PENDINGS FLATTEN, AWC RISES SHARPLY
SALES AHEAD OF APRIL PACE B?Y 5%
ACTIVE LISTINGS STILL FALLING, BRACE FOR JUNE INFLUX
PENDING SALES: 13,866 ( +9 from last week)
Pending Single Fam: 12,445 ( -7 from last week)
Active W/Contingency: 4,406 ( +336 from last week)
AWC Single Fam: 3,996 ( +314 from last week)
Closed 5/11/-5/17/09 2,127 ( +449 from last week)
Closed Single Fam: 1902 ( +411 from last week)
ACTIVE LISTINGS: 36,571 ( -1247 from last week)
Active Single Fam: 28,291 ( -1083 from last week)
CLOSED MTD (5/17/09) 4,313 (4/17/09: 4,139)
CLOSED MTD SIN. Fam. 3,848
The data was a little mixed this past week; we may have seen the peak of pending sales, as it seems to have lost its upward momentum. This is in contrast to the substantial increase in the AWC numbers, which rose sharply to new highs. June is likely to be the big sales month of the year, so it is not surprising that there are a lot of new contracts that we will see close in June. I think it is highly likely that we will see overall sales in the 10,000's in June, but we are not likely to reach that milestone in May. May is ahead of April as contrasted above, and given the high number of weekend days we have already had in May, I may be underestimating what the final tally may be a little for this month. I think we will reach into the 9000's, however.
The weekly sales were quite strong; anytime we breach 2000 is a good week. This usually foreshadows that the last week of the month, when a great deal of transactions close, will be very strong. It should push us into the 9000's easily. There are 10 weekend days in May, which can affect the number of sales, but I think we will see it made up in the end.
Inventory continues to slide rapidly, as continued foreclosures make homes very affordable. We also have the tax credit for first time home buyers that is giving a great incentive to buyers to make a purchase, along with low interest rates. Word came out yesterday that the tax credit can now be "monetized" for close of escrow-essentially, the buyer doesn't have to wait to file taxes to get it, they will receive a credit at close, and the lending inst. will be reimbursed by the government. This is how I understand it. It should provide some downpayment money for buyers. This ends in November, so we are likely to see a rush on this by the end of summer to utilize this.
We are going to be at a 3-4 month supply of listings on the market by the end of the month. We may see 9500 closings, and inventory is likely to be around 34000. There is word out there that there is an abundance of listings in the higher end market, while there is actually a tight supply of single family homes in good solid neighborhoods. Jumbo loans are still difficult to get, and there is more dollar risk in these high end homes, so we are seeing that segment of the market stick a little.
I keep hearing word of many new foreclosures coming on the market in June, and I think that is likely; however, that number would have to be astronomical to change the momentum of the market. We are absorbing excess inventory at 1000+ per week, and the number of new listings fell sharply in April. There are relatively a low number of new listings in May so far, but that could change by the end of the month. Even if June were to see a big influx, we might simply remain at the inventory level we are at right now. That is a sustainable number; to put it another way, it is not inventory keeping prices down, it is the kind of homes that are selling- foreclosures, short sales, and lower-end homes that first time homebuyers can qualify for.
We are moving in the right direction in housing in Arizona, and after May and June sales occur, we are going to see the market in a much different light. I think even builders are going to start seeing opportunities by then, as they have to look a year or two in advance. We seem to have our feet planted on much firmer ground as of late.
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