Waking up to Beauty

Waking up to Beauty

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

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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.

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Enjoy your day!

Scottsdale Rainbow

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. 

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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

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.

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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

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.