MLS STATS 6/29-7/5/09

***JUNE CLOSINGS: 9,359***
Pendings Fall in first week of July
AWC still rising slowly
Listings Fall again to 31K's
**2.95 months of single family inventory**


PENDING: 12,870 ( -600 from last week)
Pending Single Fam: 11,457 ( -538 from last week)

AWC: 5,466 ( +43 from last week)
AWC Single Fam: 4,860 ( +32 from last week)

Closed 6/29-7/5/09: 2,518 ( +485 from last week)
Closed Single Fam: 2,219 ( +423 from last week)

Active Listings: 31,978 ( -539 from last week)
Active Single Fam: 24,533 ( -390 from last week)

CLOSED JUNE '09: 9,359 ( +123 from May '09)
Closed Single Fam: 8,311 (+68 from May'09)

June finished up decently enough to surpass May's sales, giving us our best month of the year so far. It was a slight rise, but the numbers very much reinforce that we are in a period of recovery in housing. July will likely be slightly lower, but still strong, as will August. September last year was our best month of 2008, so we are likely to see some continuing strength in the market for at least the next several months, and we are likely to surpass all of 2008 sales in the middle of August!

Interestingly, AWC contracts continue to rise-not sharply, but it is still up. It is a predictor, but I don't think it is an accurate predictor of what July sales might be. I don't expect July to surpass June's, but we don't know that for sure. Our pendings are a little light, as the end of the month sales take effect. We will see if the number bounces back next week; if it doesn't, I would expect we will see a sales range in the 8K's in July.

We are still seeing inventory drop, which given the dire predictions for June listings, is a very positive sign. The drop isn't as pronounced now, as we continually work with smaller numbers, but smaller inventory gives builders cause to start thinking about building and competing again with resale homes. If you do the math on the single family figures above, you will find the 2.95 month of single family inventory. 24,533 divided by the 8,311 sales = 2.95 months. This is a significant milestone. It is not likely to stay under three months of inventory, but it is an important milestone when considering whether we are in recovery or not.

One of the most interesting examples of this inventory shakeout that I have seen is in Maricopa. The fact is, Maricopa is one of the hardest hit areas for foreclosures due to it rapid run up in prices, and its relative remoteness from places of employment. The price was not justifiable, and many people who overpaid chose to walk away. But, at the right price, this community is very much in demand. Here is the current situation. There are 406 active single family listings in Maricopa- not overly high for the size of the community it has become. There are 444 pending single family sales in Maricopa! If you bring in the AWC contracts, which I am sure contain a large contingent of short sale contracts that languish in AWC for a while, there are 688 homes under contract! This looks to be a relatively new rush to Maricopa, as there were only 273 single family homes sold in June-this bears watching to see if these homes start closing at a more rapid rate, but 273 homes sales give active listings of 444 is a pretty strong number. I am quite sure many listings that are in maricopa aren't listed as maricopa, as they are rural, but this area looks like a builder opportunity in the next year. It is good to see demand back for Pinal County.

Not to belabor the point, but the idea that we are currently working with less than 3 months worth of inventory is mind boggling considering where we started the year. Yes the dollar totals are bad comparatively to other years, but we knew that-what is important that new buyers are feeling confident enough to buy, and it is driving the market forward. We still have excellent interest rates, value in the pricing across a broad spectrum of housing, and financing is getting easier. Obviously, we have employment issues in the US, but despite that, our housing situation continues to improve. Its not perfect, but its improving, at least locally. Less than three months of inventory is the basis of a formula for home prices going up, which they did in June. It is a very broad measure, but the MLS statistic shows the median sale price went from $119,700 in May, to $125,000 in June. It is not a detailed analysis, but that is a sharp gain. Even more hopeful is that single family median prices went from $121,500 to $130,000! That is a sign that demand is starting to push prices.

There are many reasons for optimism that the market is finally turning, and the fact that we have a fairly low supply and and prices are rising fairly sharply should tell you something. We have a lot of economic challenges, without a doubt, but at the same time, for a metro area that is highly reliant on the real estate industry, we can point to our biggest economic and employment engine and say its getting cranked up again. We might be 6 months away from the news feeling good about it, but the statistics don't lie- we are selling homes at a good clip, and we are starting to sell homes at higher prices. A couple of very important conditions when considering the direction of our housing market.