IN-DEPTH ANALYSIS
September 2007
August ARMLS Reports
Resale Listings
The listing count reported in the August ARMLS Reports,
which were released on September 14th, was 57,207—up 1,291 listings
from the July reports. After a moderate
fall off in the listing count in the fourth quarter of 2006, growth in this
number has resumed climbing to an all time high. The record level of listings
prior to January 2005 was 30,046 listings in February 2003. The monthly listing quantity climbed 2.3%
from July to August.
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 August 2005, listings have increased by over 40,000!”
Resale Sales
ARMLS-reported sales for August dropped 8% from the July sales
figure with an decrease of 377 sales. On an annually adjusted basis sales were down
1,765 or almost 30% from August 2006. August
sales quantity is typically very close to July, so this quantity is on par for
the normal 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 twenty-second consecutive month. This drop of 1,765 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 twenty 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
twenty 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 twenty-six 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. Up until two years ago, demand was the primary
driver. In the last few months demand has also fallen off substantially
from what we had considered the norm - a pace similar to 2002 and 2003.
Because
of the prolonged over-supply situation, appreciation in resale housing prices
has totally disappeared. The market is now entering a phase where we
expect to see an overall price level decline. A significant price
adjustment or an extended period of flat prices will be necessary to realign
the supply and demand variable. 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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