*SINGLE FAMILY LISTINGS FALL  BENEATH 10,000*

Pendings rise sharply

Median Price still rising

New home sales also continuing stronger trend

Pending:                   12,671                ( +494 from last week)

Pending Sfam:          10,995                ( +431 from last week)

AWC:                       7,890                ( +160 from last week)

AWC Sfam:              6,858                 ( +141 from last week)

Active:                     12,884                ( -27 from last week)

Active Sfam:              9,986                ( -83 from last week)

Closed 4/30-5/6:       2,278                ( +224 from last week)

Closed Sfam:            1,917                 ( +185 from last week)

Median Price:          $145,000            ( +$7000 from April)

Ryness Report New Home Index:   .82   (last year this week: .38)

I don't have much time to write today, but here are the stats.  The most notable, but perhaps not significant in its change from last week's numbers, is obviously the number of single family listings falling below 10,000.  That is amazing when you go back and look at how many listings, and how many decade overhang the naysayers were saying the inventory was.

There was also a mention as Phoenix shooting up the charts to be the second best housing recovery market in the country.  It has also jumped to number 5 in commercial construction spending, so there  really is some substance to this recovery, across a broad palette.  It is getting to be such that there are not particularly any good deals in residential real estate; the only market that hasn't had substantial price jumps yet is land; that too will come shortly, as is becomes more apparent the recovery is for real.  Land asset prices are still fractions of what they were, and more importantly, fractions of what they actually should be.  Prices are not going to return quickly to the 2005 level, obviously.  But with land in many cases being 10%-20% of those prices, there certainly is room for improvement- and profit.  Land only has to go back to 50% of 2005 values for someone to make 200%-300% return.  Take for example, land that in 2005 was $100K an acre.  That implies a home of $400K-$500K; obviously those areas are not going to see the price return to that number.  However, I have a specific example of homes in that area already being $200K-$250K right now.  That implies the value should be close to half of the 2005 price, right?  Well, yes it does, as the land component cost could be as high as $50,000, and the number would still work.  

What if I told you that kind of land was still available in places for $10,000-$15,000 per acre?  It is. For builders, they should be acquiring while its cheapest, as they would probably double the amount of money they make on the construction of the house with also receiving a profit on the land.   When builders become active again, you will see the prices pushed higher, as they make their money on the construction, not on the dirt.  If they make it on both, its a nice bonus.  

New home construction at the custom home level is only beginning to ramp up; we have not felt the effects of the small builders putting up spec homes yet, or even buying dirt to put up spec homes.  Just like in the home market, when investors realize the the inherent imbalance of prices with potential, prices will change. 

That's all I have time for today, but we have a lot of reason for optimism here locally.  Prices are being pushed sharply northward, and it doesn't look like a false start.