A quick report on the month of August initial MLS SALES and INVENTORY numbers:
Residential Sales in August 2011: 8730 (Single Family residences and Condos)
Residential Sales in August 2010: 6,963
Change: up +25.4
Residential Sales July 2010: 8,493
Active residential Listings: 19,278 (Single Family residence only inventory 15,181)
September 22 2010* 38,804
*I don't have the stats from the exact week. (I have to apologize here; I took a hiatus last fall doing the stats, so I have a big gap in the weekly pending and active numbers starting in September that last until February this year. I am sorry.)
New Inventory on the Market in August 2011: 10,101
New inventory on the market in August 2010: 12,972
Difference: 2,871 (-22.1 %)
As we can see, new (resale) inventory is also much lower. When sales are up 25% and new inventory is down 22%, you can see why we have been burning inventory all year long. If you go back and read through the stats for 2011, you will see a steady reduction in inventory all year long. We are now
As we can see, the inventory and production numbers have been very good in the Arizona Regional Multiple Listing Area. We have slashed inventory in half from last September, and it appears that maybe the median price slide has been stabilized as well. A good deal of how low that is is the result of rebounding condo sales, at very low prices, since banks are loathe to loan money on them. We have seen homes that once kissed around the $175K mark go for $25,000. Its inevitable that the median price will be dragged down by this, which is why I think the sliding inventory numbers are the most important aspect. I have said it several times in back posts, but if we continue to sell homes through this slow period at the rate that we are, inventory is going to be about where it is coming February when a purchasing spike occurs. If we get to February and we have normal seasonal demand, I see no direction but for prices to rise through the strong demand period that runs from February through June. Inventory is just not there to absorb the demand.
These numbers do a shift around a bit for the next few days, but it still shows a very solid month of August for sales. I had some expectations that perhaps August was going to fall significantly below July's numbers, but we seem to have outperformed. I do think Arizona fundamentals for sales growth are better than some places: we probably still have an influx of people and jobs, even if they aren't terribly high paying jobs; and home prices are reasonably affordable for people. We may also see the "rent effect" start to hit Arizona, with rents going higher, some people will start opting for the purchase of a home, even if they are still tentative, since the cost of renting is blowing past the cost of buying right now. I do think fundamentally that Arizona is recovering, and that even this wave of foreclosure sales they keep talking about comes to fruition, we have reached such a low level of inventory that it would be difficult to see this swamping the boat again. Demand has returned, inventory is low and getting lower, and prices will eventually be forced upward, or builders will start building to meet demand.
Well, I promised I wouldn't go into an in-depth analysis, so I am going to give it a rest here. I am moderately optimistic about the housing market given another strong month when weakness might have been expected. Its surely better on all fronts than 2010, and we have now reduced inventory to very manageable levels. There is still a crisis of confidence out there over the economy, but there is no doubt that real estate is stabilizing.
