Inventory depletion picks up pace; March '11 will best March '10
Pending Sales still rising as spring buying season takes hold
Are prices finally going to start to rise?
Pending Sales: 13,729 ( +341 from last week)
Pending Sfam: 11,723 ( +301 from last week)
AWC: 7,111 ( +79 from last week)
AWC Sfam: 6,094 ( +37 from last week)
Active: 30,730 ( -932 from last week)
Active Sfam: 24,794 (-786 from last week)
Closed 3/21-3/27/2011: 2,086 (+46 from last week)
Closed Single fam: 1,744 ( +27 from last week)
Closed through 3/27/2011: 7,361 (March 2010: 8801)
Closed Sfam: 6,137
Sorry, I don't have much time for analysis today, but I did want to get the numbers posted. We had another solid week, with 2000+ closings. We are almost assuredly going to pass 9000 sales in March, and there is an outside chance of hitting 9500. It doesn't look like that now, while we are only at 7361, but keep in mind the last week of February, there were 2770 closings; its not always true the last week is the biggest week, but it usually holds true. If I was feeling a bit more optimistic, I would say there was a chance at 10,000 sales in March, but I think that is overstepping a bit. It could happen, but it would count on March's final week to hit into the 3000 sales, and I have no way of accurately forecasting that.
Inventory is falling at a very strong clip reminiscent of 2009; last year, there was a large influx of new listings through March and April, which mediocre sales could not keep up with, and sales fizzled all summer. We seem to be tracking much better this year, with inventory falling far short of last year's levels. So far this year, there are over 4000 less new listings in March compared to 2010; that is after there 2000+ less new listings in February than 2010. I will try to discover where the reductions are coming from after the end of the month when figures are settled, but the trend had not been less foreclosures, but less normal listings, which I would also guess tends to have a downward effect on pricing. I would guess that people are less spooked into selling, don't like the prices they can sell at, or just don't think they can qualify for a home right now. Whatever the reason, they look like they are staying put. I should point out that the percentage of foreclosure listings has gone up of available listings, but that is because there are less listings in total, and the actual number of foreclosures has been static. I don't take that shift as bad news. Whatever the reasons for less inventory is a good sign.
The mediocre news is the median price is low. It is up slightly, and I would expect it to finish slightly higher, but it is still sharply less than last year. We have all been calling false bottoms on the pricing for a long time; we do seem to have a lot more factors on the side of it starting to rise now, however. Lower inventory and that even falling; increasing sales and pending numbers, the economy overall getting stronger, and really a small amount of new home inventory as an alternative. We also have a very strong rental market right now, as well as improving employment prospects; these are all leading indicators that home prices will start to rise. We are also reaching the calendar position of very strong sales for the next six months, so that also works in rising prices' favor.
There is a great article at CNN about the near future of homebuying that I wanted to share with you also; the author interviews an excellent resource who has a long history tracking the housing markets. A very good read.
Have a great day!
Chris
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