Waking up to Beauty


I love waking up early and watching the sunrise with a good cup of coffee (and my camera)!


Monsoon season will be here soon, so we will be seeing more clouds, which provide a beautiful backdrop for Arizona’s trademark sunrises and sunsets.


Enjoy your day!

Scottsdale Rainbow

Last night, I was out doing a last minute check on one of my Scottsdale condo listings that is closing today, and caught this rainbow on my phone. 


I emailed it to TwitPic which posted it to  Twitter for me, and started getting comments from around town right away. 

A fun way to share a gorgeous sky!

Cromford Report: Phoenix Area Real Estate Update

Mike Orr from the Cromford Report knows Phoenix area real estate market statistics better than most anyone at this point. He just published his mid-month update and there are some very notable changes in our market. I’ve clipped some of the most interesting information to share with you.

Mid-Month Pricing Update

Each month about this time we look back at the previous month and analyze how pricing has behaved and report on how well our forecasting techniques performed. We also give a forecast for how pricing will move over the next 30 days.


As of June 17, the average $/SF for monthly sales across all areas and types was $86.81 up 2.5% from $84.71 on May 18.

Today the pending listings for all areas & types shows an average list $/SF of $91.15. This is 0.6% above the average list $/SF for homes sold in the last month ($90.59), which suggests that average sales pricing will continue to increase in the next 30 to 50 days. The relationship between these measurements can be seen clearly in the following chart.


Mike goes on to say:

we have already recorded an average 5.7% increase for monthly sales $/SF since the confirmed low point on April 6. Median sales prices reached a confirmed bottom of $115,000 on April 30, and have risen 6.4% to $122,410 since then. Monthly average sales price has recorded a 7.7% increase since April 6.

There is now no doubt that overall average $/SF for monthly sales, monthly average sales price and monthly median sales price are all increasing.

However the detailed picture is much more complex. We see two segments where prices are still falling: luxury homes and short-sales. Both of these are a relatively small percentage of sales, although they form a much higher percentage of active listings. Pricing for lender owned properties is rising across the board. List $/SF prices for REOs are up 11.1% since their low point of $77.17 on March 23.

For normal transactions, pricing has stabilized and the deciding factor is the price range. Below $350,000 pricing is generally on the rise while above $500,000 it is still falling. However it is the range below $350,000 that comprises the vast majority of sales, so this tends to push the overall average higher.

Currently we can see no indicators that suggest a change in the overall upward pricing trend. Supply is decreasing, even in luxury homes and short sales. Supply is very low in prices ranges under $350,000. Demand is no longer increasing, but has stabilized at a very high level. Changes in mix are all tending to push overall averages higher:

  1. REOs are falling as a percentage of sales, which means higher-priced properties become a larger contributor to the averages.
  2. Far fewer very low-priced homes (under $50,000) are being offered for sale compared with the recent past. These tend to have the lowest $/SF.
  3. Short sales are becoming more common, but each short sale that replaces an REO tends to increase the average $/SF. This is because the average $/SF for short sales is currently about 37% higher than the average $/SF for REOs.

Lenders might want to consider the last statistic when deciding whether to approve a short sale or let the trustee sell the home. It appears that the short sale is more likely to achieve a higher price than invoking the trustee’s power of sale.

Very, very interesting.  Historically, homes sales have dropped off in the summer, but if the real estate market is stabilizing, we could see some very interesting home sales figures over the summer.

Phoenix Real Estate: Edging Back into a Seller’s Market

More evidence of our changing real estate market:

Phoenix real estate market - buyers or sellers

The Cromford Report has defined Contract Ratio as follows:

Contract Ratio indicates how "hot" a market it. It specifically measures the number of active sales contracts under negotiation relative to the supply of active listings. It is defined as 100 x (Pending Listings + Active Listings with Contingent Offer) / Active Listings Without a Contingent Offer. The higher the number the greater the buying activity relative to supply.

If this number rises then it is a sign of growing contract activity and a positive signal for sellers. Conversely a falling number is a sign of a weakening market – either supply of active listings is increasing or contract activity is slowing, or both. In a balanced market the value of the Contract Ratio is about 30. When it lies below 20 the market can be considered "slow" or a "buyer’s market". Above 40 can be considered a "seller’s market" and when it moves above 100 we regard this as evidence of a "buying frenzy".

As you can see, in this chart, the Seller’s market ended in November 2005, and the Phoenix area has re-entered this realm as of March 2009.  Decreased inventory and increased investor and first-time buyer demand is fuelling this surge.

Phoenix Real Estate Update: Median Sales Prices on the Rise

Here’s the latest “Good News” from the Cromford Report:

On June 20, 2009 for “all areas and types” we recorded a Monthly Median Sales Price of $124,000, up 7.8% from the $115,000 we recorded on April 30.

This is for ALL ARMLS listings and all types of dwellings, so it represents the median across this entire market. But specific sectors may be performing quite differently. The principal reason for the price increase is the change in the market in west Phoenix, where properties below $50,000 have become much scarcer and purchase prices have risen sharply due to intense competition and reduced supply. A similar increase in pricing, but less pronounced, can be seen in many other affordable areas of the valley. In addition, lender owned properties now comprise a diminishing percentage of the total number of homes sold, diluting their power to bring the median sales price down to the extreme lows we saw in April.

Pricing above the $500,000 level is still falling, but these homes now constitute a very small part of the market compared with a few years ago.

I’m representing a number of buyers and it’s been tough to get an offer accepted in the lower price ranges.  Competition is fierce, even for short sales.  Multiple offers are much more the norm, rather than the exception.

If you are planning to purchase a home before the end of the year, you must get your loan pre-approval before you start looking. If you find a home before you have your paperwork in order, you will be at a real disadvantage.  Lenders have geared up and are able to get you the Arizona required paper work (LSR – Loan Status Report) much more quickly.  However, it does take some time, so plan ahead!

A Tale of Two Cities: Comparing Phoenix and Scottsdale Real Estate

Realtors often say things like “Location, location, location”, and “Real estate is local”.

Comparing Phoenix and Scottsdale real estate stats really is like comparing apples to oranges, but I’m going to do it anyway.

A few facts:

  • Phoenix covers a much larger area, 517 square miles, as compared to  Scottsdale’s 184 square miles.
  • Phoenix has more than 495,000 housing units, while Scottsdale has 116,000+ housing units.
  • In 2008, home sales in Phoenix totaled 13,028, and 4,456 in Scottsdale.
  • Year-to-date home sales (as calculated via the Arizona Regional MLS through 5/31/09)  in Phoenix were 10,298 and 1,901 for Scottsdale.

From the figures above, sales are up dramatically in Phoenix this year, and may surpass last year’s total number of sales, by mid-year this year.  Scottsdale may approach last year’s sales numbers by the end of the year, but it’s really too early to say.

Phoenix Real Estate

Phoenix Foreclosures (REO) made up less that 25% of the active listings, yet accounted for over 75% of the actual sales in the prior 30 days (from June 2, 2009).  Normal listing (not a short or REO) accounted for 40-45% of active listings, but only 10-15% of sales.  On the lower two bar charts, you can see that, foreclosures and short sales are being listed and selling at a significantly lower price, per square foot.  Average price for a normal sale is about $120 per square foot, as compared to an average of $55/sf for a foreclosure.  Phoenix home sales prices have depreciated about 45% since this same time last year.


Scottsdale Real Estate

Foreclosures make up a very small part of the homes for sale in Scottsdale, less than 10%, yet account for over 25% of the sales. Normal sales predominate the market (just over 75% of homes listed), and do account for just over half of the sales. Short sales are closing at a proportionately higher level in Scottsdale, too.

Listing prices for both REO and short sales (on a $ per square foot basis) are significantly lower than for a  normal home.  Sales prices of these normal transactions are being brought down as a result. While the average price per square foot for a normal listing is close to $350/sf, those selling are actually closing significantly less, at and average of $225/sf.  Both short sales and foreclosures are listed at an average of $200 per square foot.  Short sales are closing at an average of $175 per square foot, while foreclosures are closing at an average of $150 per square foot.  Home sales prices (again on a per square foot basis) are down about 22% this year.


Two Cities – Two Markets

Comparing home sales statistics shows just how different the current real estate situation is in these two neighboring cities. Phoenix homes prices are down dramatically, but sales are going through the roof.  In Scottsdale, there has been a slowdown, but prices have not been impacted as severely.

What both of these cities do have in common is that sellers are selling, and buyers are buying. Real estate is a local business, and it’s important to know what’s going on in the specific market at the time you are considering making a move. 

Ask questions. I’ll do my best to answer.