**Single Family Homes now at 20,000 Range**
Inventory at lowest level in Half a decade
Pendings rise; Inventory could rise a bit.
Pending Sales: 14,062 ( +553 from last week)
Pending Sfam: 12,097 ( +438 from last week)
AWC: 7,850 ( +243 from last week)
AWC Sfam: 6,770 ( +190 from last week)
Active: 26,012 ( -735 from last week)
Active Sfam: 20,847 ( -590 from last week)
Closed: 1,639 ( -1482 from last week)
Closed Sfam: 1,393 ( -1225 from last week)
While all statistics look like they are heading in the right direction, May could prove to be the bottom of the inventory level. New listings in May started at a fairly rapid rate, and while not on a dramatically different pace than the last few months, it is on pace to come close to last May's number of new listings. Still, inventory is slipping to levels that usually scream "price acceleration", so more inventory in relation to the relative amount of sales is not going to kill the market. Pendings did also rise sharply in the last week; May could just as easily see an acceleration in buying activity. Compared to the last several years, we certainly can experience a little run on inventory, or a monthly blip in the number of sales without upsetting the market.
What is an important milestone to us this week is the fact that we have reached 20,000 single family listings. It means we are at the doorstep of being under 20,000 home listings, and given the number of sales we experience, this is actually a very low number. We are not even back to what I could consider to be normal number of sales for a market as large as ours is, and yet here we are, pushing right to a psychologically important number.
We did hear yesterday about the double dip in national home prices- this is not the news we like to hear, but it was telegraphed early. Arizona may not be part of that trend, however, as our prices have stabilized it appears, and the average price has even risen this year. Foreclosures and short sales will negatively impact prices for a while, but it is difficult to look at our inventory numbers, both new and resale, and not see our market as perhaps healthier than others. We as a patient, if you will, have seen our fever break, and while we are not going strong yet, we are on the mend. I am also tempted to say, with the disclosure that I have not researched it, that national trends in lowered prices I.E. the "double-dip" have as much to do with people's choice in what kind of home they are going to buy now, and the number of investors who would choose to buy lower priced homes as investor properties as it does about the relative value of housing. This is something Arizona has already experienced, and we are going to be fine. The wringing of hands over the double dip in national pricing is over-done. The stock market calls this "capitulation" and it is the basis typically for a change in direction, as people realize that you are at or near the bottom. The relative economic value of a place to live is beginning to be much higher than the economic cost of owning a home, and this drives consumers to purchase, whether as a domicile, or as an investment. This is a market inequity that does not last long. Consumers will see the opportunity, or investors will see the opportunity; or should I say money will find the opportunity.
What I would really want to look for in the next several weeks is if inventory does keep falling, and if sales pick up or at least stay level with April. We closed what is a hair breadth away from 9500 homes in April, and that would be a perfectly decent level to maintain through at least May and June; if our economic recovery holds, and we can sell close to that many through the summer, even better, because it would mean builders would have to take notice at the demand and want to get their share of the buyer pie. We are moving into much better territory right now, but getting a mortgage is very tough, and jobs are still not what they should be. The slow economic recovery is is not helping, but it does look like our market is far ahead of many others around the country right now. We were one of the first in the housing crash, we may be among the first out of it as well.
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