Pendings down as summer nears, closings rise
Sales finishing strong in June, should top 9000 easily
Inventory slide flattens, but new inventory lower this month as well
Median price up, but slides toward $110,500
Pendings: 13,284 ( -356 from last week)
Pendings Sfam: 11,582 ( -266 from last week)
AWC: 8,022 ( -1 from last week)
AWC Sfam: 6,930 ( +7 from last week)
Active Listings: 22,011 ( -289 from last week)
Active Sfam: 17,542 ( -223 from last week)
Closed 6/20-6/26 2,257 (+97 from last week)
closed Sfam: 1,903 ( +54 from last week)
Closed MTD: 7,791
The summer slowdown is starting to show up this week. That sounds bad, but compared to last year, pendings are very strong. Pendings stood at just 11,474 at this time last year according to the archives. That means we have over 15% stronger demand numbers than last year. That is significantly better. Also helping is the 15% less new listings that are coming on the market each month. June has a chance to be the lowest new inventory of any month this year; I am betting on that being the case as of right now. There is an outside chance we could finish with less than 10,000 new listings, but I think it will settle in above that. We should still see another 1800 closings this month, which would put us up and over lat June's numbers. Its hard to read right now how many to expect; it could be higher than that. we should finish in the 9500 sales in June though, and that is pretty good.
Inventory is going to finish the month much lower, of course, but I think the decrease is going to flatten for much of the rest of the year. There is definitely stronger demand than last year, as we noted with the number of pending sales being higher by 15%. But last summer also saw a pretty strong increase in inventory that demand wasn't keeping up with; its possible we could see that this summer as well. Last July, August, and September saw 12,500 homes plus added to the inventory each month; the trend is lower than that this year, so we may see more in the range of 10K-11K, but sales will not be in the 9500+ range all summer either, so we might see inventory bounce back slightly over the summer. Inventory has reached a safe zone, though, so adding even 10% back doesn't really hurt anything, and I don't think it will lower prices either; prices are being driven entirely by something other than inventory right now: lack of lending. Best guess here is that inventory stays flat or slightly higher over the summer, but if we continue to sell 8000+ homes a month over the summer, there won't be any increase either-probably. I can be wrong. Case in point-
Just last week, I wrote we were at $115,000+ for a median price. Well, that has fallen substantially since then, as apparently everyone closes their cheap condos all in the middle of the month. The median is now $110,500. Its still up from May, but not at statistically relevant numbers. Just thought I would mention it. Prices should be up given demand and supply, but lack of lending and distrust of the economy are hampering prices.
There was just this report in April that sent a strong signal to Wall Street; the normally very dour numbers of the Case Schiller index surprised, showing a gain in home prices in April. Phoenix' prices even eked out the slightest of gains. Truthfully, it will show up for Phoenix that we lost it in May however; median prices were lower in May. Of course, I have no idea what kind of index Case Schiller uses- does it include condos, does it include mobile homes, is it a median price, or is is an average price? I don't know, and I don't really watch their index too closely since it is several months behind and is a national number. Still, Wall Street liked it today, and if wall street likes it, then the market goes up and optimism goes up. Perhaps this price gain will stick with us for a while.
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