Median Price set to rise in June
Pendings rise stalls out as summer slowdown season arrives
Inventory still falls, on pace to add just less than 10,000 new listings this month
Inventory numbers falls deeply into to unseen levels since 2005...
Pending: 13,640 ( -253 from last week)
Pending Sfam: 11,848 (-197 from last week)
AWC: 8,023 ( +42 from last week)
Sfam AWC: 6,923 (+36 from last week)
Active: 22,300 ( -408 from last week)
Single Fam: 17,765 ( -345 from last week)
Closed 6/13-6/19: 2,160 ( +378 from last week)
Closed Sfam: 1,849 ( +303 from last week)
Closed MTD (6/19) 5,072 (June 2010 same date: 5,054)
Median price through June 21st: $115,000. May: $108,200 Up: 6%
It is highly likely that the median price will rise in June, and possibly showing an exceptionally strong gain, as months of inventory burn and fairly strong demand force buyers into competition. The backup information supports this: the average selling price is also up, from the $168K level from $158K last month. That is a strong gain, and was inevitable given sales and inventory numbers. It is not just low priced condos whose price is rising; that was a thought I had as the number of condos has dwindled, driving those prices higher than where they were. Single family home sales are also pushing about $5000 higher than last month. A strong gain in the median price is one of the last wheel chocks before the plane can take off, and while it certainly can be an aberration, the predictive stats would offer support: low inventory, strong demand, low interest rates, low new home inventory that is increasingly being pushed to the fringes of the valley. These should have predicted price gains months ago, if we had normal consumer confidence, but alas, we don't. The fact that finally price gains might be shining through is evidence that there is some potential for recovery
These are signs that the recovery is taking hold. The inventory numbers are not there for people to be as choosy or tight with their offer. If they are in need of a home, there is likely competition for it right now, prompting them to loosen the purse strings a bit more. The level of inventory is not increasing; it is still decreasing. Once again, I refuse to get in to the "theoretical inventory" idea, because in real estate, we don't count it as inventory until it hits the MLS. Every house built from the first days of Arizona that still stand is "shadow inventory", and there is no proper way to measure it until its actually for sale. The good news is that we have reached a very low level of inventory that even given the summer slowdown, is low enough that if it does inflate, will have to go a long way to exit the "safe" level. This summer slowdown might not be as bad as last summer, as is indicated by pending numbers. Last year at this exact time there were only 11,474 pending sales; that is about 16% below where we are right now. If you could extrapolate that to sales, adding sixteen percent to last years sales figure would take us to 8000 sales for July; not a great number, but July is not a great sales month either. I don't know if that number extrapolates exactly, but I tend to think we will reach 8000 sales in July.
I am still surprised by the low number of new listings on the market; they seem to be falling each month, and I would not be surprised if we stayed below 10,000 new listings for this month; that is the pace we are on, but I don't know if the end of the month is a heavier listing period or not; I haven't studied that. Right around 10,000 listings is still incredibly helpful to our inventory situation. We will assuredly pass 9,000 sales in June; maybe even 9500, and an equal number of new listings to sales means inventory burn, as besides the actual sales, many go into pending, expire, or go active with contingency, and therefore they are all deficits on the total inventory side. Perhaps there will be a surge of foreclosures this summer; there are no indications of it as of yet; the opposite seems to be holding true. We have gone six months of 2011, and we have fallen about 14% in the number of new listings compared to last year, and last month had the fewest additions of all, and is likely to be challenged by this month. This is continuing to lead inventory through a downward plane through June, and it appears it is safe to say we right now have a tight supply of available homes. I have even heard some anecdotal evidence from in-demand housing markets in the metro area that builders are trying to pick up land or even get land downzoned from commercial back to residential, as there is becoming a dearth of available homes in these cities; Chandler is a noticeable one, and Gilbert is likely also experiencing a bit of this. These are both areas where prices for new homes are higher than the median, giving builders an opportunity to actually make a little money.
The sales figure MTD sales is a little deceiving; the pace looks similar to last year, but it is a little bit of a weekend trick, as of today, we have gained a little distance on last year's pace. One extra weekend day in this year's count can make a big difference. There is starting to be some daylight between the paces, and we should finish better than last year's final tally of 9156. Maybe not markedly better, but I am thinking 9,500. That is not bad at all.
Regardless of the mediocre news about housing nationally, we seem to be holding our own here. That is born out somewhat by the news today, that the west was essentially flat, while other areas, May sales were down. Not entirely unexpected, given the weather issues throughout the midwest and south. Arizona's own sales in May were up from April and from last May; of course, we have weather on our side, and an improving state economy and jobs picture. Its by no means strong yet, but it appears to be improving at a strong pace.
No comments:
Post a Comment