Bob Bemis, CEO of the Arizona Regional MLS, shared the latest sales figures, including foreclosures and short sales for the Phoenix real estate market on the Channel 12 news this morning.
A real quick overview for you in just about three minutes.
From the category archives:
Phoenix Real Estate
Scott Sambucci over at Altos Research analyzed the Phoenix real estate market recently.
A few of his insights from “The Phoenix Real Estate Market: Out of the Ashes?“
- Re-lists are down.
- Fewer and smaller price reductions.
- Prices have stabilized.
- Inventory and Days-on-Market are down.
As Scott points out, the future remains to be seen, and…
The obvious question is whether or not these gains are sustainable with the ongoing increases in foreclosure rates and the “shadow inventory” on bank balance sheets.
Head on over to read this relavant article and get the full story.
This morning, I visited Elliot Pollack’s web site, ArizonaEconomy.com to get a more global perspective on Phoenix population growth, employment, real estate statistics. It had been awhile since I spent much time cruising this information-packed site.
Here are the pages I recommend reading to get a quick sense of where our local economy is:
Greater Phoenix Population Growth (%) - Looking at the past 30+ years, you’ll see how cyclical Phoenix growth as been even though the area has continued to grow year after year.
Greater Phoenix Employment Growth (%) – Again with 30+ years of data, you’ll see that this not the first time that the metro area has experienced job loss. However, it is the first time that negative job growth was documented for two consecutive years.
Properties In Foreclosure – Clearly, you’ll see evidence of the "shadow inventory" that many have referred to. These are the homes that are in pre-foreclosure, where the bank has not foreclosed on yet.
Single Family Sales – Here are a couple charts I put together after reviewing the data on this page. Looking at just resale figures, it appears that 2009 home resales will end up close to, or over, 100,000 properties, which puts it on track to approach or match the number home sales in 2004 and 2005.
However, adding in new homes sales paints a slightly different picture, one where total new and resale home sales will exceed the past several years, but are not record setting, by any means.
Months Supply of Resales – This is the chart that begs the question, "What is normal?" Over the past six years, Phoenix real estate has been anything but normal, with the market bouncing from sellers to buyers, and then appearing to head back to a seller’s market. You’ll see there may be some sense of normalcy in the near future.
![clip_image001[7]](http://athomeinscottsdale.com/wp-content/uploads/2009/10/clip_image0017.gif "clip_image001[7]")
As usual, time will tell.
photo credit: Frogman2212
What is going on with real estate? It’s just not clear.
Some Realtors and commentators are positive that we have hit bottom here in Phoenix. Others are not. I’m a bit more selective, thinking that some areas and prices ranges have bottomed out, while others have a ways to go.
On Monday, I completed a BPO (Broker Price Opinion) for a bank-owned property that I will be listing soon. The results were very confusing in that they didn’t follow the supply and demand curve that we’ve all been taught about in Economics 101.
In this particular case, I was comping a single family home with 3 bedrooms, 2 bath, 2 car garage, and a large (9000+ sf) yard, located in the Phoenix zip code 85029. Listing price will be in the $70-80K range.
I found that there were a shortage of homes on the market. Less than 2 months supply. What was a bit frightening is that prices in that area were still in a definitely downward trend.
Traditional wisdom says that when supply decreases, prices increase.
Then, this morning I read, “The Housing Market is about to Become Even More Oversupplied“. I’ve been reading about this W-shaped recovery curve, and haven’t been too convinced. But after Monday, my mind is definitely mulling over the possibility.
Mike Orr, from the Cromford Report , shared the following yesterday:
The average achieved sale price, as a percentage of list, is a significant measure of the market. When it drops we conclude the market is deteriorating and when it rises the opposite is true.
On September 25 the percentage for all areas & types within the ARMLS database hit 97.01%, exceeding 97% for the first time since September 4, 2006. This is a very positive sign. The number has been rising rapidly since hitting a low of 93.82% on February 5, 2009. The highest reading was 99.54% reached on June 5, 2005.
The biggest message this sale price to asking price ratio signifies is that home sellers are adjusting to today’s market, being more realistic about what the market will bear, and pricing accordingly.
I still see overpriced homes, in all price ranges, but especially in the over $500K range. Even that is changing. I am involved in a higher priced transaction, where the seller priced the home $100K less any of the comparable listings, where most have been on the market for more than six months. The home received multiple offers and was under contract in less than a week. Percent of sales price will be over 98% of asking price.
Savvy sellers know they can get a lot of attention with what may seem like an aggressive price.
- Showings increase. In the luxury home I mentioned above, there were three agents showing the house simultaneously.
- Offer prices are much closer to listing price, and may even go over. The most recent bank owned property I sold closed at over 40% of list price, with more than 20 offers.
- Buyers are more focused on completing the sale, knowing that there are others waiting to purchase if they cannot proceed. Competition can be a very powerful tool for a seller.
The Phoenix real estate market is ever-changing. Sellers are adapting and when they price to market and to their competition, their homes are selling at higher prices and more quickly.
Both Phoenix and Scottsdale home prices have continued to depreciate, although based on sales price per square foot figures, this chart shows that momentum in Phoenix shifted in a positive direction late last year. However, you can see that both Phoenix and Scottsdale home prices are about 30% lower than they were at this time last year.
