Pendings and AWC Rise
August Finishes over 8,000 Closings
Active listings flat; inventory has probably reached low point for '09.
PENDING: 12,595 ( +404 from last week)
Pending SF: 11,202 ( +328 from last week)
AWC: 6,363 ( +279 from last week)
AWC SF: 5,641 ( +256 from last week)
CLOSED: 1,947 ( -102 from last week)
Closed SF: 1,717 ( -89 from last week)
Active: 31,110 ( +99 from last week)
Active SF: 23,876 ( +51 from last week)
CLOSED SALES: AUGUST 2009: 8,042
Closed Single Family Aug '09: 7,070
These stats included a holiday weekend, which tend to throw stats off somewhat. Typically, less showings and less sales occur. We do see that pendings rose, along with AWC. Short sale listings are a very large contributor to overall sales right now. Out of 1,031 new AWC contracts since 8/31/09, 732 are short sales. Interestingly though, only 532 of the 2523 homes that went "Pending" in that same time frame are listed as short sales. That is a very telling statistic that shows why AWC has grown so much. These homes don't tend to go pending very quickly, nor close quickly, and linger in AWC for months. Only 535 of the closings that have occurred since then are listed as short sale closings. With so many short sale listings, we can see how this is beginning to "stretch out" sales that should already be occurring. Banks need to stop worrying about whether someone did a dime under the foyer plant, and start loosening up these closings. It doesn't really do a lot of good to let them languish while they thoroughly investigate the finances of the seller. There is no percentage in that for them, they are only stretching their pain out.
August did finish over 8000 sales. I saw an article in the paper about how few sales occurred in August, using yet another data supplier. The article did not give any recent historical data that made any sense, saying how sales were down some percentage. Yes, August was down compared to July, but that is expected. However, the numbers given were just misleading. One, MLS data, while the gold standard for number of sales because of its consistent reporting, reports low. There are transactions outside of MLS- these will only show up in the county recordings. I am not concerned with those sales, as they don't significantly change the totals, and they aren't reported consistently. Statististics are worthless if you don't have other results with which to compare. I use MLS stats as they are readily available, typify the general market, and are updated daily. They report a little low; and there are not going to be a negative amount of recordings-we know this, so this data in the article they get from random people showing barely 7000 sales for the month is not very credible. So you come to the conclusion that they are picking out zip codes, and using only those zip codes for sales. This is just not relevant as so much of our home sales occur in places like Wittmann, Buckeye, Maricopa, and Casa Grande. To start suppressing the numbers by limiting the area reported after long reporting the whole system unfairly reports the real result. August was not the best month this year; July was superior, as was June. August is not the best month of the summer per prior statistics, so this result was not unexpected. We reached 8000 sales which was very good given last year. We reduced the number of listings on the market, and prices maintained. It was a decent month, despite the searching out of negative news by the media looking to pull eyes through fear.
I do suspect that we have probably reached the low ebb for inventory this year. We do expect some lenders to quicken the foreclosure process on many homes that they were holding off on due to the insidious deficiency law they tried to sneak through. It was repealed, and now they have no reason to delay this process. I do think we will probably see a w-shaped inventory report from 2009 through 2010. There eventually has to be more inventory. And as we are going to be leaving our prime sales season, we could see that inventory rise in October. Traditional homeowners tend to slow down listing property going into the winter months here, but we will see more non-traditional listings hit the market from banks. I don't see a doomsday increase, but we are likely to see some. The counter to this argument all year has been that traditional homeowners are staying put, as they can't sell for a profit, and they can't re-qualify for a better home, so their homes are not being made available as inventory, so the supply of bank assets is being offset by the decrease in traditional listings. Its difficult to say whether that relationship will continue, but inventory shrunk markedly this year, despite all of the foreclosures.
One last thing I wanted to mention was that I was in Florence yesterday at Merrill Ranch at Anthem. There is a beautiful golf course down there called Poston Butte, and the summer rate was too good to pass up. I hadn't been there in a year, but what was surprising to me was how many new homes were being built down there as you work your way through the course. It is a fairly new course, and community, but to see as many new homes under construction in the far reaches of the valley was very telling to me. They could not continue to build these homes if they were not selling them. The time of mass spec home production is behind us, and there was a lot of activity, and they were even stuccoing homes yesterday. As a land broker, this was very reassuring to me.
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