PENDINGS RISE; HIT 13,000!
AWC CONTRACTS CONTINUE TO SHOW GROWTH IN NEW DEMAND
PENDING SALES: 13,203 ( +1086 from last week)
PENDING Single Fam: 11,929 ( + 990 from last week)
Active With Contingency: 2,810 ( + 263 from last week)
AWC Single Fam: 2540 ( +242 from last week)
Closed 4/6-4/12/09: 1,359 ( -587 from last week)
Closed Single Fam: 1,234 ( -525 from last week)
Active Listings: 43,622 ( -1440 from last week)
Active Single Fam: 34,522 ( -1346 from last week)
APRIL CLOSED( MTD 4/12) 2,272 (Through 4/12/ last year : 1,398 )
CLOSED SINGLE FAM: 2052 (Through 4/12 last year: 1,195 )
March Closed as of 4/12: 2,278
March closed single Fam: 2,056
Active listings continue to nosedive as demand accelerates for homes listed in the Arizona Regional Multiple Listing Service. Given that we are on an identical pace at this time as we were in March, we can expect a similar number of closings; actually I am going to bet a little higher, as there are far more pendings and AWC contracts at this time than there were in March, so the trendline might be higher. We have also just had a holiday weekend, which typically slows some closings. Given March's finally tally of 7,636, that would extrapolate to a 5.7 month supply of overall listings, and using the final tally of 6,899 SF sales, exactly a 5 month supply of single family listings. The inventory number is falling precipitously, and you might see the inventory supply number fall even further by the end of April.
There is of course, the spectre of the foreclosure moratorium ending, and bringing with it a new wave of inventory; in talking to REO agents, I do believe it is coming. However, given our rising demand for homes, and rapidly depleting inventory, I don't think it will swamp the boat. An increase of 5000 homes looks like it would be absorbed in a month at the current rate of demand.
We are looking at a demand spike, no matter how you look at it. Let's look back to last year in the Archives. On April 15th, there were 6,861 pending sales, plus 1,251 AWC contracts. This years numbers are almost double the number of pendings, and more than double the AWC contracts. April sales finished around 4,880 last year, so can we expect 9000 sales in April this year? That remains to be seen; looking at the archives, the pendings will continue a seasonal up trend in April, but 9000 sales would be a big number. Its possible, but I am not predicting it yet. If we see 2000 + sales this week, I may change my mind, but I am thinking more like 8000.
You can look this up in the Archives, but here is where we were at this time last month. These numbers are predictive of trends, and as you can see we have had tremendous changes since March 15:
MLS STATS 3/09-3/15/09
ACTIVE LISTINGS FALL BELOW 49,000!PENDINGS, AWC STILL RISING SHARPLY
CLOSINGS BLOWING AWAY MARCH '08.
Sorry, I am a little late today with this, but it couldn't be helped.
PENDING: 10,625 ( +466 from last week)
PEND SINGLE FAM: 9,638 ( +411 from last week)
ACTIVE W/CONT: 1,842 ( +131 from last week)
AWC SINGLE FAM: 1,685 ( +123 from last week)
CLOSED 3/9-3/15 1,450 ( +170 from last week)
CLOSED SINGLE FAM: 1,324 ( +156 from last week)
CLOSED MTD (3/15) 2,804 March 15, 2008: 1,695
CLOSED SINGLE FAM MTD: 2,551 : 1,446
ACTIVE LISTINGS: 48,865
ACTIVE SINGLE FAM: 39,276
As you can see, there is a stark difference in pendings and AWC contracts-this usually predicts a higher build in sales even by the end of this month, but May looks like it will be a monster month for sales; maybe even enough to spark a general mood change amongst buyers. May could top 10000 sales, and inventory could fall to a 4 month supply. The supply number could be affected by foreclosure listings, but we don't know that for sure yet.
We are hearing the little shock waves all the through the media now, and that only helps the general psyche of Americans who are on the fence about buying a home. The $8000 tax credit should push them over.
I am very encouraged by the rapidity of the real estate housing recovery. There seems to be a lot of hemming and hawing about this with people who don't want to stick their neck out to far, but the fact is that buyers are turning out and buying again. June may bring us to a sea change in the psychology about the whole housing market, and it will be pretty simple to point at Arizona and see the change. I wish I had time to do the graphs I keep promising; I myself have gotten a lot busier in the last several weeks in the land market, which I am grateful for, but doing the charts is time-consuming and gets pushed down the priority list every week, unfortunately.
LAND MARKET NOTES:
I just want to mention for potential land investors out there that things are changing rapidly in our business too. We are not in full stage recovery yet; I actually see that not happening this year. But, if you are a land investor, and you want to make the most profitable investments, you can't wait until we are in recovery. I am not going to bring up any specific investments or areas, I have clients who are trying to buy right now, and no sense in making it more expensive for them to purchase properties by advertising the areas of interest, but there are some tremendous opportunities to buy high curb appeal properties at some bargain prices. We are talking about getting properties at pre-2000 pricing for land that has immediate end-user appeal. Again, you can contact me privately, and I will be happy to discuss the opportunities with you, but I won't muddy the water by discussing what these are. There are some excellent opportunities for small investors to make out on this with mid-five figure commitments, so don't feel like there are only opportunities for the big guys, its just not true. If you are interested in what is going on, and have some comfort in holding for 2-3 years to make a nice return, call me and we can discuss what opportunities abound. These kind of prices are already changing as the housing market continues to strengthen, and as a wise old investor once told me, you make the money on the purchase as much as the sale. Now is the best time to cut a great deal on investment land if you have the stomach for putting the cash into it.
Chris Just
Just Land Consultants
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