Pendings slide, AWC up again
Sales to Top 8000 for July, less than June
Inventory falls slightly again
PENDING: 12,842 ( -97 from last week)
Pending Single Fam: 11,431 ( -81 from last week)
AWC: 5,690 ( +95 from last week)
AWC Single Fam: 5,057 ( +71 from last week)
Closed 7/20-7/26 : 1,853 ( -165 from last week)
Closed Single Fam: 1,647 ( -126 from last week)
Active Listings: 31,695 ( -97 from last week)
Active Single Fam: 24,350 (-109 from last week)
Closed MTD 7/26: 6,362
Closed MTD Single Fam: 5,607
The numbers don't tell us a whole lot as we get close to closing out July. The number of pendings seems to have done its normal peak in June, signifying that we have likely reached our potential best selling range. July is shaping up to be seasonally in line with what normally happens after June. This implies that these are not just recovery numbers that will continue to rise, but are the actual market numbers. This is good and bad; this means that we won't have continued growth in sales, which in a recovery period would be very nice to see; but it also means that because they are not growth numbers, these are probably long term sustainable levels of sales, which are very healthy numbers. We might see things kick up a bit in September, but this is our selling range here, between 8000 and 10000 sales a month.
Conservatively, you might say we will only achieve another 1800 sales this month, which would put us over 8000. This is the low end, as statistically the last week is always stronger than this week, for example. So we can expect that at the minimum. A more realistic number may approach 2500, which would take us to approaching 9000 sales. I would consider that to be a more accurate assessment of where we are going to finish. I don't see great potential for climbing over 9000, but its possible.
Going back to the pending numbers, we seem to have hit our ceiling for that statistic, and have retrenched a little. I don't know if that is because homes are now selling quicker, with less hangups, as we aren't losing a lot in the way of overall sales by the end of the month, or if the short sale escrows are instead being placed in AWC, which is still rising. There are certainly sufficient numbers of pending sales, but the slight retrenchment troubled me for a while. We have been getting good consistent weekly sales now, even if those numbers are off their highs, so it be a little overanalysis on my part.
Inventory drops seems to have leveled off. We have reached a point where the excess has been mostly sold off, and we are now at a level of three or so months worth of homes, which is a normal market that will cause small price upticks. As I had earlier posted, national stats have now shown a slight price increase for U.S. homes, which is an indicator that we have reached a bottom in prices as well as in the oversupply of inventory. We also had the surprise announcement of the increase in new home sales at a pretty solid 11%, which will eventually spur consumer confidence, although consumer confidence lagged in July. This is somewhat of a lagging indicator and I expect to see that number better in the later summer. We do have the difficulty of what looks like a jobless recovery, so we have to see how that plays out.
It was a good solid week for sales, and we should have an acceptable level of sales in July. It would be nice to see continued growth in demand, but demand at this level is acceptable, and will continue to push prices upwards. The bogeyman still out there is how long the supply of foreclosure homes holds out. We know they are out there, and potentially more may come available.
Off point a little is the announcement of this anti-deficiency law that Arizona passed, essentially bypassing consumer protections from banks should they foreclose on a home you have not lived in. This law allows them to pursue you for the deficiency, which would be devastating for so many people. This was not a well-thought plan by the legislature, and was done at the behest of bank lobbyists. The big problem with it is the law of unintended consequences- their purpose, they say, is to prevent "investors" from not paying them back simply because its upside down, so they have to live in the property for six months in order for it to be classified as a residential home. The problem is that these kind of investors are few and far between, and what is really far more common is the individual with the second home, or a vacation home, or the homeowner who got caught in the middle of buying a new home, and couldn't get theirs sold before the market went south. The banks, of course, realize this, but as long as they can get the law rewritten so they can get their nose back into the trough for as much as they can, they don't care. Its a travesty that our legislature, which is supposed to look out for the consumer, is so clearly in the banks' pockets. This is especially disconcerting, as they claim its not retroactive, but anybody who is already in a home who is only starting to lose it is subject- in fact, the bank can hold off foreclosure until post september 30, and make those people subject. Call your legislator, and ask him or her if they support this noxious bill. They will get the message. Personal responsibility is one thing, but to cause the personal ruin of tens of thousands of people in this state is not in our best interests.
I will get off my soapbox now, but have a great week.
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