ARMLS STATS 9/13-9/19/10
Pending: 10,250
Pending Sfam: 8,840
AWC: 6,203
AWC: 5,319
Closed 9/13/-9/19: 1,452
Closed Sfam: 1,214
Closed Sept 19: 3,205
Closed Sfam: 2,668
Active: 38804
Active Sfam: 31,370
Closed August: 7,221
Closed Sfam: 6,070
I apologize for the hiatus; I have recently opened up an office again, and moving that, along with being fairly busy, caused this blog to lose its place in the pecking order.
MLS stats ending August were up slightly from July, but were generally flat, as we trudged through a slumping economy this summer. One bright spot might be that it appears short sales (as denoted by AWC contracts) are declining from their peak numbers approaching 8,100 in May. Banks are getting better at handling short sales, and it might be a sign that short sales may be on their way to winding down. The supply of short sale homes is an indication of market health, and as these dissipate, it shows less homeowners are experiencing economic distress. It is a number we will continue to watch, but it is generally a positive trend.
Less positive has been the gradual increase of inventory this summer. It has been a softer summer for sales, due to what we can now see as the economy having lost a lot of traction over the summer. The optimism of a clean turnaround early in the year gave way to the reality that employers were not yet hiring, and still aren't due to economic uncertainty. The fact that these tax hikes are still planned for job creators (the $250K+ income crowd) seems to have stunted hiring, and raised fears of renewed recession. It does seem like we have stabilized, but the continuing uncertainty is still restraining job growth. The republicans' expected sweep into power in the upcoming elections are probably the best hope for job creation, as gridlock has always fostered expansion. This was in retrospect an underperforming summer for housing. We will have to see if the fourth quarter brightens up, but the trend has been lackluster.
It does seem like homes at the lower end are firming up, while the higher priced move ups and luxury home market is still fairly stagnant. I think we will see it that way until we see some broad reasons for optimism from the economy: increased hiring, stock prices, stability.
We did see a surprise sharp jump in new housing starts in August, which I will detail next week. We might be where we are seeing lagging indicators now, and that the economy is turning up for more people than we realize, but it will still be 2011 before we have seen substantial gains in the housing market and likely fall to less than 9.5% unemployment.
I would expect that we will close in the neighborhood of 7000 homes in September. It is not a great number, but it will have to do for now. We didn't see it coming in, but there was a sharp fall off in buyers over the summer, due in part to the end of the tax credit, but also to the relatively difficult process of qualifying for a loan. Unless you were buying fannie mae or freddie mac or getting an FHA loan, you had to bring some serious cash to the table. This of course stunts closings.
The hope is that we can stay at current levels through the fall and into December. Those are traditionally very poor months, but if we see some stability through 4th quarter, economic factors will bring us into 2011 at a good pitch, and we are almost certainly going to see rising levels of optimism after elections this fall. Gridlock creates certainty, and that is proven to be the best case scenario for the economy in the past.
Tuesday, September 21, 2010
Tuesday, August 3, 2010
ARMLS STATS FOR JULY
July ARMLS statistics August 3, 2010
Pending: 9,859
Pending Sfam: 8,481
AWC: 6,602
AWC SFAM: 5,640
Closed July: 7,100
Closed Sfam: 6,012
Active: 36,037
Active Sfam: 28,941
July numbers, as expected, were down considerably from June's peak. June's numbers pulled many sales forward, stripping them from July sales. Many sales of properties that were in line to receive the home buyer tax credit, especially short sales, had to be done in June, and as such there was great pressure to get them done by then. The hangover effect of this is pretty apparent in July's numbers. It is not unexpected, but I think that it appears that July was still weaker than expected. We will have to wait and see if this is a trend, but these are not numbers that I am happy with. We will want to see a rebound in Sales in August, but I would expect that we will not see over 8000 sales per month for the rest of the year, other than September.
New home sales might be a culprit in this as well. Builders have become very aggressive, and are able to compete on price pretty well. As people start comparing the available used to new inventory, new inventory starts to look decent, and builders success in selling has a negative effect on the prices of pre-existing inventory and the inventory itself. That being said I don't think that new home sales were so great that they affected existing sales this much. It was a bit of a slow month, I think, no way around that. We will want to see some pick up in August.
Pending: 9,859
Pending Sfam: 8,481
AWC: 6,602
AWC SFAM: 5,640
Closed July: 7,100
Closed Sfam: 6,012
Active: 36,037
Active Sfam: 28,941
July numbers, as expected, were down considerably from June's peak. June's numbers pulled many sales forward, stripping them from July sales. Many sales of properties that were in line to receive the home buyer tax credit, especially short sales, had to be done in June, and as such there was great pressure to get them done by then. The hangover effect of this is pretty apparent in July's numbers. It is not unexpected, but I think that it appears that July was still weaker than expected. We will have to wait and see if this is a trend, but these are not numbers that I am happy with. We will want to see a rebound in Sales in August, but I would expect that we will not see over 8000 sales per month for the rest of the year, other than September.
New home sales might be a culprit in this as well. Builders have become very aggressive, and are able to compete on price pretty well. As people start comparing the available used to new inventory, new inventory starts to look decent, and builders success in selling has a negative effect on the prices of pre-existing inventory and the inventory itself. That being said I don't think that new home sales were so great that they affected existing sales this much. It was a bit of a slow month, I think, no way around that. We will want to see some pick up in August.
Tuesday, July 6, 2010
ARMLS STATS June 2010
****JUNE CLOSINGS HIT 9,310****
Biggest Sales Month since August 2005!
Inventory Flat and Pendings showing downward trend
Pending Sales: 10,477 ( -997 from last week)
Pending Sfam: 9,036 ( -862 from last week)
AWC: 7,303 ( -244 from last week)
AWC Single Fam: 6,258 (-213 from last week)
Closed 6/28-7/4 2,711 ( +792 from last week)
Closed Sfam: 2,333 ( +698 from last week)
Active: 34,226 ( -14 from last week)
Active Sfam: 27,246 ( +65 from last week)
CLOSED JUNE: 9,310
Closed Single fam: 7893
June Sales finished stronger than expected, topping 9,000 decisively. June may be our peak for the year, as tax credit driven sales are now mostly used up. The sales numbers were excellent, however, and there have not been as many as 9300 sales since August of 2005, when there were 10,003 closed listings. That was the boom year, obviously, and the median price was literally twice what it is now, but we are showing good demand for home purchasing in the valley. Even if it falls off somewhat, we will be okay.
That said, I do expect that we will not maintain this level of sales through the summer. There is simply not going to be as strong of demand with the expiration of the housing credit and lackluster performance in the creation of jobs by industry; consumer confidence is not what it should be for a strong recovery to occur. Single family homes are also facing increasing competition from competitively priced new home sales. The builders are seeing opportunities again, and are working at taking their share of the market. My feeling is that we are going to go sideways a bit until job creation picks up. Business may not cooperate with this, until after the elections in the fall. I am not sure that we are seeing Business embrace the Democrats plan for them, and they take a wait and see approach hoping that a more business friendly congress is swept into office in November before making major investments in new hires. It is still a big question mark. What we have heard is that big business' coffers have never been more full, but so far they are not taking the plunge and investing it in new production.
I don't say that to be gloomy; this was not going to be a rocket to the moon recovery by any means. We as a metro area are growing, and so far we are absorbing the inventory pretty well. The average price of a home sold went up from May's $177,288 to $179,976 in June; it is also up from first quarter's $176,518; perhaps it is showing some movement in the upper end, pulling average prices higher. Certainly, the bulk of the activity is in the lower reaches of the market, which is why we see the median number going lower, but the gross dollar sales and the average are moving up, and that is something we should be encouraged about.
While the sales in June should be celebrated, the numbers that bear watching are the pending numbers. How far are they going to fall? What kind of activity are we going to have for the next three months, which are traditionally the last three strong months until march rolls around again? What are prices going to do? There are questions marks. We have 3.6 months supply of inventory, and it is stubbornly sticking there. It is not too high, but I don't know anyone in our industry who wouldn't like to see about 5000 listings peeled off there overnight; it would encourage higher prices and more construction.
We can be happy for the moment that we have reached a level of demand we haven't seen for almost five years. We have shown good consistent high demand this year, and it seems like it is going to continue. We have likely reached a short term peak for this year, but if we can stabilize not far below the levels we have been at, we are still going to have an excellent year.
Biggest Sales Month since August 2005!
Inventory Flat and Pendings showing downward trend
Pending Sales: 10,477 ( -997 from last week)
Pending Sfam: 9,036 ( -862 from last week)
AWC: 7,303 ( -244 from last week)
AWC Single Fam: 6,258 (-213 from last week)
Closed 6/28-7/4 2,711 ( +792 from last week)
Closed Sfam: 2,333 ( +698 from last week)
Active: 34,226 ( -14 from last week)
Active Sfam: 27,246 ( +65 from last week)
CLOSED JUNE: 9,310
Closed Single fam: 7893
June Sales finished stronger than expected, topping 9,000 decisively. June may be our peak for the year, as tax credit driven sales are now mostly used up. The sales numbers were excellent, however, and there have not been as many as 9300 sales since August of 2005, when there were 10,003 closed listings. That was the boom year, obviously, and the median price was literally twice what it is now, but we are showing good demand for home purchasing in the valley. Even if it falls off somewhat, we will be okay.
That said, I do expect that we will not maintain this level of sales through the summer. There is simply not going to be as strong of demand with the expiration of the housing credit and lackluster performance in the creation of jobs by industry; consumer confidence is not what it should be for a strong recovery to occur. Single family homes are also facing increasing competition from competitively priced new home sales. The builders are seeing opportunities again, and are working at taking their share of the market. My feeling is that we are going to go sideways a bit until job creation picks up. Business may not cooperate with this, until after the elections in the fall. I am not sure that we are seeing Business embrace the Democrats plan for them, and they take a wait and see approach hoping that a more business friendly congress is swept into office in November before making major investments in new hires. It is still a big question mark. What we have heard is that big business' coffers have never been more full, but so far they are not taking the plunge and investing it in new production.
I don't say that to be gloomy; this was not going to be a rocket to the moon recovery by any means. We as a metro area are growing, and so far we are absorbing the inventory pretty well. The average price of a home sold went up from May's $177,288 to $179,976 in June; it is also up from first quarter's $176,518; perhaps it is showing some movement in the upper end, pulling average prices higher. Certainly, the bulk of the activity is in the lower reaches of the market, which is why we see the median number going lower, but the gross dollar sales and the average are moving up, and that is something we should be encouraged about.
While the sales in June should be celebrated, the numbers that bear watching are the pending numbers. How far are they going to fall? What kind of activity are we going to have for the next three months, which are traditionally the last three strong months until march rolls around again? What are prices going to do? There are questions marks. We have 3.6 months supply of inventory, and it is stubbornly sticking there. It is not too high, but I don't know anyone in our industry who wouldn't like to see about 5000 listings peeled off there overnight; it would encourage higher prices and more construction.
We can be happy for the moment that we have reached a level of demand we haven't seen for almost five years. We have shown good consistent high demand this year, and it seems like it is going to continue. We have likely reached a short term peak for this year, but if we can stabilize not far below the levels we have been at, we are still going to have an excellent year.
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