ARMLS STATS 6/1/2010

****Prelim May Sales: 9,166****
Median Price rises 1.56 % from April
Number of New Listings down sharply from April Influx
AWC numbers continue to slide- Short Sale Bottleneck opening up?

Pending: 12,516 ( -1664 from last week)
Pending Sfam: 10,723 ( -1441 from last week)

AWC: 7,761 ( -294 from last week)
AWC Sfam: 6,663 ( -232 from last week)

Closed: 2,700 ( +774 from last week)
Closed Sfam: 2,302 ( +658 from last week)

Active Listings: 33,141 ( -224 from last week)
Single Fam: 26,176 ( -115 from last week)

CLOSED MAY 2010: 9,166
Closed Single Fam: 7,763

Preliminary sales figures for May came in higher than projected. 9000 is purely a psychological number, but we did cross it. We are not going to have as many sales as we did in May 2009, but it is important to realize that the median price a year ago was only $119,000- lots of low priced, low end homes were being scooped up by investors at that time. That is still happening, but as I have documented in previous posts, the percentage of lender-owned sales and listings have fallen substantially. That seems to be backed up by this article. Their numbers are slightly different, as they probably include outside of MLS sales; they also are referring to single family sales only, I believe, but the idea is the same: there are less lender-owned sales, so more homes are being sold in which the property owner will need to find a new home, whether it is a rental or another sale. It will of course be both, but that is a far better situation than an empty home selling and not re-creating demand for housing somewhere else. It is more likely that homes sold through normal channels means that the seller will purchase another home somewhere else to live. The percentage of a lender-owned sales requiring another home to live in is zero, so you can see my point about it being categorically better, even if we don't know what the exact percentage of re-buying is occurring. 9166 is a good strong number, but we may have bumped up against the glass ceiling here. The economy is not strong enough, and price appreciation is not attractive enough to continue to see the kind of gains monthly we were used to. June should be a decent month, but probably down from April and May due to the wave of tax credit homebuyers petering out. We still have several strong months for sales ahead, and we are outpacing 2009 in number of closings by 9.8%. We are also ahead of last year's median price YTD by 5.5%, and ahead of overall dollar volume of sales by 15.1%. We should be very happy with these numbers, but I think we are all looking for that one big sign that tells us the slump is over. We are not going to get that sign; it is just going to happen as a process of there being more positive news than negative news.

As I alluded in the title, the median price of homes rose again in May, by 1.5%- $2,000- from $128000 to $130,000. It might not seem like a huge jump, but if we ran up the price 1.5% a month, that would be 18% per year gain. I don't think we will see that happen the same every month; it is likely to happen in fits and spurts, but price levels are really the most negative thing that can be said about the housing market.

The level of inventory has been flat for the last month, but we did see quite a few less new listings come on the market in May compared to April. In April, 14076 new listings were posted under residential in the MLS. In May, there were 11,396 new listings. Inventory levels are at a comfortable level, but we wouldn't mind seeing the inventory chewed up a bit more.

We are seeing some clearing of the AWC. Whether that is short sales happening quicker remains to be seen, but it is somewhat encouraging that that number is falling. I haven't done a lot of analysis on this yet, but next week I will probably have some more insights. I will do some research and see if this is the case, but it looks like it is.

One other thing that we heard about today was a strong pickup in construction spending across the board in April. This article at CNBC discusses manufacturing being up, but also this bit about new construction activity.