ARMLS STATS 10/25/2011

Pendings Rise, Inventory Flat

October to be a slow month for sales

Pending: 11,425 ( +147 from last week)

Pending Sfam: 9,941 ( +100 from last week)

AWC: 7,659 ( -127 from last week)

AWC Sfam: 6,620 ( -117 from last week)

Active: 19,733 ( +43 from last week)

Active Sfam: 15,507 ( +73 from last week)

Closed 10/17-10/23: 1,553

Closed Sfam: 1,323

New listings in October: 7,453

October is shaping up to be a soft month this year, with sales perhaps reaching their lowest point since February. Much of this has to do with the summer swoon we experienced when the debt discussions came about. Weakened consumer confidence is the result. There are of course, other factors. October is often the third weakest sales month of the year, research shows. We are going to be looking at sales in the 7000, most likely, and I think it will surpass February, but we will have to see how this week goes. The good news is that pendings are trending upward again, although we are likely to see that fall at the end of the month when there is a rush of sales.

Active listings are also climbing, as expected, but ever so slightly as to be almost flat. We are in our slow season, but we still continue to see soft numbers of listings. Less listings and more sales means its difficult for inventory to grow. A few more months of this level of inventory growth and relative sales, and we will be back to our big sales months with very limited inventory to satiate it with.

I want to focus on pending growth; if we can maintain pending sales in the high 11,000's into 12,000's, through the winter months, it probably means a strong recovery in March, including on prices. That will mean relatively few homes available, and lots of demand, because once we get to March there will be a lot of buying pressure on the relatively few homes available. I would also like to mention that pendings are a very true indicator of traditional sales; professional investors are buying many of the homes at courthouse steps, while retail investors and home livers buy them through MLS. The word is that there is strong demand at the auctions, which means inevitably some of these homes will appear in MLS once rehabbed. However, many will be turned into rentals, and ultimately, we may see the effect of too many investor purchases turning into a boon to renters in a few years, as there will be a lot of rental properties. Of course, right now, there are lots of renters, so it is lucrative. There was article discussing that today: there is solid growth in revenue for investors.

Overall, we are kind of sitting in the doldrums for a while; the president came up with some new programs for refinancing that I think almost everyone is non-plussed about. The government can't save housing short of making lenders take a massive haircut, or do quickly adjustable loans, and they are not doing that. Everything is a half-measure, so don't expect their program to make a lot of difference or cause even a stir.

ARMLS STATS 10/18/2011

Pendings, Inventory, both Up but statistically Flat

Median price might be rising, median asking price Sharply higher

Builder sentiment getting stronger?

Pending: 11,278 ( +60 from last week)

Pending Sfam: 9,841 ( +48 from last week)

AWC: 7,786 ( +62 from last week)

AWC SFam: 6,737 ( +54 from last week)

Active: 19,690 ( +96 from last week)

Active Sfam: 15,434 ( +65 from last week)

Closed 10/10-10/16: 1,643 ( +379 from last week)

Closed Sfam: 1,414 ( +311 from last week)

New Listings in October: 5,259

Median Price: $115,000 (+$2000 from September)

Just a couple of comments. Listings toward the end of September grew faster than expected, so there might be more inventory coming than we have seen all year. Through September 13th, there were only 3367 new listings, but the month finished with 9700, so there were quite a few added late. It still is way below last September- 24% less, but its significant to note the number of new listings accelerated. We are through the 18th of october, and we have 5259, which a bit ahead of September's pace. September did finish with upwards of 9700, so the pace was something like 323 a day, while we are currently at 292 a day in October. It certainly doesn't look like any overwhelming number, but it does seem to be growing slightly. Not unexpected, but significant anyway.

Secondly, we are perhaps beginning to see the median price rise take hold. The October median was substantially higher, and so far we are running a bit higher than that, at $115,000. That doesn't mean we will stay there; it often falls off at the end of the month when a large bulk of homes sold, but that didn't occur in September. It stayed fairly high. We shouldn't expect straightline northward movement in the median price, especially considering the time of year we are in, but the bias seems to be higher, even if the number stays relatively flat. Another good sign for the housing industry. It is only an indicator and not a direct route to higher prices, but the median listing price has been climbing, and so far in October is $20,000 higher than last October, and $10,000 higher than last month, which was up already near $10,000 from the previous month. There is either optimism by sellers, or the low end is being cleaned out and higher end homes are being put on the market. Its not a direct indicator, but certainly the higher asking price is a good sign.

Inventory has started to rise a bit; nothing substantial, and statistically almost nothing, but it has gone up three weeks in a row after falling pretty much every week all year. It is our relatively slow time, but in retrospect, September was a decent month for activity, with over 8100 homes sold. I don't expect October to hold up to that level. We are running behind that pace, and I expect it to fall into the 7000's. Certainly not a bad number, its just a slower time of the year. It should handily beat last October's 6,521 sales, but we will have to wait and see. We have started to see the fallout a bit of the economic malaise of the summer gov't uncertainty. It's not terrible, but it would be nice if we were really hitting on all cylinders. Pendings were up slightly, but statistically, they were virtually flat.

The one really bright spot that came out today was a marked increase in the Builder's sentiment index. It is still exceedingly poor, but these were the biggest jumps in a year. If the builders have reason for optimism, perhaps we do to.

I think it is fairly safe to say we are in hibernation mode until the spring buying season. We seem to be holding up pretty well, but I don't see any fundamental changes to the housing market locally until we get to the high demand months. What we do want to monitor is new inventory; it has remained exceptionally light all year, which has allowed us some room for recovery. If we don't have any great changes in the trends, we could have a very strong market going forward in 2012.

Pendings and Active with Contingency Rise

Inventory Rises slightly as expected

Pending: 11,218 ( +236 from last week)

Pending Sfam: 9,793 ( +179 from last week)

AWC: 7,724 ( +170 from last week)

AWC Sfam: 6,683 ( +127 from last week)

Active: 19,594 ( +114 from last week)

Active Sfam: 15,369 ( +120 from last week)

Closed: 10/3-10/9: 1,264

Closed sfam: 1,103

No commentary this week; nothing really interesting with these numbers.

ARMLS STATS 10/4/2011

***September Sales Tops 8,000***

Median Prices Sharply to $113K- highest of the year.

Inventory rises again as season fade in buying activity hits

Pending: 10,982 ( -1056 from last week)

Pending Sfam: 9,614 ( -929 from last week)

AWC: 7,554 ( -234 from last week)

AWC Sfam: 6,556 ( -188 from last week)

Closed 9/26-10/2 2,760 ( +1195 from last week)

Closed Sfam: 2,376 ( +1029 from last week)

CLOSED MONTH OF SEPTEMBER: 8,020 (+19.7% from Aug.2010)

Active: 19,480 ( +184 from last week)

Active Sfam: 15,249 ( +113 from last week)

New Listings in Sept.: 9,583 ( September 2010: 12,841; August 2011: 10,292) -25.4%

Median Price: 113,479 ( +$4,479 from August 2011) 4.1% increase

September Sales finished fairly well, as the sales numbers look to have topped 8000. That is very good for September, but is definitely down from the excellent month of August. It is not extraordinary, but its is a sustainable number for the slow season. Continued sales in the 8000's for the rest of the year would put us at 12-13% increase. I think that is fairly likely to happen. This will end up being a pretty fair year for sales, i think.

Maybe more importantly than the number of sales is the fact that the median price rose somewhat unexpectedly. I should say we have been expecting a rise for quite a while due to market forces, but it has stayed flat, so we had just about come to accept that. Now, we had a sudden price rise in a relatively quiet sales month, and it raises some eyebrows that maybe are going to head in the right direction on prices, given inventory levels, and what is another strong indicator of higher prices: a higher median listing figure. That number has been rising for several months now, and it went up almost $7000 in September from August, and its actually $10,000 higher than last September. That is also very significant, as it does show either lower priced inventory is being cleaned up, or that sellers are more confident in their pricing, but as I have said on more than one occasion, it is likely a mix of the two.

We are entering the Autumn doldrums for sales, and it is starting to show up. September sales were a bit slower, and that is being followed now by lower pendings and a slight uptick in inventory. This was expected, but we expected it to happen in July, so we have had a good extra quarter of inventory reduction. I expect inventory to build at slight levels for the next few months, maybe take a breather in December, before rising a bit in January. Come February though, I do expect us to start burning inventory off, as buying demand picks up. It has been mentioned before in this blog, but February and March are key demand months, and what little excess inventory is currently on the market will quickly be absorbed by demand in the spring buying season. This will spark some price increases at that time.

It really is too bad I didn't post in the fourth quarter last year, so we could compare trends, but we did seen inventory build through that time frame. Sales are stronger this year, with less inventory coming on the market, so we will build but not quite as quickly. I do expect a strong buying season in 2012. I think that our overall economy is getting better, even if it is at a slower pace than any of us would like, and I do think there will be more confidence in buying at the price levels we are at. The median price increase is indicative of a better confidence level, and relative scarcity of available housing, and I think we will see even more confidence by the time springtime rolls around.