It is great to see healing finally taking place in the market! We are still not where we need to be, but here is what we are seeing from the statistics…
In the resale arena we have almost doubled our monthly closings in both Canyon & Ada County from January ‘09. The average sales price continues to slip due to the high inventory levels. The levels are being kept high as a result of the short sale and foreclosure problem. Once those begin to wane, we will see a dramatic turn-around in resale inventory levels, as demand continues to increase and the new home inventory continues to decline. This will immediately impact values and we will once again see resale values grow! We now have had four straight months of growth in pending sales. April’s pending number of 1012 units is a 60% increase over January’s number. Inventories were fairly static. As far as the Short Sales, Foreclosures, & REO’s, you will see some fairly big declines. This is in part due to the discovery that MLS is showing some properties as both Short Sales and Foreclosures. This was unintentionally causing some properties to get counted twice as troubled units. Our numbers going forward will be far more accurate.
With regards to new homes there is also some encouraging news. Inventory levels continue to fall to record levels. Single family New Home inventory in Ada County has fallen to 559 units, down from 1225 units in Jan ’08. Canyon County stands at 290 units down from 653 units in January of ’08. These numbers will remain extremely low as banks are not very accommodating to builders in obtaining construction financing. These low inventories will also force some buyers back into the resale arena. Ada County has just logged their fourth straight month of increases in the average sales price of a new home. Canyon County continues to struggle as they have an inordinate amount of Short Sales and Foreclosures.
There is a real opportunity for builders who can obtain construction financing. With lot prices down, builders can once again build spec inventory and potentially realize a profit. However it is imperative that they conduct the necessary market research to minimize risk. Their real competition comes from the troubled properties in the resale market.
It appears the recovery is here but we still have a lot of work to do!