ACTIVE LISTINGS DROP SHARPLY AGAIN
PENDINGS RISE SLOWER, AWC TOP 3000.
Outpacing 2008 sales YTD by 60%
PENDING: 13,704 ( +501 from last week)
Pending Single Fam: 12,374 ( +445 from last week)
Active W/Contingency: 3,098 ( +288 from last week)
AWC Single Family: 2,807 ( +267 from last week)
CLOSED: 1,826 ( +467 from last week)
Closed Single Fam: 1,636 ( +402 from last week)
ACTIVE LISTINGS: 42,131 ( -1491 from last week)
Active Single Family: 33,190 (-1332 from last week)
CLOSED MTD (4/19) 4,145 (4/19/08: 2461 Closed)
Closed Single Fam: 3,733 (4/19/08: 2096 Closed)
SALES PACE COMPARISON: 03/19/09: Total 3,971 Single Fam: 3,573
YEAR TO DATE: 21,886 CLOSED 4/19/2008: 13,039 CLOSED
Inventory is still sliding at a rapid pace in the ARMLS coverage area; if we sell the same amount of Single Family homes in April that we did in March, then we have 4.8 months of supply available. Overall inventory is slightly above that, but not much. Obviously, much of the inventory that is selling now is Bank-owned and is being sold to investors, so the sales rate is artificially high, and the prices are artificially low. The number of sales is probably going to peter off as the lowest price inventory dissipates, but it is also probable that we will be in somewhat of a recovery by the time this happens, and first time homebuyers will be back in the market buying the next tier of pricing, which will include many of the homes that are selling now, rehabbed, and re-marketed. My guess is that most investors will not choose to re-market these for a year, due to short-term versus long-term capital gains taxes, but some will go back on the market as ready to live in properties which will command a higher price. Some will be converted to rentals, which there is a growing rental class due to obvious reasons. Either way, they are off the market, and we don't seem to have a lot of inventory flowing back on the market yet. I do expect more foreclosures to hit the market, but at this point, we would have to see 5000 a month for an extended period of time to do anything but meet the current sharply rising demand. As the economic dip starts to flatten, and consumers feel a little more secure, you will see more people taking advantage of this homebuyer tax credit.
One of the exciting things we are seeing is that demand numbers continue to rise. More AWC contracts, more pending contracts, higher sales in the middle months-these are all indicative of us going into the seasonal high-demand period, and with relatively very little excess inventory. If there are people who are in need of buying a home, they simply don't have the choices that they did 3 months ago. Relative scarcity will drive prices back up, although price increases are going to come in fits and starts this time, as I do believe that we are going to have this strong period of sales, and a short period of flat sales as people adjust to the new reality that REO pricing is gone. The fact that we have topped 3000 AWC contracts shows that demand is rising, and hopefully this will continue through the summer.
My prediction is that we will probably exceed March's sales figures, although not by a lot. The pace is pretty similar, and March has an extra day as well. The last week will determine, but right now, I think we can expect 7600-7900 sales in April. I hope I am low with that-I don't mind being too conservative on my estimates.
It is quite apparent that we are bl0wing away the pacing of 2008; as I said, I doubt that pace will hold up- 94500 sales would be a lot to ask given the economy-but we should continue to see good sales through the summer. I do think we will finish upwards of 70000 sales this year-that's probably too low, I will go out on a limb and say 80,000.
Land Market Notes: I have been encountering more instances where we have been competing with other investors for good land deals in the last week. We have lost a few deals to other parties' contracts being better, and have found ourselves in a bidding competition on others. These are healthy signs, but I do think that land investors have an opportunity to find some quality properties now at exceptional pricing. there are some quality deals available for the small investor out there, but you still have to hunt for them.
Have a great week!
chris
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