Seattle SFR

June statistics were released this week.

Closed sales picked up in June matching 2010 levels.  2009 & 2010 closing were juiced by the governmental credit that were offered.  2011 closings look even better in that light since there have been no artificial inducements to buy.

The Pending sales chart (all charts from Seattlebubble) shows pretty clearly the effect of the stimulus program which ended 5/31/2010...sales dropped off a cliff last year.  It is also interesting to note the effect the stimulus program which ran thru the end of 2009.  It appears the program was able to stabilize sales thru October that year.  With no stimulus in place this year it will be quite revealing to see how sales proceed thru the Fall.  Even now 2011 is the best year since 2007.  In 2007 sales began cliffdiving in June.  I would anticipate 2011 faring better the last half of the year than it did in 2007.  All the market has to do is lumber along at its current pace to beat that.

The most interesting market condition is the low level of available inventory.  This is the lowest inventory number since 2007.  Anecdotal information is pointed to a two tiered inventory.  Run down, overpriced homes are wallowing on the market while spruced up, market priced homes are being aggressively pursued.  I would suspect that the bulk of the inventory has been on the market over 180 days and that the more current, correctly priced homes are the ones resulting in pending sales.  It's pretty evident how that needs to turn out...if the owners of the stale inventory want to move them they need to reprice them.  Those that don't need to move them will delist.  That will obviously lead to lower sale prices.  The good news is that just isn't much inventory which will soon put a floor under prices (probably the end of this year).  In fact, low inventory levels are current supporting prices.

Prices turned up in April.  Whether this turns out to be the typical "Spring bounce" or something more sustainable will depend on the activity levels thru the Fall.  I suspect pending sales remain stable thru the Fall, further decreasing inventory levels allowing for prices to stabilize later this year.