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.
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