Active Listings: Now only 22,708!
Pendings rising, but does it signify a strong summer?
Can inventory keep falling?
Price gain forecasting for June...
Pending: 13,893 ( +248 from last week)
Pending Sfam: 12,045 ( +199 from last week)
AWC: 7,981 (+160 from last week)
AWC Sfam: 6,887 (+147 from last week)
Active: 22,708 ( -583 from last week)
Active Sfam: 18,110 ( -506 from last week)
Closed 6/6-6/12/11: 1,782
Closed Sfam: 1,546
As we can see, inventory continues to fall in the ARMLS system. Sales seem to be continuing on a strong path, as pendings rose and homes are not coming onto the market anywhere near the pace required to keep up with demand.
Let's take a quick look at pending sales from last year to this year. Last June 8th, we were at 12,521 pendings; This year, we are nearer 14000. We also saw two weeks later last year that pendings had started to slide from that number, and the mediocre summer began. The fact we are still around 14000 pendings, which is over a 10% increase, means we are likely to see stronger summer sales than we did last year. I do think pendings will start to fall a bit as we get into July, but if we are on the same trend line as we are now, its going to be a perfectly acceptable summer sales season. I would expect inventory to increase a bit going through the summer as sales fall; (inventory goes on the market at a more consistent rate than sales occurring) If we dip below 8000 sales during the summer, I think we will see a slight rise in inventory numbers if the current trend in new inventory remains. It has been lower than last year, though, so that could continue. We are at a more than acceptable number of inventory on the market, so some slight rises are not meaningful. We would really like to see demand increase to where there are bidding wars that raise prices, but we are not at that point yet. Inventory is in all likelihood going to flutter up for several months
In fact, I think price recovery might come with next spring's selling season. We have dramatically reduced inventory this year, which is great, but we haven't seen pricing pop back up yet; I think that unless we have a blowout summer selling season, we won't see them this year. I don't think- but, through the first part of half of June, we have a median selling price that is about $7,000 higher than last month. That is significant; I don't know if it will hold up, but its just possible that the market is reacting to the tighter supply and increased competition for the best homes. We have had three very solid months of sales, increasingly constricted supply, and what looks like what might be the peak of foreclosures. Its very possible that prices could now start to rise, even with mediocre summer sales. The inventory is remarkably low; 22,000 listings is not a lot for an area that sells as many as we do each month. Prices could surprise, but the price rise so far this month could be an early anomaly corrected to a large degree by the larger number of sales that occur in the second half of the month. It still looks like it could be biased upward though, which would be a great sign. A price increase is a price increase even if it is not 6% a month.
Here is an interesting comparison in real estate markets. This excellent website researching Las Vegas Single Family Home sales shows our relative position. We sold more homes last month than Las Vegas sold in the last 90 days, and we have only about 6000 more single family listings than they do (11,360 to 18,110.) Our relative health is much stronger than we realize at this point, and the market was eventually going to catch on to that, so a price change might be in the works for us. Let's hope so; its very important that lenders start to feel more comfortable extending loans on real estate, and they will only be happy when they see the price of real estate rising so their loans become more secure a year from now than they were today.
I am not feeling well today, so I am going to end it here. Thanks for reading!
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