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.

3/1/11 ARMLS STATS

February Closings Up 10 % + over 2010 in ARMLS

Overall inventory lower; Single family almost identical to 2011

Sales rate in first two months of 2011 up 13.2%

Prices sharply lower than last year; cheaper homes fastest selling category?

New Statistic: Monthly Listings trending lower? This year so far, yes.

Monthly Active to sales ratio: Overall-4.75, Single Family-4.59

Pending: 12,020 ( -669 from last week)

Pending Sfam: 10,233 ( -588 from last week)

AWC: 6,569 (-56 from last week)

AWC Sfam: 5,660 (-42 from last week)

Active: 33,670 ( -672 from Last Week)

Active Sfam: 27,365 (-553 from Last Week)

CLOSED 2/21-2/27/11: 2,779

Closed Sfam: 2,351

Closed February: 7,078 (+657 from Feb 2010)

Closed Sfam Feb: 5,958 ( +555 from Feb 2010)

Monthly Listings: January 2010: 13,219

January 2011: 12,573

_________

- 646

February 2010 12,902

February 2011: 10,412

__________

-2490

In 2010, the number of new lender listed properties was 6884; which is not as high a number as I would have expected. That means out of 26,121 new listings in those months, the percent of lender listings was about 26.3; high, but not as high as I would have expected frankly.

In 2011, the number of lender listed properties for that same period was 6547; lower, but as a percentage of total listings, higher. That's not really a bad thing. There were substantially fewer listings in the same period: 3,136 due to a sharp drop in February especially. This drop was not attributable to a decrease in lender listings; there were still 3147 lender listings in February, slightly lower than January, but in proportion to the normally lower February listings compared to January. Lender listings made up a much higher proportion of listings, which means normal or short sale listings were down.

Short sale listings were down, moderately, which is good, but I think what that leaves us with is probably more encouraging: fewer home sales from other people. If less people try to sell their homes, other inventory will get cleared faster. I have no idea what is behind this reduction in listings; they could pop back in March and April; it could be a trend that the worst of the "have to sell" pressure is over, and more people are just going to ride it out in the home they are in. Its too early to tell, but we are 1/6 through the year, and we are average substantially fewer listings than last year.

On a less positive note, we also note that the average home price is substantially lower than it was a year ago. Does this mean housing prices for the same house have fallen? Not necessarily. It could mean we are seeing lots of lower priced housing sell; it could mean we are seeing less higher priced housing sell. It could mean that more homes in less desirable areas that weren't moving before are now selling. It could mean more fixups are selling than ready-to-go homes; implying investor activity. There needs to be more qualitative investigation done on this as the trend line on the sales doesn't really follow the normal ticking down of pricing that you see when prices are falling. It looks like it would be or at least include a rapid set of sales of homes in lower price categories. I am going to try and break that out, but I don't have any easy answers without some deep research by zip code.

We do see some positive trends in overall sales numbers, in relation to previous months, as well as year over year; we see inventory is sliding a bit right now, although last year March and April were very new listing heavy, so we will be watching that, and we are not at a terrible sales to inventory ratio.

The negative of course is the pricing; it is substantially lower than last year, and we are average about $110,000 per house sale. That is down 11% from the same period last year. Not really very good, but I don't really know why at this point; all other sales stats point to what should be some price stability; we are not overburdened with inventory, demand is as good as its been for a while, and quite honestly there is a different tone to where we are in the economy than there has been for quite some time. I am going to point a finger at the banks and say that it is probably tougher for anyone to buy a home that is of any significant price, and that is causing some of this deflation in the move up market. That is a guess, but I think i am probably not far off on that. They are driving their own prices down by kicking people downward into smaller and cheaper homes due to more stringent lending requirements; that also drives house prices down, as there are less available buyers for given price categories; except downward. That is my guess.

I think there are other issues as well: we have been in our doldrum season, and there is some price slippage during that time; the slow recovery in higher income occupations will drive people toward not purchasing move up housing; it could be people's general lack of faith in housing, although the statistics of number of buyers is not supporting that. I think we will see good sales in March, and I wouldnt be surprised to see some significant price moves upward by April. It could be that current pricing is a lagging indicator of the amount of inventory we were saddled with at the end of last summer's disappointing sales.

On the news front, I was pleased to see Dr. Doom Marc Faber say it is time to buy housing. (video) He is notorious for being a gloomy gus, so anything positive from him speaks volumes. There has been some news about national pending number fell in January, but if you have relatives in the northern part of the United States, you are probably not surprised. The weather was simply atrocious for much of the country in January and February, with deep snow and blizzards socking people in and discouraging homebuying. We will see those numbers improve stats in March and April, would be my guess; most of the people who were ready to buy will still buy eventually.