IN-DEPTH ANALYSIS
February 2007
January ARMLS Reports
Resale Listings
The listing count reported in the January ARMLS Reports,
which were released on February 14th, was 46,798, rising for the
first time in three months—up 2,551 listings from the December reports. Listings dropped in October, November and
December, though still remaining extremely high. The record level of listings prior to January
2005 was 30,046 listings in February 2003.
The monthly listing quantity dropped 5% from October to November, and
another 2% from November to December.
If your clients do not believe that the market has changed,
and they expect multiple offers and selling prices exceeding the listing
prices, use this information. Tell them,
“Compared to twelve months ago, listings have increased by 14,992!”
Resale Sales
ARMLS-reported sales for January dropped from the December
sales figure, with a decrease of 1,004 sales.
On an annually adjusted basis sales were down only 868, or less than 20%
from January 2006. January sales
quantity typically drops slightly from December’s sales, so this quantity is
not abnormal based upon the calendar cycle.
In this normal calendar cycle, sales tend to be highest in the summer
and then gradually taper off over the next few months before resuming the climb
during the first quarter of each year.
The winter months are consistently the lowest in sales.
Our sources of data for these displays are the ARMLS
reports. In these, there are three
months, January – March 2005, for which we have not shown listing data because
of apparent discrepancies. Additionally,
ARMLS notes that the listing information for March through August 2002 may
contain errors, but we have chosen to display this reasonable data above.
A Two Year Perspective
The graph below displays the same
data as above, but focuses on only the most recent 24 months.
Adjusted Monthly Sales Trend
Sales, when compared to one year
ago, fell for the thirteenth consecutive month.
This drop of 1,004 is illustrated in the chart below.
ARMLS REPORTED SALES
The chart is divided into market
condition segments by comparing current sales activity to the sales activity
during the same month in the previous year.
Analysis of these figures clearly
shows the following:
1.
Prior
to twelve months ago, sales increased every month for the past four years when
compared to that month in the year prior (from orange to green, then back to
orange).
2.
The
twelve most current months (red) clearly demonstrate that the hot market of
March 2004 – September 2005 has totally disappeared.
3.
The
collective increase in sales for the past eighteen months (orange and red) has
been at a substantially slower rate than during the preceding thirteen months
(green).
Our Assessment of the Resale Market
Supply and demand are interrelated variables in the Real
Estate Market, but changes in the current market are being driven almost
exclusively by the supply
variable. Sixteen months ago demand was the primary driver. We expect sales to continue at a pace similar
to 2002 and 2003 for several months.
With the current over-supply situation, resale housing
prices have started to decline and appear to be entering an ongoing downward
adjustment mode. This emerging
adjustment will help to realign the supply and demand variable. The decline seems to be slowing in recent
months, leading many to hope for a return to a normal market, but it is
difficult to tell how long that will take.
For more information see other related Resale Articles in
this issue of In-Depth Analysis.
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