Pendings Drive Back Over 12,000 This Week
Median Listing Price Rising?
New listing activity maintains lowered trajectory in August
Pending Sfam: 10,502 ( +142 from last week)
AWC: 7,820 (+102 from last week)
AWC Sfam: 6,776 ( +101 from last week)
Active Listings: 19,207 ( -58 from last week)
Active Sfamily: 15,086 ( -71 from last week)
Closed 9/5-9/11: 1,139 ( -1,307 from last week)
Closed Sfam: 957 (-1,142 from last week)
New Listings in August: 10,241 (August 2010: 12,972
For the year: -16.7 % less than 2010
New Listings September: 3,367 ( September 2010: 12,841)
Sales 2011: +11.9 over 2010
Median list price August: 124,900 (August 2010 : 119,000)
Pending sales in September are recovering from the dramatic drop that typically accompanies the end of the month sales. We are just never sure, given the economy, if the pendings will recover in any given month, but they have shown very good resiliency. My stats are a little spotty for the fourth quarter last year, but I did take a reading on September 21, 2010. There were 10,250 pendings that day; a number substantially less than our current figure. I would expect that pendings next week, which will match the same week as the 10,250 reading, will be higher yet. This means we are 15-20% ahead of last year's pace, and shows we are heading toward some recovery in housing in Arizona. Our inventory is exceptionally low in the MLS, despite what you hear in the news media. There are and will continue to be homes in arrears on payments, etc, but that will be the case for a long time to come. To start counting them as inventory or "pre-inventory" is ludicrous. All houses are potential inventory; I will give a good example. You have a home that is constantly running 60 days late on its payments; so someone publishes that somewhere, and adds it to the "shadow inventory". But, on the same block you have a family whose head of household got transferred to a great new job in San Diego, but will need to start next month. He's not upside down on his house, and not behind on payments, but he decides to put his home on the market that very day. Which of these situations is a better example of shadow inventory? You can answer that by saying which one become inventory, and which one dogs along being called shadow inventory for the next year until the owner caught up or refi-ed. My point is, every house is shadow inventory, even the paid for ones. Shadow inventory is a wildly inaccurate way to assess inventory. We have tens of thousands in supposed "shadow inventory" right now; but our actual inventory is down 16+% for the year, so what does the shadow inventory tell us? Not a darn thing, other than that this house might possibly find its way on the market in the next year. But then again, so will your 90 year old Aunt Hilda's the week after she falls down and needs to go to skilled care. No one was looking at that as shadow inventory, were they? Or how about the divorce that is just brewing because an athlete got caught with another woman? Do we count those? No, we don't. Right now, it seems like the only inventory there is is the bank -related inventory, and buyers will tell you that they are feeling like they don't have enough choices right now. You know why? Because there is barely more than 2 months worth of ACTUAL inventory. People who might normally be considered movers after several years are hunkering down and keeping their home if they can afford it, because they might have a hard time getting a mortgage, or selling the home doesn't benefit them enough financially to go pursue another house.
We aren't allowed to count sales as soon as a college graduate gets a hot shot job out of college; lets not start adding homes to inventory just because someone loses theirs. You can't buy a home that's in shadow inventory, so its not inventory.
What is encouraging is how buoyant demand has been this summer. I really thought we would experience a great fall-off after June, since that is the beginning of a seasonal slowdown. Certainly sales are less than the peak in June, but we saw strong sales through the dog days of July and August, and that is very encouraging. Our pending number continue to bounce back each month, portending strong sales for the next month. I keep saying this, but if we stay on this track until February, there will be a lot of fighting by buyers over the choicest properties on the market, since their really is no excess to meet the demand spike that occurs in the buying season. We have practically shaved more inventory since the beginning of the year than there is inventory, so where does that leave us when we go through the sustained demand months of February-June? Yup, buyers pushing prices up.
Sales this week obviously fall off after last week's, since they included end of the month numbers. I am a little bit concerned that we will hit some soft spots in sales though, since we have had to absorb some wicked rides in the stock market that can affect people's confidence. If September was a little soft, I would not be surprised, but the pending numbers are growing again, and if that is an indication, than we seem to be holding on to the same track.
Just a quick note about the Median List Price. It had been hanging around near $115K-119K for the better part of the last year, but we have seen it pop up to $123K, and now $124K+ in August; that means that the bottom is probably coming up on list prices. It is not a giant indicator, but it is a trend nevertheless. Happy to see it, along with a stabilized median sales price. It has been bouncing along on the same track for a significant time, and now that inventory has been largely cleaned up, I would expect that the trend will be higher rather than lower. It might not happen until Spring, but its going to happen.
Have a great week!
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