January Sales Flat, but Median Price up again.
Pending Sales Rise, Inventory falling.
New listings down sharply from January 2011
Listing Prices show sharp gains
Pending: 11,281 ( +254 from last week)
Pending Sfam: 9,760 ( +197 from last week)
AWC: 7,445 ( +196 from last week)
AWC: 6,448 ( +177 from last week)
Active: 17,391 ( -387 from last week)
Active Sfam: 13,567 (-321 from last week)
Closed: 2,477 ( + 928 from last week)
Closed Sfam: 2,091 (+ 700 from last week)
Closed January: 6,449
New listings in January: 9,957 ( -2618 from January 2011)
Median Sales Price: $120,000 +$ 2,344 from December 2011
+ $10,000 from January 2011
Median Listing Price: $140,000 +$14,000 from December 2011
+$21,000 from January 2011
January sales were a little slower than last year, as expected, given the low inventory we are experiencing. They were actually just about flat, but down slightly. Take that with a grain of salt, however, its not a signal of a worsening housing market. Home prices were up sharply from January of 2011, with a $10,000 increase. Prices were also up sharply from the preceding month of December 2011, showing about a $2350 gain. Inventory also continued to fall, due to increasing demand, as pendings rose sharply again, as well as a falling base of new listings hitting the market. Listing activity was down over 20% from a year ago, falling by 2618 listings for the month of January. Total residential listings is only 17,391. Compared to February 14th of Last year, when there were 34,342 listings. There is pressure on inventory and pricing in the residential market.
We are fast approaching our busy season in the residential market, and I want to share some anecdotal evidence. I was out on Saturday afternoon looking at some central phoenix area homes with an investor client, and out of the 10 or so homes we looked at, about half either had buyers already there looking, or agents with buyers waiting for us to leave so they could see the home themselves. That is fairly remarkable, as I don't recall every encountering buyers at such a rate on vacant properties. Perhaps that is an isolated incident, which is why I am calling it anecdotal, but I have a feeling we are seeing that happen all over. I am fairly convinced. Why? I went back to a property yesterday to follow up on it, and more buyers walked into it while we were doing a re-examine of the property. If you are an agent, I would be curious if you have encountered any of the same kind of activity.
Lastly, it does appear that the new home market is starting to perk up as well. I discussed the index moving forward at a good pace, and the latest new housing report from Ryness showed more of the same. There were 46 new home sales in its sample subdivisions last week and no cancels. The traffic rate to sales was 10:1; last year at the same time, the traffic to sales rate was 23:1. That shows there is some confidence by the buyers walking into the subdivisions. Its good to see them do better, and it is likely to continue, as the resale market continues to drive upwards in price, and the inventory continues to slide. For many families, an apartment or a condo is a poor option, and renting a house is in many cases twice the cost of buying a new home, so we should see some strengthening activity for the builders continue into the buying season.
One last little thing: listing prices have continued a sharp rising trend, as sellers are gaining more confidence, and as the lower priced inventory dissipates. The condo market is drying up, and the price for a lot of that clearance inventory has already doubled in price. Where many condos were available for the $20,000's of dollars before in central phoenix, it is difficult to find the equivalent for less than $50K now. There were a number at that low ebb during the fall, but the price is being driven quickly forward by lack of inventory.
I do expect sheer volume of sales to be lower through this buying season, as there just are not the buying options available to investors that there were last year when we had such high volume of sales; there is no inventory, however, so that also means we will see prices rises as buyers start to compete. Some overflow can be absorbed by new builds, but not all. I would expect to see some central city property rise in price perhaps more sharply than the overall market, since finding a new home is less of an alternative. Condo prices will likely be stronger to the point that people decide that if they can find a house for not much more, they may go that route. Prices are still incredibly reasonable for a home, with low interest rates, which will encourage many people to buy if they can, as rents are still very high.
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