January 2010 Market Report

The Atlanta housing market ended the year on a positive note. However, the strength in October & November did not follow through into December. This may be a reflection of the housing stimulus ending and then being reinstated, but the overall bad economy remains a negative factor for housing demand.

There were 622 closings for single family attached in December. This was a 20.3% increase over December 2008 and was the 3rd consecutive monthly year-to-year double digit percentage increase. Out of the last 34 monthly periods the number of closings declined in 26 out of the first 27 months. But, out of the last 7 months there have been 5 months with monthly year-to-year increases in closings.

Single family detached closed 3,357 homes in December. This was a 3.9% year-to-year percentage decrease, but after lags are reported it will probably be an increase. Closings in December are usually greater than in November. However, 2009 will be negative for only the 2nd time over the past 15 years.

Closings for all single family in 2009 were 52,474 or a decrease of 4.6% from 2008. The last time yearly closings were less than 2009 occurred back in 2001. The 2009 closings were also far below the record high back of 81,071 back in 2006.

The average sale price for single family attached in December 2009 was $155,819. This was 7.9% below December 2008 and marked the 25th consecutive year-to-year monthly decline in price. The average sale price was never above $160M in any month of 2009 but the last time it was below $160M before 2009 was February 2001.

The average sale price for single family detached was $202,135 in December. This was unchanged from the same year ago period, but more than $82M below June 2007’s all time high.

The average sale price for all single family in 2009 was $190,682. This was 14% below 2008 and almost $64M below 2007’s all time high. The last time the yearly average price for all single family was below 2009’s average was back in 1999, TEN years ago.

The average sale price for both single family detached and attached were down 13.8% & 14.9%, respectively, from 2008. The last time an average price was lower for both categories was in 1999.

There were 62,300 expired listings for all single family in 2009. This was more than 23M below 2008’s record of 85,446. There were 22,697 withdrawn listings for all single family in 2009. This was more than 11M below 2007’s record of 33,860.

It is usually a very good sign when there are less expired and withdrawn listings, but for 2009 we need to also take into account the much reduced inventory during 2009 versus 2007 and 2008.

There were less than 45,000 homes/units on the market at the end of 2009. This is far below the end-of-month record of 72,000 homes/units on the market at the end of August 2007. The last time the end-of-month inventory for all single family was below December 2009 was December 2005.

I predict housing will be up the first two quarters in 2010, because of the extended housing stimulus. However, Georgia’s unemployment was just announced for November and it was a record high 10.3%. I believe this may continue to climb and signals a possible double dip recession the second half of 2010. Call your state representatives, write Washington, and let your voice be heard to get this economy going.

Thank you,
Steve Palm Smart Numbers

November 2009 Market Report

The positive trends that were experienced in October continued in a big way for November. The year-to-year percentage change for all single family closings was another double digit consecutive percentage increase. It was also the greatest year-to-year percentage increase on record.

Our housing industry had been down for 13 consecutive quarters, but it is a very good bet that 4th quarter 2009 will have a year-to-tear increase for all single family closings. Not just up, but a double digit percentage increase. There were 4,377 closings for all single family in November and this was against a very weak 2008 result. However, after lags are reported November 2009 will exceed November 2007.

There were 3,630 closings in November 2009 for single family detached. This is an increase of 32.9% over November 2008 and the greatest year-to-year percent increase since April 1996’s 41.6%. If there are a lot of lags, this could be the largest percent increase since records have been kept (January 1995).

There were 747 closings in November for single family attached. This is a huge 85.8% increase over November 2008 and the largest year-to-year percent increase since records have been kept. The previous greatest year-to-year percent increase for single family attached was November 2005 at 53.2%.

The average sale prices for all single family remained weak in November, which helped stimulate the increase in demand. The November average closed price was $189,306 and the lowest reported monthly average since April 2009’s $182,369. However, with demand increasing and inventories continuing to decline I expect inflation to kick in and in the not too distant future.

The average closed price for single family attached in November 2009 was $147,347. This is down 8.5% from November 2008 and the 24th consecutive year-to-year monthly average price decline. I am continuing to predict low prices for single family attached into 2010, because of the large inventory of condominium foreclosures the FDIC needs to dispose of. I don’t know what is in worse shape, the Atlanta condominium market or the North Georgia mountain vacant developed lot inventory. I think deals will abound for both of these markets into and through 2010.

Single family detached inventory has dropped again and is now down to 36,263 actives at the end of November. The last time it was this low was February 2006. At the end of December we will be back to 2005 levels.

The months-supply for single family detached finally dropped below ten months at the end of November. After peaking at 14 months July-August 2008 we have finally dropped below 10 months for the first time since April 2007. We still have a way to go before reaching a “normal” 6.5-7.5 months supply.

There have been a lot of good numbers and trends to report the last few months. What is even more encouraging is that the trends are increasing at an increasing rate or accelerating. However, I believe the next 2-3 quarters will be positive, but there are still too many potential negatives to think positive any farther out.

The threat of inflation kicking in is looking more like a reality by the end of 2010, and the commercial & A&D foreclosures will restrict lending throughout 2010.

Thank you,
Steve Palm
Smart Numbers 2009 Smart Numbers

October 2009 Market Report

Directors, First Multiple Listing Service November 20, 2009

I ended last month’s letter with “Housing is an important component for the overall Atlanta economy and the 4th quarter will be a critical indicator of 2010’s direction”. I am going to report some pre-holiday cheer, as October had the strongest year-to-year percentage increase in closings for all single family since May 2006.

There were 4,532 closings in October for all single family. This is a 10.3% increase over October 2008 and after lags are reported the percentage increase should be at least 15%.

Single family attached closed 741 units in October 2009. This is an increase of 24.3% over October 2008 and the strongest year-to-year percentage increase since March 2006. After lags are reported, October will be the strongest closing month in 2009 for single family attached.

Single family detached closed 3,791 homes in October. This is an increase of 7.9% over October 2008 and after lags are reported it should be a double digit increase.

The average sale price for all single family in October was $193,955. This is $3,000 more than September, but $15,000 less than October 2008. If this market heats up I expect average prices under $200,000 for all single family will be a thing of the past.

The average price for single family detached in October was $201,038 or a decline of 6.9% from October 2008. The average price for single family detached for November 2008 was $193,702. If we exceed that price in November 2009 it will be the first year-to-year average price increase in 20 months.

The average price for single family attached was $157,721 in October 2009. This average was $16,000 above September 2009, but still $7,000 below October 2008’s average price.

Days-on-market was 98.4 for single family attached in October. This is the lowest DOM this year and the lowest since October 2008.

There were 4,932 expired listings for all single family in October. This was 2,500 less than October 2008 and the greatest year-to-year monthly drop for expired listings for all single family.

There were 1,783 withdrawn listings for all single family in October. This was 600 less than October 2008 and the 15th consecutive year-to-year decline for withdrawn listings.

Inventory just keeps dropping. There were only 37,103 active listings on the market for single family detached at the end of October. The last time it was lower than this was February 2006. I believe that inventories at the end of December will be almost than 50% off their all time high of 60,000 in 2007.

There were 8,618 pending sales at the end of October 2009 versus 5,413 at the end of October 2008. We closed only 3,133 single family homes in November 2008, and at the time of this writing we had already posted 1,000 closings for all single family in November. Taking both of these into account, I am very confident we should have another double digit percentage year to year increase for November 2009.

Housing seems to be on the upswing, but the overall economy remains very weak. In order to have big upticks in housing the economy needs to improve, especially the employment sector.

Thank you,

Steve Palm

Smart Numbers 2009 Smart Numbers

September 2009 Market Report

Directors, First Multiple Listing Service September 22, 2009

There is more good news to report for August. For the first time since September 2008 and for only the second monthly reporting period out of the last thirty, single family attached closed more units than the same year ago period.

There were 681 single family attached closings August 2009 versus 680 August 2008. This is an increase of only one, but after lags are reported there will be about a 5% increase.

Now for the bad news: I was really expecting back to back positive year to year increases for single family detached closings, but after lags are reported it will probably not happen.

In last month’s letter I stated, ‘There were 8,778 pending sales for all single family at the end of July compared with 6,825 at the end of July 2008. If lender liquidity could improve, this market could heat up fairly quickly’. Well, liquidity is still a major problem, as only 4,449 closed and even though single family attached was positive, single family detached was down 12.4%.

At the end of August there were 7,488 pending sales for single family detached and 1,512 for single family attached or 9,000 total pending for single family. At the end of August 2008 there were 4,755 pending sales for single family detached and 1,005 for single family attached or 5,760 total single family pending sales. Looking at the difference for last month and now the end of August, one would think the following month would have more closings.

I have always reported lease purchases and contingencies as a pending sale, but most of the pending dates are less than 90 days and there are less than 7% contingencies, so is this a liquidity problem that these pending listings are not being closed? There are 5,386 proposed closings for September and that would exceed September 2008’s closed amount if all would close. There are always carry forwards and cancellations, but there are a lot of pending sales, so I am very curious as to what will be closed this month and reported in the next letter.

The average sale price for single family detached was $203,041 in August. This is a decline of 13% from August 2008 and 6% below July, but still 16% higher than the February 2009 recession low. This is the 21 monthly average sale price decline for single family detached. I believe this streak will be broken by year end.

The average sale price for single family attached in August was $148,779. This is a decline of 19.7% from August 2008 and 4.7% below July, but still 5% higher than the March 2009 recession low. This was the 11 to year percentage decline in the average sale price for single family attached.

Our inventory levels just keep dropping. At the end of August there were 49,000 single family homes listed for sale. The last time the inventory was lower than this was March 2006. Below is a recap of the months-supply trending for single family detached and attached. As you can see, we have definitely moderated.

I believe housing will continue to improve through the rest of the year, but it looks like it will be with a slow year to year percentage increase in closings.

Thank you,

Steve Palm

Smart Numbers

© 2009 Smart Numbers

August Market Report

It is not official yet, but after lags are reported single family detached will have a positive year-to-year increase in closings for July.  It still looks like single family attached will be negative, but combined with single family detached, total closings will still be positive.  This is very encouraging, but we need consecutive year-to-year monthly increases before we even consider this as our turnaround.  I am going to be optimistic, as I believe we will.

There were 4,325 closings for single family detached in July 2009 versus 4,475 for July 2008.  This is a decline of 3.4%, but will be easily surpassed by lagged closings.  Last month I reported a decline 12.3% from June 2008 to June 2009, but after lags, that decline is only 5.1% now.  This will be only the 3rdyear-to-year monthly increase for closings during the past 37 months.

There were 655 closings in July for single family attached.  This is a decline of 17.4% from July 2008 and the 28th decline out of the last 29 periods.  Combined with single family detached, closings for July were 5.5% less than July 2008, but after lags are reported should be positive.

The average sale price for all single family was $210,777 in July.  This is a decline of 9.8% from July 2008’s average sale
price, but the smallest year-to-year percentage decline since February 2008.

The average sale price in July for single family detached was $218,840 or a decline of 9.5% from July 2008.  This was the 20th consecutive year-to-year decline in sale price for single family detached.

Sale prices for single family detached set a monthly all-time high of $284,873 June 2007, so we are still $66,000 off our high.  However, it was $43,000 higher than February 2009’s recession low of $175,499.  With inventories dropping, any decent rise in demand will quickly “correct” the prices back up.

The average sale price for single family attached was $157,537 in July.  This was a decline of 15.7% from July 2008 and the 11th consecutive year-to-year double digit percentage decline for single family attached.  The real problem still lies ahead for single family attached; what to do with the great amount of over developed high-end condos.  I believe there will be either some great auction and/or rental deals to reduce the inventory.

The inventory of single family detached was 41,898 at the end of July, while the inventory of single family attached was 9,297.  The combined inventory of both single family detached and attached was 51,195 and the last time inventory was this low was December 2006.

There were 4,982 expired listings for all single family in July.  This is was down from July 2008’s 7,127 and the 9th consecutive monthly year-to-year decline for all single family expired listings.

There were 2,122 withdrawn listings for all single family in July.  This is down from July 2008’s 3,089 and the 12th consecutive year-to-year monthly decline for all single family withdrawn listings.

I am predicting back to back positive year-to-year monthly closings, as I believe August will be positive too.  There were 8,778 pending sales for all single family at the end of July compared with 6,825 at the end of July 2008.  If lender liquidity could improve, this market could heat up fairly quick.

Thank you,

Steve Palm
Smart Numbers
© 2009 Smart Numbers