ARMLS STATS Week of 2/10/10

Buying Activity Rising, Pendings Up Sharply
Actives Rise slightly
Spring Homebuying season about to begin?


Pending: 11,837 ( +1,054 from last week)
Pending SFam: 10,170 ( +900 from last week)

AWC: 6,622 ( +296 from last week)
AWC Sfam: 5,668 ( +249 from last week)

Closed: 1,137 ( -921 from last week)
Closed Sfam: 956 ( -818 from last week)

Active Listings: 35,189 (+384 from last week)
Active Sfam: 27,570 (+273 from last week)

The number of pendings rose sharply, indicating buyer activity is leaving the winter doldrums behind. The number is well below its 2009 highs, but certainly higher than during the same week last year (8445), and if you include the eventual pending sales of the active with contingency contracts, the buying activity is much sharper.

The amount of sales being slower is of course expected, as the first week of the month is typically much less than the last week, but is approximately 20% higher than last February of the same period. February won't be a great month for sales, but you do see sales building for March. I am expecting that we will see pending sales continue to grow toward 13,000 by the end of the month.

It is still too early to tell how strong this year's recovery will be, but the early results are encouraging. We have had growing inventory for quite a few months now, but that will likely peak out here in February. It had already started falling by this time last year. It is something that we will have to watch, as an overly strong supply of resale homes can damper the prices that we would all like to see continue to climb. I do think we will see the inventory fall through the spring at this point. The general demand looks to be higher this year, and we may not see as many homes coming on the market either. We may see short sales start to slide through the process quicker too, as banks have become better at processing these. As of now, the AWC contracts that contain short sales keeps climbing and I expect it to pass 7000. There are still many many short sales waiting to happen. That is mixed news, as you like to see real sales that occur quickly, but most of those do eventually turn into sales.

ARMLS STATISTICS FOR 2/2/2010

January Sales: 5,820
Pendings Rose through January
A look at last January's Statistics

Pending: 10,783

Pending SF: 9,270

AWC: 6,326

AWC SF: 5,439

CLOSED: 2,058

Closed Sf: 1,774

Active: 34,805

Active SingleFam: 27,297

Closed January: 5,820

Closed Single Fam: 4,988

This was your typical January: sales slow, inventory rises, pending sales start to show life, and everyone gets in a tizzy about how the market is about to collapse again. Don't be fooled by the short term aspects of home sales in January. January is a dormancy month, always has been, always will be. Also, you will note that pending sales have risen from the earlier part of the month, even though there was a pretty big last week of sales accounting for much of the activity. Why is that relevant? We don't have numbers from last week, but typically pending sales tend to fall after the end of the month sales report as many pendings convert to sales. Even with this normal drop, the pendings are growing from the earlier part of the month. That is a sign of demand strength as we climb out of the winter doldrums.

Lets look at last year's statistics:

We are 25% higher in pending sales, 600% higher in AWC contracts (a mixed blessing, but a contract is a contract), and down 33% in the number of listings. Closings were 20% higher as well. We are in far better shape than we were last year at this time. We can already project higher sales for February and March due to the larger number of pendings and AWC we are starting with. We won't know how well we are doing until late February, but I do expect to see pendings climbing by that time. Where inventory will be is another matter. We seemed to have hit a wall in inventory in late summer last year, but we are going into an inventory shredding portion of the year; I don't know if inventory levels will fall as far as they did last year. Prices do seem to have stabilized and even started to inch upward at this inventory level, so if inventory starts to fall significantly in the spring, we could see prices rise. We just don't know how many foreclosures are still out there. There are some, but are they going to be a significant segment of available inventory? That is the big question. I think we will shed some inventory over the summer, perhaps falling below 30,000 homes again, but I think that might our "normal" level of inventory. We will just have to watch it play out.

So, there is a lot of reason to be optimistic going into the spring, as sales should start to increase, and the inventory level is at very manageable numbers right now. They should start to decline a bit by March, and if we do, we can expect prices to start to rise in a substantial manner. This will lead to some restored confidence in the housing market, which will bring new buyers in as well. The trending is actually pretty good for us to have a decent year.

ARMLS STATS 1/11/2010

2009 Sales Top 92,000 Closings

PENDING: 10,125
Pending Single Fam: 8,823

AWC: 5,955
AWC Sfam: 5,140

Closed: 1,029
Closed Sfam: 881

CLOSED 2009: 92,336
Closed Sfam: 81,425

Active: 34,199
Active Sfam: 26,756

Activity is very slow during the first few weeks of January, so not much to report. The most interesting thing is that we topped 92,000 sales in 2009. Here are the annual sales in the last decade:

2000: 55,400
2001: 62,523
2002: 68,411
2003: 79,512
2004: 98,294
2005: 104,133
2006: 74,106
2007: 54,231
2008: 59,233
2009: 92,336

One could look at this and say 2009 was the third best month of the decade, and that obviously isn't true. The sales were there, but of course the prices were much lower. It is encouraging that people have faith in the market, and are buying. We have had a massive deflation, not just in real estate, so we have to keep that in mind. Food prices have been falling, your cost of buying consumer electronics falls all the time, the price of clothing has come down substantially as suppliers have had to accept less profit, and the price of furnishings has decreased. Energy prices have fallen from their peak, but they have been rising again. Unfortunately, your fees and taxes have gone up, please remember to thank your elected officials....By and large though, Home prices have fallen along with everything else, and in addition slipped further due to its falling out of favor (temporarily) as an asset class. That will change, as it is a necessity none of us can do without.

The point is, we have had a very good year for sales; prices may not be there yet, but we at least have demand for the inventory that is there. We still have a great situation in this state- fine weather, a growing diversity in our economy, fairly good infrastructure, and proximity and one might say ground zero for the population migration of the baby boomers. There is much to be optimistic about, but we are just not out of the woods yet on the housing issues, as the financial crisis ruined the trust relationships banks and business had. Banks won't lend, businesses won't expand because they are afraid of the economy. We are still working through this, and may be well through 2010. It will be interesting where we are in March in terms of demand for housing; it is going to give us a good indication of the speed of sales recovery for the rest of the year.