Pendings Fall, Sales Rise
Active Rise slightly, AWC start to fall.
Holiday Season variables start to show up.
PENDING: 11,845 ( -277 from last week)
Pending SFam: 10,380 ( -250 from last week)
AWC : 6,384 ( -68 from last week)
AWC Sfam: 5,603 ( -87 from last week)
Closed: 1,878 (+366 from last week)
Closed Sfam: 1,622 (+329 from last week)
Active: 33,631 ( +163 from last week)
Active Sfam: 26,096 ( +134 from last week)
Closed MTD: 4,842
Closed Sfam: 4,180
I am not going to delve too deep into the numbers today; things are clicking along normally for the season. Sales are fairly strong, having risen again, boding well for the end of the month sales to come close to matching a very good October. We are actually ahead of October's pace 4727- 4842 at the same date in the month. I think it will even out though, as we lose two days here this week, and one at the end of the month. We are seeing the decline of pendings, as many buyers aren't as interested in timing up closings for the Holiday season. We are likely to see a light number of pendings until they start to rise in February again. Still, November looks excellent, and we are going to have a strong 2009 in terms of sales. In terms of pricing, well, not so much- but we are seeing consistent improvement, and steadying demand. Hopefully, the strong progress of first time homebuyers, coupled with the tax incentive for move-up buyers, starts to have an effect in slightly higher-priced homes.
I would also mention that nationally we have seen some steadying of home prices per this article at CNBC. Home prices rising this many months in a row means something. We are not in a strong position yet, but we are improving, and that is excellent news.
Have a very happy Thanksgiving Holiday!
Tuesday, November 24, 2009
Tuesday, November 17, 2009
ARMLS STATS 11/9-11/15/09
Inventory Rising As Expected
November Closings on excellent pace.
Pendings starting to falter as holiday season hits...
PENDING: 12,122 ( -124 from last week)
Pending Sfam: 10,630 ( -113 from last week)
AWC: 6,452 ( +17 from last week)
AWC Sfam: 5,690 ( +11 from last week)
CLOSED: 1,512 ( +204 from last week)
Closed Sfam: 1,293 ( +155 from last week)
ACTIVE: 33,468 ( +275 from last week)
Active Sfam: 25,962 ( +266 from last week)
Closed MTD: 2,927
Closed Sfam MTD: 2,525
The numbers are what we would expect, but the rising number of listings show that the banks are still pushing inventory out. We saw a similar increase in listings at this time last year, but we did see several large weekly spikes in inventory last year in the same weekly periods, followed by a fall, so this is not all that unexpected, even with bank listings probably on the increase. I don't have the time to dig deeply into that today, but these are manageable figures, even if we don't like to see them. It will be common for several months for inventory levels to rise, and I am guessing that prices might level temporarily until the late winter/early spring sales season. For comparison sake look back at the 2008 archives through the link on the left of the page. You can see what the inventory build numbers were last year at this time.
Encouraging is the start of the month we have in sales. Last year at this time there were only 1,745 sales. This is a good increase for a normally very slow month. The stimulus has something to do with that, but at the same time,we are in a better environment in any number of ways to last November. Its a number about on par with October 09, which by all accounts was an excellent month for sales. I do think we will see a typically dreadful December, but that is not unexpected and nothing to get worried about. January will be similar, but by February, we will start building up sales again.
There wasn't any real great news articles this week, but there was one bit of news that I think we can glean something from. The foreclosure rates for October fell sharply from last year in Arizona, and fell from September. This will be an interesting trend for us to watch, as we can gauge how far we are through this thing based on foreclosures. If they start to dissipate, we will see prices bouncing back more quickly. A lot of that depends on external forces, like the economy and subsequent consumer sentiment.
We are going to be going into a holiding pattern that will last until after the holidays, and probably into February. It will be pretty difficult to discern which direction we are going, but as long as inventory doesn't get too out of hand during this slow period, I think we can expect a fairly strong rebound in the second quarter, and given demand levels last year, we may see the demand start bleeding into new housing, causing a small surge in new home sales as well, as many builders are very competitive on their home pricing now. That is just something to look for in Second Quarter of 2010.
November Closings on excellent pace.
Pendings starting to falter as holiday season hits...
PENDING: 12,122 ( -124 from last week)
Pending Sfam: 10,630 ( -113 from last week)
AWC: 6,452 ( +17 from last week)
AWC Sfam: 5,690 ( +11 from last week)
CLOSED: 1,512 ( +204 from last week)
Closed Sfam: 1,293 ( +155 from last week)
ACTIVE: 33,468 ( +275 from last week)
Active Sfam: 25,962 ( +266 from last week)
Closed MTD: 2,927
Closed Sfam MTD: 2,525
The numbers are what we would expect, but the rising number of listings show that the banks are still pushing inventory out. We saw a similar increase in listings at this time last year, but we did see several large weekly spikes in inventory last year in the same weekly periods, followed by a fall, so this is not all that unexpected, even with bank listings probably on the increase. I don't have the time to dig deeply into that today, but these are manageable figures, even if we don't like to see them. It will be common for several months for inventory levels to rise, and I am guessing that prices might level temporarily until the late winter/early spring sales season. For comparison sake look back at the 2008 archives through the link on the left of the page. You can see what the inventory build numbers were last year at this time.
Encouraging is the start of the month we have in sales. Last year at this time there were only 1,745 sales. This is a good increase for a normally very slow month. The stimulus has something to do with that, but at the same time,we are in a better environment in any number of ways to last November. Its a number about on par with October 09, which by all accounts was an excellent month for sales. I do think we will see a typically dreadful December, but that is not unexpected and nothing to get worried about. January will be similar, but by February, we will start building up sales again.
There wasn't any real great news articles this week, but there was one bit of news that I think we can glean something from. The foreclosure rates for October fell sharply from last year in Arizona, and fell from September. This will be an interesting trend for us to watch, as we can gauge how far we are through this thing based on foreclosures. If they start to dissipate, we will see prices bouncing back more quickly. A lot of that depends on external forces, like the economy and subsequent consumer sentiment.
We are going to be going into a holiding pattern that will last until after the holidays, and probably into February. It will be pretty difficult to discern which direction we are going, but as long as inventory doesn't get too out of hand during this slow period, I think we can expect a fairly strong rebound in the second quarter, and given demand levels last year, we may see the demand start bleeding into new housing, causing a small surge in new home sales as well, as many builders are very competitive on their home pricing now. That is just something to look for in Second Quarter of 2010.
Tuesday, November 10, 2009
ARMLS STATISTICS FOR 11/2-12/8-09
INVENTORY RISING AS EXPECTED
Pendings Rebound, AWC flat
Sales start well in November.
Real estate in the news:
PENDING: 12,246 ( +225 from last week)
Pending Sfam: 10,743 (+173 from last week)
AWC: 6,435 ( +17 from last week)
AWC Sfam: 5,679 ( +9 from last week)
Closed: 11/2-11/8 1,308 ( -1,532 from last week)
Closes Sfam: 1,138 ( -1,321 from last week)
Active: 33,193 (+704 from last week)
Active Sfam: 25,696 (+618 from last week)
Active listings continue to rise due to seasonal slowdowns in buying activity, but more so due to increased lender inventory. We normally would see inventory start to fall off as we reach the holidays, but I don't think we will see that this year. We are likely to see a bit of an inverted "V" in inventory for the next six months, as inventory will likely rise for several months until we get to the spring selling season, which will start somewhere in February. All bets are off on timing of things, as the recently passed home buyer tax credit may spur stronger activity starting now or even after the first of of the year.
I do expect somewhat of a rise in inventory levels, but we are also likely to see stronger sales than normal during the same period, certainly better than the sales in the same months last year. Last year, the reporting period for this week was 11/3-11/9, and we had 778 closed escrows. We are almost double that this year. we have double the pending sales, six times as many active with contingency, and 21,000 less active listings. No doubt we are in better shape, but the inverted V inventory number is going to be a reality. I do expect prices to flatten over the next several months, until spring. Even with the homebuyer tax credit, we would have to see a massive surge in demand across the price spectrum to really counter-act inventory level gains during what is traditionally a seasonal slowdown. Normally, this period is accompanied by inventory reductions, but I think banks are not bound by these rules, and are placing new inventory on the market. Do expect a good sales month in November, but it is not going to be enough to ward off an inventory increase completely. I think it may be a month in which price gains may stall out- temporarily.
Obviously, the big news this past week was the homebuyer tax credit extension and expansion. This makes move-up buyers eligible for $6500 in tax credits too, but with certain stipulations. This should encourage some sales at slightly higher prices. This is an area that needed help, as low prices homes have dominated. This credit is a huge boost to our industry and combine it with continuing low interest rates, and we have the opportunity to pull ourselves out of the almost 4 year slump we have been in. (The land slowdown happened before home realtors felt it)
There was also this story about the luxury market, which has been suffering, as the higher-end buyer had also lost confidence in the idea of owning a home. There is some evidence that sales are starting to happen in this category, as confidence in general is improving. These sales are happening in part to some very attractive pricing for luxury homes, but these buyers were no where to be found over the last few years.
This was another story relating to pending sales that I think is worth reading, but I don't think it is necessarily on point with current conditions. Our pendings are doing pretty well, but we do have inventory rising to a degree as well. What I would take from it is that there is continuing strength in the demand numbers, but we are not really leaving inventory issues behind. The foreclosure and short sale market are too big a part of our market, and we can't truly recover until that inventory dissipates.
If you want to find bad news in the market, it is always possible to do so. This article from CNBC is typical of something they run, which shows you can create a headline to say whatever you want. We of course know that sales prices took a massive hit in the last year; prices from this time last year have fallen precipitously. Yet the headline of this story makes it sound like this is new and current info. Yes, year over year we are still struggling. This article should be accompanied by a quarter to quarter comparison. I think CNBC's purpose is to create news that contradicts, thereby causing investor discomfort, so they will continue to buy and sell from day to day depending on good or bad news. CNBC is the investment broker industry's best friend. We could easily go back in the last week and find an article that says that prices have risen- same generic headline, completely contradictory, but using a quarter to quarter analysis.
We are entering our winter doldrums now, and even though the homebuyer tax credit will be a tremendous support for the industry, I don't expect that we will be working inventory numbers down until at least March, except for maybe a period of time in December when most of the new marketing activity does stop. The key is whether inventory levels remain low enough for the sales growth season to quickly dissipate the extra fat that comes on the market over the winter. Price growth is not likely to happen with inventory levels rising.
Pendings Rebound, AWC flat
Sales start well in November.
Real estate in the news:
PENDING: 12,246 ( +225 from last week)
Pending Sfam: 10,743 (+173 from last week)
AWC: 6,435 ( +17 from last week)
AWC Sfam: 5,679 ( +9 from last week)
Closed: 11/2-11/8 1,308 ( -1,532 from last week)
Closes Sfam: 1,138 ( -1,321 from last week)
Active: 33,193 (+704 from last week)
Active Sfam: 25,696 (+618 from last week)
Active listings continue to rise due to seasonal slowdowns in buying activity, but more so due to increased lender inventory. We normally would see inventory start to fall off as we reach the holidays, but I don't think we will see that this year. We are likely to see a bit of an inverted "V" in inventory for the next six months, as inventory will likely rise for several months until we get to the spring selling season, which will start somewhere in February. All bets are off on timing of things, as the recently passed home buyer tax credit may spur stronger activity starting now or even after the first of of the year.
I do expect somewhat of a rise in inventory levels, but we are also likely to see stronger sales than normal during the same period, certainly better than the sales in the same months last year. Last year, the reporting period for this week was 11/3-11/9, and we had 778 closed escrows. We are almost double that this year. we have double the pending sales, six times as many active with contingency, and 21,000 less active listings. No doubt we are in better shape, but the inverted V inventory number is going to be a reality. I do expect prices to flatten over the next several months, until spring. Even with the homebuyer tax credit, we would have to see a massive surge in demand across the price spectrum to really counter-act inventory level gains during what is traditionally a seasonal slowdown. Normally, this period is accompanied by inventory reductions, but I think banks are not bound by these rules, and are placing new inventory on the market. Do expect a good sales month in November, but it is not going to be enough to ward off an inventory increase completely. I think it may be a month in which price gains may stall out- temporarily.
Obviously, the big news this past week was the homebuyer tax credit extension and expansion. This makes move-up buyers eligible for $6500 in tax credits too, but with certain stipulations. This should encourage some sales at slightly higher prices. This is an area that needed help, as low prices homes have dominated. This credit is a huge boost to our industry and combine it with continuing low interest rates, and we have the opportunity to pull ourselves out of the almost 4 year slump we have been in. (The land slowdown happened before home realtors felt it)
There was also this story about the luxury market, which has been suffering, as the higher-end buyer had also lost confidence in the idea of owning a home. There is some evidence that sales are starting to happen in this category, as confidence in general is improving. These sales are happening in part to some very attractive pricing for luxury homes, but these buyers were no where to be found over the last few years.
This was another story relating to pending sales that I think is worth reading, but I don't think it is necessarily on point with current conditions. Our pendings are doing pretty well, but we do have inventory rising to a degree as well. What I would take from it is that there is continuing strength in the demand numbers, but we are not really leaving inventory issues behind. The foreclosure and short sale market are too big a part of our market, and we can't truly recover until that inventory dissipates.
If you want to find bad news in the market, it is always possible to do so. This article from CNBC is typical of something they run, which shows you can create a headline to say whatever you want. We of course know that sales prices took a massive hit in the last year; prices from this time last year have fallen precipitously. Yet the headline of this story makes it sound like this is new and current info. Yes, year over year we are still struggling. This article should be accompanied by a quarter to quarter comparison. I think CNBC's purpose is to create news that contradicts, thereby causing investor discomfort, so they will continue to buy and sell from day to day depending on good or bad news. CNBC is the investment broker industry's best friend. We could easily go back in the last week and find an article that says that prices have risen- same generic headline, completely contradictory, but using a quarter to quarter analysis.
We are entering our winter doldrums now, and even though the homebuyer tax credit will be a tremendous support for the industry, I don't expect that we will be working inventory numbers down until at least March, except for maybe a period of time in December when most of the new marketing activity does stop. The key is whether inventory levels remain low enough for the sales growth season to quickly dissipate the extra fat that comes on the market over the winter. Price growth is not likely to happen with inventory levels rising.
Tuesday, November 3, 2009
11/3/09 ARMLS DATA
**October Sales: 8,146-All-Time Record?**
Inventory Rising: Actives up again
Short Sales Starting to move?
In the News:
PENDING: 12,021 ( -1178 from last week)
Pending SFam: 10,570 ( -1013 from last week)
AWC: 6,418 ( -120 from last week)
AWC SFam: 5,670 ( -105 from last week)
CLOSED: 2,840 ( +1216 from last week)
Closed Sfam: 2,459 ( +1033 from last week)
Active: 32,489 ( +277 from last week)
Active Sfam: 25,078 (+218 from last week)
CLOSED OCTOBER: 8,146
Closed Single Family: 7,061
Sales finished very strong in October, posting 2800+ sales in the final week, to boost us comfortably past 8000 sales. For comparison, there 5,335 sales in October 2008. For comparison sake, October 2005, there were 7,973 sales. Of course, the dollar volumes were much higher in 2005, so lets not get ahead of ourselves, but the sales activity is very good. October 2004 was a very good month, and was at the forefront of the boom. It saw a total of 8,128- which means that 2009 is likely the best October in ARMLS history in terms of sales numbers. A dubious record, one might say, due to the decreased dollar volumes, but the positive I take from it is that there is a high amount of interest in purchasing a home again, which is good for our industry.
The flip side of this equation is that we are seeing the banks putting inventory out there at full force. We are seeing an uptick in residential listings, which is fairly normal for this time of year. It normally would start to fall around Thanksgiving, as people put off listings homes until January, but with the bank sales being such a large component of listings, we might see a steady progression through the winter months, until sales start to pick up again in February. There could be a lot of things different this year. Inventory is going to be a key factor to watch, as the increase in pricing we are seeing may be encouraging lenders to try to turn around properties faster.
Now, that being said, we are seeing just a modest leveling off of AWC contracts, the bulk of which are made up of short sales. In fact, 5,760 of the AWC listings are short sales. This number needs to start falling for a few reasons: 1. To unclog the short sale system so people don't become frutstrated by the idea of buying one, and 2. these are pending sales locked into a holding pattern, therefore holding back what should really be some better sales numbers every month. AWC has gone from being a number forecasting future pending contracts, to a dirty word implying contracts that are tied up for months on end. Banks need to realize they are not helping themselves by holding these sales up- they are going to happen anyway, and they might as well approve them and get down the road.
There was some other positive news this week. Gilbert is being singled out for really eye-raising new construction numbers. In an article in the AZ Republic, it is being described as a "mini-boom". Permits are outstripping any other community in the valley. I would not characterized it as a boom, but as one of the most attractive newer areas of the valley, it is understandable why we would see Gilbert activity at the forefront of a new round of new construction. Some builders are even referring to a land rush there- hard to believe that kind of vocabulary even exists here, but hopefully it continues.
I don't always agree with her, but Diana Olick of CNBC wrote a very prescient article about where the homebuying assistance should be focusing on, and she is right. First time homebuyers are critical, and perhaps make up a large part of the market, but move-up buyers are the bottleneck, and while the expansion of the credit will help them to a degree, it would have been a good idea to give them at least the same tax credit that lower-priced homebuyers are receiving. There can be no price appreciation without these buyers confidently looking at getting into better neighborhoods, making their lower priced homes available to first time buyers. Still, the extension will help us through the winter months, and allow many buyers an opportunity they might otherwise sidestep.
Pending home sales were up nationally for eight consecutive months, signalling that maybe we are reaching a point of recovery. There are a lot of obstacles, least of which is inventory, but there are getting to be more positive signals than not, so it seems we are headed in the right direction.
Inventory Rising: Actives up again
Short Sales Starting to move?
In the News:
PENDING: 12,021 ( -1178 from last week)
Pending SFam: 10,570 ( -1013 from last week)
AWC: 6,418 ( -120 from last week)
AWC SFam: 5,670 ( -105 from last week)
CLOSED: 2,840 ( +1216 from last week)
Closed Sfam: 2,459 ( +1033 from last week)
Active: 32,489 ( +277 from last week)
Active Sfam: 25,078 (+218 from last week)
CLOSED OCTOBER: 8,146
Closed Single Family: 7,061
Sales finished very strong in October, posting 2800+ sales in the final week, to boost us comfortably past 8000 sales. For comparison, there 5,335 sales in October 2008. For comparison sake, October 2005, there were 7,973 sales. Of course, the dollar volumes were much higher in 2005, so lets not get ahead of ourselves, but the sales activity is very good. October 2004 was a very good month, and was at the forefront of the boom. It saw a total of 8,128- which means that 2009 is likely the best October in ARMLS history in terms of sales numbers. A dubious record, one might say, due to the decreased dollar volumes, but the positive I take from it is that there is a high amount of interest in purchasing a home again, which is good for our industry.
The flip side of this equation is that we are seeing the banks putting inventory out there at full force. We are seeing an uptick in residential listings, which is fairly normal for this time of year. It normally would start to fall around Thanksgiving, as people put off listings homes until January, but with the bank sales being such a large component of listings, we might see a steady progression through the winter months, until sales start to pick up again in February. There could be a lot of things different this year. Inventory is going to be a key factor to watch, as the increase in pricing we are seeing may be encouraging lenders to try to turn around properties faster.
Now, that being said, we are seeing just a modest leveling off of AWC contracts, the bulk of which are made up of short sales. In fact, 5,760 of the AWC listings are short sales. This number needs to start falling for a few reasons: 1. To unclog the short sale system so people don't become frutstrated by the idea of buying one, and 2. these are pending sales locked into a holding pattern, therefore holding back what should really be some better sales numbers every month. AWC has gone from being a number forecasting future pending contracts, to a dirty word implying contracts that are tied up for months on end. Banks need to realize they are not helping themselves by holding these sales up- they are going to happen anyway, and they might as well approve them and get down the road.
There was some other positive news this week. Gilbert is being singled out for really eye-raising new construction numbers. In an article in the AZ Republic, it is being described as a "mini-boom". Permits are outstripping any other community in the valley. I would not characterized it as a boom, but as one of the most attractive newer areas of the valley, it is understandable why we would see Gilbert activity at the forefront of a new round of new construction. Some builders are even referring to a land rush there- hard to believe that kind of vocabulary even exists here, but hopefully it continues.
I don't always agree with her, but Diana Olick of CNBC wrote a very prescient article about where the homebuying assistance should be focusing on, and she is right. First time homebuyers are critical, and perhaps make up a large part of the market, but move-up buyers are the bottleneck, and while the expansion of the credit will help them to a degree, it would have been a good idea to give them at least the same tax credit that lower-priced homebuyers are receiving. There can be no price appreciation without these buyers confidently looking at getting into better neighborhoods, making their lower priced homes available to first time buyers. Still, the extension will help us through the winter months, and allow many buyers an opportunity they might otherwise sidestep.
Pending home sales were up nationally for eight consecutive months, signalling that maybe we are reaching a point of recovery. There are a lot of obstacles, least of which is inventory, but there are getting to be more positive signals than not, so it seems we are headed in the right direction.
Subscribe to:
Posts (Atom)