Monday, March 24, 2008

The market... as compared to national news

This morning there was a release of news related to the national real estate market. Read the full article here.

I'll do some side by side comparisons as compared to our local data and what it shows us.

WASHINGTON (MarketWatch) -- Boosted by a record decline in prices, the U.S. housing market showed signs of stability in February, with sales of existing home rising modestly for the first time in seven months, the National Association of Realtors reported Monday.

Resales of U.S. homes and condos rose 2.9% to a seasonally adjusted annualized rate of 5.03 million, ahead of the 4.85 million pace expected by economists surveyed by MarketWatch.

It's the strongest sales pace since October. Sales are down 23.8% compared with a year ago.

Sales are down in the Kingman area 52% compared to a year ago. I've found that historically, our local market lags as compared to reports for larger market areas. If the west region of the country says one thing heading one direction... in Kingman our market seems to lag behind a month or so. We'll have to wait and see if this continues.

Also keep in mind that I don't do sales forecasting for the local market.

Inventories of unsold homes fell 3% to 4.03 million, representing a 9.6-month supply at the February sales pace. Inventories are not seasonally adjusted, but a decline from January to February is unusual.

Our local inventory fell 7% from the previous year. I'm not sure how much of the percentage drop is due to cancellations and/or expirations but likely that figure is a large part of the rate decrease (sales are incredibly weak after all).

At our local February sales pace, the figures indicate that we have over 31 months worth of inventory. This is probably not entirely a true indication of where we are at, it's awfully scary though that our inventory problem is as bleak as it is.

The median sales price plunged to $195,900, down 8.2% from a year earlier, the largest price decline recorded. Prices of single-family homes fell 8.7% in the past year, also the most since the records begin in 1968.

Our local median price decrease is at 17% to the bad as compared to the February 2007 data.

Since the credit crunch first hit in August, resales have been "stuck" in a narrow range around 5 million, said Lawrence Yun, chief economist for the real estate agents' trade group.

Sales rose in three of four regions, with the West still lagging. Sales rose 11.3% in the Northeast, 2.5% in the Midwest and 2.1% in the South. Sales fell 1.1% in the West.

Median sales prices are down 13.4% in the West, largely because the market for jumbo loans above $417,000 remains frozen, Yun said.

Still correcting out here in these parts. Good to see at least other regions at least treading water favorably. Who knows when we stop sinking??

There will be a series of housing market reports coming out this week. I'm expecting a mixed bag of good news and bad news.


I found an early media reaction and commentary to the housing news shared earlier. Read the whole thing here.

Commentary: After much preaching about prices, home sellers get religion

CHICAGO (MarketWatch) -- You might be tempted to think that there was a remarkable resurrection in the housing market in February, given the news that existing-homes sales rose for the first time in seven months. But remember, Easter wasn't until March.

If there was an epiphany a month early, it came from home sellers who seem to have gotten the message that the way to move inventory in this dismal market is to beat the competition on price. The median price of existing homes sold in February dropped a record 8.2% from a year earlier, to $195,900.

Lo and behold, you drop prices and sales go up, nearly 3% for the month. That isn't what you'd call spectacular, especially given that sales are still down almost 24% year over year. But you can't expect miracles in a month like February, a short 29 days of generally dismal weather in most parts of the country when sales are usually sluggish as everyone gears up for spring.

Where have I heard things similar before??

The market may be poised to ascend, but there are still some pretty big stones that have to be rolled out of the way before any revival is more than fleeting:

* March traditionally kicks off the spring selling season, and a flood of inventory onto the market now could easily reverse February's gains.

* Prices are falling, making homes more affordable, but in many markets they are still wildly out of relation to buyers' ability to pay.

* Rates are affordable in the mortgage market, but only the most-creditworthy borrowers are getting the chance to obtain those rates; many marginal borrowers are still frozen out.

* The number of delinquencies and foreclosures is continuing to grow and will likely do so for several quarters yet, threatening to pour more inventory on the market and take more buyers out of it.

Even with February's numbers, the evidence that new life is being breathed into the housing market is scant. If you want to believe, you'll just have to take it on faith.

A tempered enthusiasm, and interest to see where the market goes from here.

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