Some additional encouraging news...

In an article in the sometimes under appreciated East Valley Tribune, it is noted that builders in the Valley continue to shed inventory, by selling about twice as many homes as they are pulling permits for. It is short term painful for all in our industry, whether you have land to sell, or do drywall, or are an engineer. The builders are correcting their oversupply, and October Sales new home sales, while not flashy at 3159, registered the highest number of sales in 7 months. Not a huge number, by an means, but a good solid stable number. I don't think anyone expects that November new homes sales will match october, so we might have a let down there, but overall, we can start to see where builders may be in a position of recovery if demand for new homes at newly affordable prices, I might add, hold up. The word is still out on November resales, and whether they can hold much of the momentum of a decent October.

I tend to focus on the broad home sales numbers a lot, which may not directly interest those of you interested in land sales, but it has a huge tie-in. One, this new home sales number is a great indicator whether or not builders will be buying land in the near future. The fact that they are slowing permits down means that they are also going to be slowing down buying new land to dispose of lots they already own. This is a negative obviously for our industry, as it is slowing our sales down massively. But, the light at the end of the tunnel is that the builders are making headway, and should be back on track to buy dirt as they deplete what they have. It is big ship, and it takes time to turn, but as I have said many times on this blog, the builders have pricing power, and have the ability to turn it around before the resale owners do, to a large extent. Buying new homes for reasonable prices, as opposed to resales at higher prices, is what convinces many first time homebuyers to get in the water, in my opinion. Well, the 2005 market killed that, when new home prices were driven through the roof. Builders have recognized this and are marketing homes at some pretty fair deals for consumers, and will continue to do so, until the demand catches up. There is light for our market in 2008, as long as there are no further surprises in the credit markets.

MLS STATS 11/19/07-11/25/07

The Thanksgiving Holiday week stats are in; nothing unexpected. A little short on sales, as the week is not a popular one for closing escrows. We will see what the last week brings. The last week could peter out a bit, and we could end up with poor sales for the month, but let's hope not. There is an article out today about national home prices being down, but the home price level being down was just about a given in a market that we are experiencing now. Home prices come down to attract buyers, and that is what is happening. Many, many of the homes on the market (not to mention land) is significantly over-priced to sell in the current market. It does not help. Here are the numbers for the week.


Pending Sales: 4195 ( -4 from last week)

Pending Sales + AWC 4701 (+5 from last week)

Closed Escrows 563 ( -232 from last week)

Active Listings 57378 ( -389 from last week)

Month to Date Closings 11-1-07-11/26/07 2265

A couple of notes on these numbers. Obviously active W/contingency contracts are holding up, even slightly better, but just slightly. Still, that is positive considering the season we are in. Sales are down from last week, but it was a short holiday week. The pace of the last week of the month's sales in October was 1200+, and I am not sure we will see that number, but something approaching 800 would put in us very acceptable territory for November. A 1000+ would be a nice surprise. We will just have to wait and see if we finish November strong. At least we are holding up though, as November could have been reasonably expected to be a lot worse.

MLS Resales 11/12/07-11/18/07

Resale numbers for the past week are in. There is nothing spectacular to report, other than the numbers are showing some resiliency at slightly better levels than had been prevailing as of late.

11/19/07 Pending Sales: 4199 (+0 Change from last week)
11/19/07 Pending + AWC 4696 (+8 from last week)
11/12-11/18: Closed Escrows 795 (+288 from last week)
11/19 Active 57767 (+192 from last week)

The number of sales is interesting; this is a middle week of the month, but the number of sales is actually pretty strong compared to normal. The other interesting thing is that the number of AWC contracts is 496; it is about 10% higher than what I normally see. The total number of escrows is equivalent to normal, but as I have said, if November sales equals October sales, I will be fairly enthused. Right now, we are on a good track, but this week's sales are likely to slow down due to a holiday week. As of now, we are tracking fairly close to October sales. The number of actives continues to oscillate in the 57K's, a number I would like to see start falling. Even with increasing sales, the number of homes going on the market is not falling.