**JULY SALES TOP 9000**
Active Listings Drop again.
National Housing News turns positive.
PENDING SALES: 12,028 ( -814 from last week)
Pending Sing. Fam: 10,727 ( -704 from last week)
AWC: 5,701 ( +11 from last week)
AWC Sing. Fam: 5,076 ( +19 from last week)
Closed Escrows: 2,774 ( +921 from last week)
Closed Single Fam: 2,437 ( +790 from last week)
Active Listings: 31,331 ( -364 from last week)
Active Single Fam: 24,043 ( -307 from last week)
CLOSED IN JULY: 9,096
Closed Single Fam: 7,987
July finished up with just enough kick to top 9000 sales for the month; this figure is less than June's Sales of approx 9300, but then it always is. Still, July was a very good month for inventory reduction and sales increases, as inventory has continued to fall, although at a slower pace than it had. Inventory is not going to fall to zero, so we are starting to reach the bottom of inventory's elasticity, especially given the current economic realities. We are doing very well considering the challenges. We are now at 3.01 months of single family inventory, and and about 3.4 months overall. This is a very sustainable level; it is probably the appropriate level that will cause home prices to bounce back to what I would refer to as natural levels. Median prices remained relatively stable from June to July, with the admittedly small sample size of August showing a slight uptick already. The direction of prices is going to go up, of that we can be sure. The prices are currently deflated, but this condition will not last forever as psychology improves with the positive news coming from seemingly every corner of the housing industry. What I can point out price wise is that dollar volume for single family sales outstripped June's total by $7,500,000. This might seem insignificant, except that were more than 250 more homes sold in June than July, and this translates to about an average $12,000 per home increase in price. This is not the median, but the average. This shows that prices are getting better, even as the median continues to be held down by the sheer number of low end homes being sold. There are even seems to be a little more movement in the million dollar market, as 91 homes sold in July at $1,000,000 plus. This is about a 1/3 increase over just a few months ago.
Regarding current inventory, I suspect we may see a little spike coming up as it seems lenders have been holding back foreclosures to take advantage of a new state law that is supposed to go in effect in September that would allow them to pursue the owners for a deficiency judgment. This law was written poorly in the middle of the stream, and a pretty big outcry has forced even its sponsor (Pierce, Prescott, AZ) to recant it, and it is likely going to be repealed. Its possible the lenders were waiting on this law to go into effect, so there might be a spurt of new actives coming on line if they decide to accelerate the foreclosure process, as there would be no advantage to them to hold off any longer. I am not positive of this effect, but it seems reasonable that there will be some spike in inventory. Of course, demand may dispose of that quickly, as it has been doing with foreclosures all year, but we don't know how big a wave it will be, nor do we know how well demand will hold up.
I don't normally like to give a reading list of news articles, but working this many into a coherent paragraph would require more time than I have today. So here are several articles from around the web that are starting to change the psychology around the housing market. They are wide-ranging and realistic, and I think they can start to be believed as more than cheerleading for the industry. Especially the Case-Schiller data- they are like listening to the resigned-to-a-nuclear-war BBC announcer in the sixties with the doomsday clock ticking in the background normally- pessimism and destruction on its way, all the time. If they are acknowledging better numbers, we have likely bumped bottom. Here is the list, should you care to follow the articles:
Pending Home Sales Rise: CNBC
Case Schiller Reports Reversing: Realty Times
Local: Builders report positive signs: AZ Republic
Foreclosures Stabilize in Arizona: AZ Republic
Builders find success with smaller homes: KTAR
Signs of Hope in California Housing: CNBC
Now, you may not want to read all of these, but the point really is that there seems to be some really good news out there developing in the housing industry, and it is about time. The news is there, which is critical to turning around the psychology of malaise that the industry has suffered through for the last several years. We are hoping for a strong month of August, and we will need to see if pendings pop back up after their sharp end of the month drawdown in July.
It was a very good month of July, and a very good week, as the positive news seems to be tumbling out all over. Hopefully it will continue.
chris
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