June 21, 2004

May 2004 was the fourteenth consecutive year-to-year increase for single family closings. There were 5,693 single family closings in May, compared to 5,661 in May 2003. This is an increase of .6%, but after lagged closings are reported the increase should be a few percentage points higher.

Condos and townhomes continued to be very strong, as there were 701 closings in May versus 593 in the same year ago period, or an increase of 18.2%. For the year, there have been 2,971 closings for condos and townhomes. This is an increase of 22% over the same five month period in 2003. There is also a good chance that after our June closings are reported, the year-to-date figure could exceed the total reported for the entire 1999 year. The strength in condos and townhomes has occurred even with a single family detached market being ahead of last year by almost 10%!

The average sale price for single family closings in May was $238,433. This is an all-time high, eclipsing August 2003’s $238,265. The average price for single family detached was $244,558 in May or an increase of over $10,000 from last month and also from the same year ago period. This is also an all-time high for single family detached. The average price for condos and townhomes was $194,812, still below the record high of $196,308.

On an interesting note, the $244,558 average price for detached single family is almost $100,000 higher than in 1994 when the average was $146,763. Similarly, the average price for condos and townhomes was $100,894 ten years ago or almost $100,000 less than last month.

Days-on-market declined for the third straight month and seven out of the last eight months for single family detached. The DOM for detached was 72.8 in May and the lowest since September 2002. Days-on-market declined for the fourth straight month for condos and townhomes. The DOM in May was 80.1 and the lowest days-on-market since October 2003.

Home inventories have been moderating, but the high-end still has a lot for sale. Reviewing the Absorption report for single family detached – resale, there are 8.1 months of inventory at the end of May. However, for homes listed above $500,000 the months-of-inventory is over 15.

Interest rates have moderated and that is a good sign for housing. As long as interest rates stay below 6% for a 30 year loan, housing will remain very affordable and the trend for the next few months is still up.

Thank you,

Steve Palm

Smart Numbers

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