ARMLS STATS June 2010

****JUNE CLOSINGS HIT 9,310****
Biggest Sales Month since August 2005!
Inventory Flat and Pendings showing downward trend


Pending Sales: 10,477 ( -997 from last week)
Pending Sfam: 9,036 ( -862 from last week)

AWC: 7,303 ( -244 from last week)
AWC Single Fam: 6,258 (-213 from last week)

Closed 6/28-7/4 2,711 ( +792 from last week)
Closed Sfam: 2,333 ( +698 from last week)

Active: 34,226 ( -14 from last week)
Active Sfam: 27,246 ( +65 from last week)

CLOSED JUNE: 9,310
Closed Single fam: 7893

June Sales finished stronger than expected, topping 9,000 decisively. June may be our peak for the year, as tax credit driven sales are now mostly used up. The sales numbers were excellent, however, and there have not been as many as 9300 sales since August of 2005, when there were 10,003 closed listings. That was the boom year, obviously, and the median price was literally twice what it is now, but we are showing good demand for home purchasing in the valley. Even if it falls off somewhat, we will be okay.

That said, I do expect that we will not maintain this level of sales through the summer. There is simply not going to be as strong of demand with the expiration of the housing credit and lackluster performance in the creation of jobs by industry; consumer confidence is not what it should be for a strong recovery to occur. Single family homes are also facing increasing competition from competitively priced new home sales. The builders are seeing opportunities again, and are working at taking their share of the market. My feeling is that we are going to go sideways a bit until job creation picks up. Business may not cooperate with this, until after the elections in the fall. I am not sure that we are seeing Business embrace the Democrats plan for them, and they take a wait and see approach hoping that a more business friendly congress is swept into office in November before making major investments in new hires. It is still a big question mark. What we have heard is that big business' coffers have never been more full, but so far they are not taking the plunge and investing it in new production.

I don't say that to be gloomy; this was not going to be a rocket to the moon recovery by any means. We as a metro area are growing, and so far we are absorbing the inventory pretty well. The average price of a home sold went up from May's $177,288 to $179,976 in June; it is also up from first quarter's $176,518; perhaps it is showing some movement in the upper end, pulling average prices higher. Certainly, the bulk of the activity is in the lower reaches of the market, which is why we see the median number going lower, but the gross dollar sales and the average are moving up, and that is something we should be encouraged about.

While the sales in June should be celebrated, the numbers that bear watching are the pending numbers. How far are they going to fall? What kind of activity are we going to have for the next three months, which are traditionally the last three strong months until march rolls around again? What are prices going to do? There are questions marks. We have 3.6 months supply of inventory, and it is stubbornly sticking there. It is not too high, but I don't know anyone in our industry who wouldn't like to see about 5000 listings peeled off there overnight; it would encourage higher prices and more construction.

We can be happy for the moment that we have reached a level of demand we haven't seen for almost five years. We have shown good consistent high demand this year, and it seems like it is going to continue. We have likely reached a short term peak for this year, but if we can stabilize not far below the levels we have been at, we are still going to have an excellent year.