Inventory Rises Slightly Again
Pendings, AWC both Climb
Inventory likely is rise slightly through the fall.
PENDING: 12,922 ( +327 from last week)
Pending SF: 11,467 ( +265 from last week)
AWC: 6,521 ( +158 from last week)
AWC SF: 5,774 ( +133 from last week)
CLOSED: 1,298 ( -649 from last week)
Closed SF: 1,147 ( -570 from last week)
ACTIVE: 31,226 ( +116 from last week)
Active SF: 24,011 ( +135 from last week)
CLOSED MTD: 2,393
Closed SF MTD: 2,102
Inventory rose just a bit for the second time in September, signifying an increasing number of new listings. Single family listings rose more than overall listings, suggesting that condo sales are perhaps starting to show some strength. A look inside the numbers shows that new listings increase in September and October. This is likely the case again, as it is a seasonal issue. Of the 2,290 new listings in the last week, 654 were lender owned, which was an increase of 222. There were 570 more listings put on the market this week than last, so that is going to have an effect. August was a much slower month for lender-owned properties going on the market, as it appears that lenders were perhaps holding back foreclosures waiting for the new law regarding deficiencies that they tried to sneak through the legislature. This failed, so we may see an increasing number of lender listings come on the market. Comparatively, there were about 1000 more listings put on the market this week in September than there were in the similar week of August '09. Of these,
665 were not lender-owned or short sale. A very large share of our inventory is still bank-owned and short sale, which contributes to the flat pricing we are experiencing. We may see more lender owned homes on the market in the next quarter, due to the aforementioned repeal of the deficiency legislation. The lenders don't have as much reason to forestall foreclosures now, as that law would have benefited them tremendously and unfairly. We will watch the inventory trends for the next few weeks to see what happens.
The positive side is that pendings are still rising, which foreshadows decent sales at the end of this month, and possibly October. The month has started off slow, I would say, but we won't know until the end of September. It certainly will be better than last year, but is not likely to be the best month of 2009. The AWC count also continues to rise, as more and more of potential sales are being delayed as they are short sale properties. This fact may mean that we see a fair amount of closings stretch out into the quieter months of 4th Quarter. I think we are going to see this trend continue, as so much of the available inventory is short sale. Sales are taking longer to go through, so it appears that sales activity is slower than it really is. For example, this same week in 2008, the total number of AWC contracts was only 1,048. It has grown sixfold due to short sale contracts. Those are a large number of contracts that could have already closed, but sit in purgatory waiting for lenders to do something. They are being their own worst enemy here.
It is encouraging to see pendings rising still, as it does denote strength, but we are also likely to see some inventory gains, as we go through the slower winter period. The normal pattern is that normal sellers also take a break in the fall, putting less inventory up for sale after September, but with lender-driven properties being such a large part of the inventory, we will have to wait and see.
I have some things that require my immediate attention, so I am going to cut analysis short today. I will try to make up for it next week.
chris
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