STATISTICS SHOW MARKET STEADY
Pending Sales Climb Slightly, AWC too.
Listings falling slightly again.
PENDING SALES: 12,792 ( +140 from last week)
Pending Single Fam: 11,370 ( +134 from last week)
AWC Contracts: 6,130 (+117 from last week)
AWC Single Fam: 5,432 (+102 from last week)
CLOSED (by 8/23) 1,683 ( +19 from last week)
Closed SFam: 1,477 ( -2 from last week)
Active Listings: 31,268 ( -48 from last week)
Active Single Fam: 24,001 ( -77 from last week)
CLOSED MTD : 4,983
Closed SFam 4,390
There is not a lot to be gleaned this week, other than the market continues to perform at a sustainable pace. Listings are falling slightly, but not with real momentum. The number of weekly sales is very consistent with last week. It is a solid number for a middle week as well. There appears to be a slight amount of growth to pending sales, as it has continued to climb in recent weeks, albeit at a fairly modest pace. I don't think we will see a big breakout occurring in pending sales, as the recovery is likely to be a modest one. We are seeing continuing growth in the AWC category, which as we have said is not all for the best. They are contingent sales, no doubt, but 5400 of the 6000+ AWC contracts are short sales. Short sales take several more months to sell, therefore they tend up to pile up in number. Their growth continues to take away from actual sales in that the number of short sales waiting to be approved is now more than 50% of the sales we have each month. If they were to close on a normal basis, we would be seeing at least a 10% increase each month. There were only 1384 short sales in July, a statistic dwarfed by the number visible in AWC. Using our simple realtor math, we can see that it takes about 3.9 months for short sale inventory to go from AWC to Closed. If that buyer had not purchased a short sale, the closing would have happened in probably no more than 60 days, and as we know, almost all would occur within 45 days. Short sales effectively reduce the number of monthly sales, as sales are delayed to subsequent months- several months. These are only the contracts that are visible. As i have pointed out, not all accepted contracts by the seller go into Active with Contingency- some are left as Active in order to attract more buyers. It is difficult to measure this, so that we don't look biased towards optimism of the number of pending contracts, we assume that all short sale contracts are listed as AWC- this is not the case, but better to be wrong short than wrong long, or people accuse you of cooking the numbers to paint a rosy picture.
These numbers, should they stay in this range, are very sustainable. Now, we can expect fall off coming in November through February, as is usual here, but we can also expect a stronger recovery of demand come next March. We may have a better 4th quarter than expected, we don't know for sure. I expect it will be better than last year. We are on a good pace this year, and no matter what any news organization says, we have done well to recover from where we were. We can't have it all better in one night; wounds don't heal, and there is no lucky star to wish upon to make it all better over night. The reality is we are almost at full recovery; it is not perfect, prices have not bounced back to what everyone paid for their homes, but we are fortunate people are buying, and that first time buyers are enthusiastically entering the market, and finding affordable product. There is definitely more good than bad happening right now, and while this depends on the recovery of our economy, housing is doing as well as any of us should be hoping right now. These are real numbers, not projected what-ifs that we hear from so many negative sources.
Here are some other real numbers you never hear about. We will pass the number of total sales in 2008 by Wednesday of this week. We are currently 269 sales short of the 59,237 sales posted in 2008. We are in August, which means we have done that in what will essentially be 7/12 months. We can expect another 4000 or so sales in August, so we will have obliterated the number by 4000 in 2/3's of the time. We are currently ahead of the same point in time last year by 22,580 sales.
Here's another one. There have been 10,028 less listings put on the market this year than there was by the same point last year. This is the fact this year, despite the foreclosure crush the media talks about.
If you are still feeling negative about where the housing market is headed, here are a few other items that I rarely mention because the concept is a little broad for short term analysis. These are numbers pulled straight from MLS, so if you disagree with me about a recovery in the housing market, consider these numbers as well.
-The median new list price has been climbing for three straight months, and generally climbing for six months.
-The dollar volume of sold listings has exceeded the same months last year 3 out of the past 4 months, will probably be 4 of the last 5 by the end of August.
-The number of new listings each month this year is less than last year every month this year except for March.
-The number of sales has exceeded every month last year by a minimum of 54.9%.
Things as I see them are heading in the right direction, and there are no guarantees that we won't see some bumps, it is just about time for some optimism about the market to take hold. Ultimately, without optimism by consumers, the market will not recover. This 24 news cycle has a tendency to always find the negative no matter how positive the numbers coming out are, and they just continually feed the pessimism. As I wrote that last sentence, I thought "I better back this statement up." So, I decided to look for a news article that supported what I said. I didn't have to go far. It was a headline. Here is a perfect example of reporting good news, but spinning it negative. The article quotes the most bearish of housing analysts, Robert Shiller of the Case-Shiller index, just falling over himself about this massive increase in price, but they are already begging the question of why haven't we won the next victory, even though that battle has yet to be fought. I do get frustrated by the way news is reported, and I have sworn off watching about 90% of the financial news that I used to watch, only really tuning in to Fox Business Channel occasionally, for mostly the scenery.
You can only take so much of this being dragged one way by the hard news, and then being dragged the other way by their manipulation of your fears in order to get you to tune in again for the next death-defying, cliff-hanging, economy collapsing statistic that is going to show up and spell either doom for us, or allow us to sleep safely in our beds-for this night at least. Their methods remind of watching the old NWA wrestling when I was a kid. They never left a show without a bad guy entering stage left, pounding the hero with a chair or something, starting a melee as the camera cut out and the show ended. As kids we just died waiting for next week's show to find out what happened when the cameras wer off. The modern media has taken this to a global scale, and we all sit around waiting for them to tell us what is happening that we can't see. The financial channels, when they were there mostly to sell us on investing in wall street, basically operating the same as trackside television does for horse racing, encouraging betting, we at least knew what their purpose was. Now, it is either at least more insidious, and certainly more subtle, as their own real quest is for ratings has them tapping in to the global soap opera of Life On This Planet, and using the flow of really useless information to most of us, to put us in that same mindframe as the kids on the couch watching saturday night wrestling: don't miss the next show, because its going to be big, Big BIG!!
Don't buy into the minute by minute ups and downs. We are all interested where things are going, but news is no longer just about reporting news, its about them needing to hook more people, and a few thousand people to financial channels is more significant than we realize. Watch the larger trends, watch out for the "yeah, buts" reports. We are likely to see a lot of them. Sorry about the rant, but I have been getting so frustrated with the positive reports followed up by the "could happens". Have a great week.
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