Usually M and I look at the previous months numbers on the first day of the month- but I’ve been anxious to see these figures since the first week in August. ARMLS will release their official numbers generally on the 15th of the month. We couldn’t bring ourselves to wait, and so here’s what M says:
As of this morning we had 3,176 sales for September. Obviously, there will be no official closings on the weekend but there may be a few more that trickle in because a few agents entered the 29-30th as COE. This will leave Phoenix with a 18 month supply of homes (57,441 active). In addition, September has seen one of the largest monthly drops in value on a cost/sf basis.
It believe the rush to close deals in August sucked a lot of sales from September.
If we assume that sales come in at 3250 to allow for latecomers, that would be a drop of 25% month-to-month and a whopping 46% year-over-year.
It will be interesting to see what the numbers look like nationwide when the NAR reports their figures at the end of October.
There is a thin, invisible line between denial and the next stages of recognition which come, in a mob, packed as a single psychological tsunami that comprises Anger; Fear; panic; acceptance…
We aren’t there. But its close.
Twist, I have noted that the final numbers are a bit more accurate a week after the close of the month. I have tried extrapolating numbers after three weeks but note that there is often a flury of closings in the final week of every month. Alhough Realtors are supposed to record sales in the MLS within three days of closing they are often slow (what can I say). Also previous months numbers are often revised up by about 3-5% for the same reason.
Local MLS data for the previous month is fed into NAR by the 15th of the month which consolidates the numbers for release near the end of the month. We won’t know national September numbers until the end of October.
However, a sampling of a dozen or so major markets has been consistent with the national markets. What you are talking about here will be front page news at local levels in about a week when it is released and front page news nationally in about a month. My numbers are consistent with yours. Can’t wait for NAR’s spin. Who will they blame? The homebuilder fire sales, Cramer’s rantings?
Tobby-
You are right- accuracy is better a week from now. It’s always comes in a bit higher- that’s why I rounded up. Hindsight of course, is always more accurate.
It’s clear though, that there is going to be a significant drop- and this is the first indication we’ve had just how significant. I decided to just acknowledge the uncertainty and post it. I would be unbelievably surprised to see the number come in much higher than 3250.
Can’t wait for NAR’s spin. Who will they blame?
Rest assured, they’ll find someone or some thing to blame: Cramer, Bernanke, “Chicken Little” bloggers. builders (for lowering their prices) or just the media in general.
The NAR, even with its bevy of degreed economists, seems incapable of seeing the gross imbalances in the market fundamentals that are glaringly obvious to anyone who doesn’t make money off real estate sales.
The NAR, even with its bevy of degreed economists, seems incapable of seeing the gross imbalances in the market fundamentals that are glaringly obvious to anyone who doesn’t make money off real estate sales.
NVmike, you are too polite. Call me jaded, I do not believe it is academic negligence on the part of NAR’s economists, but simply fraud. Professional and academic economists that I deal with on a weekly basis bristle at NAR’s pronouncemnets and “analyis”.
So my question is… If you have to buy….
What constitues a steal in this market? $100 a sq ft with a pool? $80 a sq ft w/ pool and granite ? $115 a sq ft etc…?
I see I can’t spell or type but humor me..
aaaaudio-
In my mind a steal is when I go, “Wow, I couldn’t rent this place for the same amount, and this home is well within my budget and meets my needs. This place is comfortable, affordable, and I can’t see me going anywhere for the next ten years. Consequently, I don’t really care if the market goes up or down.”
When I find THAT house- I’m jumping on it- and I’ll consider it a steal.
“If you have to buy…”
Good Lord. Are there armed realtors out there? If you “have to buy” a dwelling, go to Walmart and buy a tent. The cost per sq ft is quite reasonable.
Don’t wait too long to find that steal. I’d be looking real hard for it right now. Like at an auction. It looks less and less like this will be an orderly correction to the market. You could find yourselves with your down payments in an insolvent bank or S&L (those guarantees can take a while to kick in, and the frozen accounts can wreak havoc on your life in the meantime), or maybe even prime loans might become impossible to get with sterling credit. I’ve got my house for sale, but at this point I’m almost hoping I don’t get an offer close to my asking price (so far I’ve only had 2 vulture offers in over 3 months). Since the plan seems to be to inflate our way out of this, I think assets are probably better to have than cash, at least until the dust settles. In the long run it seems like a safer bet to me, even if I’m stuck here a few more years. On the other hand, if your job is one that is likely to be at risk in a recession or depression, buying is a big gamble any way you slice it.
With all our extravagant spending on two wars (and counting) and tax cuts for the rich, I just can’t imagine how hyperinflation can be avoided when confidence in the dollar collapses, a collapse it seems our political and financial leaders seem intent on bringing about. Hey, but I’m glad our media is looking into all the ramifications of…. Britney’s drug problems, OJ, and Hillary’s cleavage.
Besides, if Kramer says don’t buy, I think it’s time to think about buying.
AZ Cowboy-
For most of us, renting is a viable alternative. I can though, envision situations that renting would be tough.
One might be the need for a house with handicapped modifications- or say my home-based business has specific needs [Perhaps I keep a lot of heavy equipment, or a welding shop, etc.] that might make it difficult to find a rental suitable for my needs.
That said- I agree that most of us don’t HAVE to buy a house.
TC-
Short-term I think credit tightening is going to be a problem. The banks are getting all those REOs back in droves though- and there is going to come a point where they are going to have to be aggressive in getting rid of them.
My dad tells me that he remembers in the early 1960s he would drive around Scottsdale and see stickers on a lot of doors [REOs] You could pick your house and just start making the payments. At the rate we are going, I think it is possible we will see those days again.
TC-
I’d hate to agree with Cramer, but I don’t see how buying a house before any financial crisis helps anyone but the realtor.
The dollar will drop, yes. Hyperinflation? Not likely. For that to happen, it’s not enough that prices of commodities rise. You have to have rising wages to get a wage-price spiral, and that ain’t gonna happen in near-zero union, wage declining America.
We’ll get severe stagflation, then a major recession. That’s more or less how currency collapses play out.
Yossarian-
I was talking with an agent friend about how to make money in RE in this market- and it’s rough. If you are buying as an investment, “buy and hold” is a tough strategy when you can’t see the bottom with binoculars. Rents are so out of line with mortgages, positive cash flow is tough as well. It’s true you can get a property well below market- and maybe with a few repairs you can flip it- but there is so much inventory, even nice homes that are well priced are having a tough time selling. A flip can be a risky play as well.
That’s why, contrary to what the NAR says, there’s a time to buy, sell, or HOLD. For most of us, HOLD is the best strategy at the moment.
Equilibrium: When the nubber of monthly home sales = the number of monthly home foreclosures.
“I realize the real estate market has crashed. But it hasn’t affected my neighborhood good.”
When will we have final sales data?
NVMike-
ARMLS releases their numbers on the 15th of the month. Butler releases his sales numbers around the 11th, but they aren’t based off of the MLS.