Single Family Inventory Falls into 24K's.
Sales likely to top 9000
PENDING: 13,470 ( -89 from last week)
Pending s. fam: 11,995 ( -47 from last week)
AWC: 5,425 ( +23 from last week)
AWC Sin. Fam: 4,860 ( -5 from last week)
Closed Weekly: 2,033 ( -61 from last week) Closed Single Fam: 1,796 ( -83 from last week)
Active Listings: 32,517 ( -299 from last week)
Active Sing.Fam: 24,923 ( -275 from last week)
CLOSED MTD(6/28): 7,648
CLOSED Single Fam: 6,795
As of last night, pendings were higher than last week, but end of month sales are starting to come in, and the pendings are dropping off the board as sales increase.
I am short on time for commentary today, but I will just say we seem to still be heading in the right direction. Inventory is still falling, although at a slower pace as we are now closer to equilibrium in the market. Pending sales are rising, denoting continuing depth in buyer activity, although AWC seem to be reaching its potential. It is likely that we are going to top out between 9000 to 10,000 sales per month over the summer-it is a highly acceptable number, but these are not the boom numbers of 2005, nor should they be. The important thing, these are numbers we could live with long term, and for that we all should be grateful. Housing is going to become an economic driver for us again, as over supply and demand problems are going to be overshadowed by our long term growth. This creates a situation in which builders can start seeing a market for their product again. We are not without problems; certainly there are too many foreclosures as part of the inventory, and unfortunately, there are far too many abandoned or uncared for homes-unless you are a house flipper, for those people, it is an opportunity.
A perfect example of this mixed bag is this article that came out in the AZ Republic about Maricopa. The town, despite being a poster child for everything that went wrong in the boom, is now experiencing somewhat of a renaissance. Inventory has fallen sharply, sales are strong, and new commercial is going in. Again, its not the boom, but its sustainable growth of the kind that still allows families to invest in a home and create a nice lifestyle for themselves. Yes, there are foreclosures, yes there are empty homes still, but things are better, even in the midst of this massive economic downturn, and they are thriving. This is one of the success stories that I discussed would come about eventually-we will see good news here and there, but conventional wisdom will write it off as an isolated case, until BOOM! one day there will be an article in the paper about how prices are getting too high for the average mcdonalds worker to buy a home. This is the cycle of real estate, and while the most recent one was one of the severest in our history, it follows the same pattern.
We seem to have escaped June without the Tsunami of foreclosures hitting us, but we are reaching what would have to be considered our potential for sales in the current economic cycle. Sales are flattening out at these levels. It is a good solid number of course; in June 2005, as of June 28th, there were 6927 single family sales; compare that to the 6795 single family sales we posted in the same amount of days, and we can see that we are running at a pretty good clip. Obviously, overall value of sales is drastically less, which apparently is how everyone wants to measure whether we are in a good or bad market. We attract companies, jobs, and young talent with families in that order because of the affordability of our housing here, and our long term growth is far superior at these prices than they were at the ridiculous prices of 2005. There is a lot of pain in this price deflation no doubt, but the foundation of our future growth is being laid down. We are not a high tech state yet, so prices need to be in line with the kind of jobs we can expect. It is quite apparent now that we have home prices in that range, we have a large buying class again. It is something that builders will do well to remember.
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