Pendings Steady Through May
AWC down slightly- Short sales at their peak?
May Sales will approach 9000, but behind 2009 pace.
Pending: 14,180
Pending Sfam: 12,164
AWC: 8,055
AWC Sfam: 6,895
Closed 5/17-5/23: 1,926
Close Sfam: 1,644
Active: 33,365
Active Sfam: 26,291
Closed thru 5/23/2010: 5700
Closed Sfamily: 4,829
May is looking like its going to be a moderately successful month for home sales. We have been living with the expectation that sales will keep growing, but this might be the peak sales figures that the current economy will allow. Prices so far this month are up slightly from the last two months, from $128,000 to $130,000. The number of sales may not match April's number, however. We have a Holiday on the last day of the month, and logistically these sales slated for the last day of the month may slide to June.
Significantly, it appears that the last three months have shown people have become more hopeful about selling their home. The number of listings has risen compared to last year. Interestingly, these are not necessarily bank listings There was an article recently that addressed how people were putting their homes on the market this spring to try and sell to consumers who could take advantage of the homebuyer tax credit. It appears to be true, as listings were up substantially in March and April. May looks like it is going to be about the same as last year, maybe up slightly. The average list price, has been rising steadily, but modestly, after falling for the last few years. We may have reached a short term equilibrium in housing inventory, as it seems to be meandering within a range right now.
One of the encouraging things we are hearing nationally is that the percentage of bank sales of homes is retreating. Locally, that appears to be true also, as in May 2010, we have fallen below 39% of sales being lender owned. This is compared to the same period during May of 2009, during which 65.7 % of all sales were lender owned. This is significant, and shows progress. It is nowhere near normal, which is more like 2%, but its a trend in the right direction.
Inventory Issues
Currently, out of the 33,000+ listings, only 5,162 are listed as lender-owned. Really not the tidal wave we keep hearing about. I am sure there is a lot of shadow inventory, but it doesn't appear to be overwhelming the market. Of the nearly 10,000 new listings so far in May, 2118 are lender owned properties- 20-25%. Not a tidal wave, it seems. I am always more concerned about the short sale problem that manifests itself in the Active With Contingency category I report. There are 2144 new short sale listings so far in May- that is nearly 25% of the nearly 8900 homes listed as short sales. As long as people are trying to sell short sales, we will see bottlenecks in sales, as the process takes longer than average, even with the quicker process the banks are promising. They are certainly better than lender-owned sales, but its still a bit of a bronx cheer. I actually don't think short sales' impact has peaked yet. I think more people will try to take advantage of short sales, so it will linger until we start seeing bigger leaps forward in pricing. The banks are losing money every time one sells, and we want banks to be confident in lending going forward.
The trending in the Inventory numbers do look better as you dig into it- the inventory is a little bit flat right now, but its an acceptable level, and it seems like bank owned inventory is retreating.
Hopefully, this last week won't fall flat, but it appears May is going to be an okay month for sales. Sentiment does seem to be changing for the better, but we are going to have to see some solid months ahead to quiet the critics. The incredibly low interest rates and relatively flat pricing will help a lot, but we need to see stronger job growth in Arizona before we can claim to be out of the woods.
