June 20, 2008

Is there any good news at all?

By Steve Palm,
Smart Numbers, Inc.

There were 4,573 closings for all single family in May. This was only 19 more closings than we had back in May 2000, as our demand for housing has dropped off to be on pace to resemble 2001’s closings total.

There were 3,881 closings in May for single family detached. This was 35.9% below May 2007’s total and 45.5% below May 2006. May was the 9th consecutive month with a year-to-year percentage decline of 22% or more for single family detached. This was also the 22nd out of the last 23 periods there has been a negative year-to-year change for single family detached.

There were 692 closings in May for condos and townhomes. This was 39.4% below May 2007’s result and 42.4% below May 2006. This was the 6th consecutive month with a year-to-year percentage decline of 20% or more for condos & townhomes.

The average price for all single family in May was $240,101. This was 8.5% below May 2007’s average closing price, but also below May 2005 & May 2006. There have been 6 consecutive months where the average closing price has declined from the same year ago period.

The average closing price for single family detached in May was $250,547 or a decline of 8.8% from May 2007, while the average closing price for condos & townhomes in May was $181,518 or a decline of 8.0% from May 2007.

The all-time high closing price for all single family was $271,278 June 2007. It is a safe bet that June 2008 will not break a new record, as demand remains weak from our declining economy.

There have been 32,116 expired listings for all single family in 2008 through May. This is 8,000 more than the same 2007 time frame and more than there were for the entire year in 2001.

There have been 14,283 withdrawn listings for all single family for 2008 through May and this is almost as many as there were in all of 2003.

Months supply just keeps going up, as all property classifications for single family are over a 13 months-supply. I am using the same chart used last month to illustrate our slowdown from 2006.

Is there any good news at all? As long as gas remains high, there will be pressure for high inflation and therefore higher interest rates. Even after the FED has dropped interest rates significantly since the beginning of the year, long term mortgage rates have actually edged higher. Interest rates edged up again this week and you would have to go back to September 2007 to have higher mortgage rates. This, combined with a slowing economy could keep our housing market down for a long time.

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