price studies is at $175,000, then ten of them is theoretically $1,750,000. Now, this home that sold down on Chipman, listed for $13,000, and possibly under contract for $10,000, is part of that group. Well, now the cumulative value of the group of ten homes is $1,750,000-$165,000= $1,585,000. You still have to divide the cumulative dollar value by 10 though, don't you? So the average price is now been dragged down to $158,500. You can see how these trashed properties can overly affect the median and average and any other statistic one might use to measure price drops. Keep that in mind the next time you hear about prices falling through the floor. It takes a lot of homes maintaining all or even most of their value to prop up even a few of these throwaway properties. I would think by now that there are quite a few neighborhoods where their value is being maintained if the home is ready-to-live-in, and is not a foreclosure sale.
Other things of note this week:
New Active with Contingency contracts is just about to bust over 2,000; that is a very good milepost; at our very best last year, I don't think we hit around 1600...that was in June which is a seasonally active month for home sales. We might be approaching 3,000 by that time. The point with the active contingency is that it is growing, which means new contracts are coming in fast enough to replace those turning "pending". It is a general signal of recent rising activity, and with this number reaching new highs every week, we can point to the fact that demand is coming back strong.
Another note for those of you interested in land: Pending land sales, while too small of a sample size in MLS to be really accurate, rose by 16% in the last few weeks. Again, small sample size, but pendings had hovered in a similar range for quite a long time. I also had two parcels in the west valley clients of mine had intended to buy shot out from under us over the weekend. They were priced right, but someone came along and snatched them before we could. Most unfortunate for us, but it does look like there are some investors foraying out into the market again.
This has been a good month already, but this week could make or break the month. It is not technically the last week of the month, but a solid week here could put us in position to exceed that 7000 figure in sales for the month, which would put us in a very solid position going into our prime selling season.
chris
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