***Single Family Listings fall into 14K***
Overall listings barely 19K.
Prices may be rising sharply again this month
Pendings fall as holidays loom
Pending sfam: 9,041 (-229 from last week)
AWC: 7,190 (-123 from last week)
AWC Sfam: 6,231 (-98 from last week)
Active: 19,063 (-250 from last week)
Active Sfam: 14,830 ( -252 from last week)
Closed: 1,743 ( +349 from last week)
Closed Sfam: 1,474 ( +281 from last week)
We have reached a new milestone in the housing recovery for Metro Phoenix, and that is that single family homes inventory has fallen into the 14,000s. That is a significant note, as it shows not only are we at multiyear lows in inventory, going back to at least 2005, but that it gives us room for an upward blip should be we encounter difficulties from Europe. It also puts into question the idea that there is a massive shadow inventory lying in wait out there; we have been moving consistently downward in inventory levels for all of this year, we are now at a point where we could see violent price gains by April if we have a typical spring buying season. I have no doubt that this will be met by some investors making flip properties available, but many investors are going to be collecting excellent rent, so why get rid of a passive income gold mine? No, it appears we are pushing towards an inventory problem here, that can't possibly be met by builders alone, as the available land becomes too far out for people who work in Central Phoenix. We will see price increases, of that I have no doubt. It is too early to make predictions about this month, but we are already running substantially higher than last month on median prices; I am not sure that will hold up, so we will wait until the stats come in at the end of the month before I make the claim of rising prices again. If they are not already here, they will be by Spring, assuming a normal economic pattern.
We also saw pendings drop fairly sharply; not completely unexpected, as new buying activity the weeks before Christmas do tend to peter out. It appears that December will not be as active a month for buying as was last December. This December is going to look a lot like November of this year, with fairly soft sales in the 7000 range. Last year December proved to be an aberration with over 8200 sales, which seemed awfully high for what is supposed to be the middle of the dead zone for housing sales in Arizona.
New inventory coming on the market is obviously, light, as noted by the slide in overall inventory. We can expect an uptick in that come January, but even with that, we are in excellent position to see housing prices regain some lost value locally.
There is some good external news as well regarding housing; housing permits and new starts are improving, along with builder sentiment. This is positive news, as new construction leads to so many great things on the local level. New jobs, new revenue for local government, increased optimism from consumers who see new housing being constructed, and thus, better demand for housing.
The other interesting story is what builders are beginning to see. If they are feeling better about things, it won't be long until they figure out a way to get people financed, and into homes. We are definitely on a better track than we have been, and I think we will start feeling effects of that even in February, when buyers are out pursuing property. March is a big month for closings, and that activity has to start in February for that to happen. New construction is critical to a strong Arizona recovery, and we may be on the cusp of that happening. We are now only about a month away from the green pastures of the strong housing season in Arizona. It is something to be very excited about!
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