MLS STATS 3/6/2012

***Listings Fall Below 16,000***

February '12 Sales Top Feb 2011 Closings

Median Sales Price rises again

Pending Sale recovering quickly from end of month sales

Pending: 12, 228 ( -224 from last week)

Pending Sfam: 10,539 ( -196 from last week)

AWC: 7,598 ( -113 from last week)

AWC Sfam: 6,633 (-91 from last week)

Active: 15,820 ( -418 from last week)

Active Sfam: 12,289 ( -347 from last week)

Closed 2/27-3/4/12: 2,428 ( +607 from last week)

Closed Sfam: 2,047 ( +538 from last week)

Closed February: 7,281 ( +127 from Feb. 2011)

New Listings Feb: 8,999 ( -1,837 from last year)

Median Sale Price: 122,000 (+2000 from January 2012; +13,000 from Feb'11

Average Sales Price: 166,237 ( +2,100 from January 2012; +10,848 from Feb'11

Unexpectedly, sales for February surpassed last years total, as the extra day we had put us over the top. It was a strong month for sales, regardless, as keeping pace with 2011 would foretell of a very strong resale market. Still, half of all sales were cash transactions, which makes some people uncomfortable, as it implies a heavily investor driven market. I say that lets be content that there are buyers out there willing to pay cash, as the inventory is being cleared up. Money eventually flows to where the best value is, and housing has been that asset. Warren Buffet has even said so. I still did not expect February sales to reach last year's levels, as we just don't have the inventory to sustain that kind of sales rate, unless we have strong increase in prices. We are seeing some price gains, but these are not going to relieve the pressure on inventory as we reach the peak season. A $2000 gain month over month may not see like much, but if you consider that pace over the course of a year, it works out to be about a 20% gain year over year from your starting point. That is significant. I am going to hazard a guess that in the next few months there will be at least one or maybe 2 of a price gain upwards of $3,000 dollars a month.

Prices aside, we have reached a critical point for inventory. We now have fallen into the 15,000's in total residential homes for sale; if sales trends hold, and we have 10,000 sales in march that matches the trend set up so far in comparing to last year, that means we will see 1.5 months of inventory on the market at the end of the month. If current inventory trends stay true, by the time we get to the end of the month, it will actually only be 1.3 months worth of inventory.

I am not going to forecast that; I think that buyers are starting to run into a block wall trying to buy due to lack of inventory to consider, and some buyers will be delayed in their search. Perhaps I am wrong, but I think in March we will not keep up with the trend in 2012 in which sales track 2011. Logistically it looks difficult to do. I do expect prices to continue their gains, however. Pendings recovered from the end of month sales to quickly rise above 12,000 again, which does pace the same as March 2011. Pendings are our best indicator of short term sale success, and it appears we are doing well there.

The median listing price is also rising rapidly, and finished the month $5000 ahead of January, and $25,900 over February of 2011! There are changes coming this year. Its now clear.