Phoenix Real Estate Market – July 2011
Once again building the Phoenix real estate market report first thing on the first of the month produced some surprising results. The number of closings looks too high, especially the number and percentage of short sale closings. Even though I think these numbers will change, I’ll report them as I see them on 7/1/11.
June 2011 had 10,509 closed transactions; highest number of home sales from any June. In fact, it happens to be the highest number of home sales from any single month ever, previous high 10,250. The Arizona Regional MLS (ARMLS) has reported +10,000 sales only 3 other times: 6/04, 6/05, and 8/05. This is the first time over 10,000 in almost 6 years.
Phoenix Market Trends
Looking at recent Phoenix market trends, June 2011 sales volume increased 7% over May 2011 and by 13% over June 2010.
Fortunately in early July, we have good news on the price front as well. Both the average and median home sales price increased month over month 2% and 3% respectively – $161,000 and $111,000.
Since we have 6 months in the books, I looked at the year to date comparisons 2011 vs. 2010 and 2011 vs. all-time. Remember 2010’s number of transactions were approximately 92,000 which ranked fourth highest home sales all time. Greater Phoenix’s highest year with 104,700 came in 2005. Well, 2011 is off to a very strong start with 53,501 closings YTD. That’s 11% higher than 2010′s numbers and 1% off of the record setting 2005.
Phoenix Real Estate Market Report – June 2011
Once again when I ran my initial numbers for May, I was pleasantly surprised. Initial closings for the Greater Phoenix real estate market in May 2011 are 9802, which is within 88 sales of the highest May on record (2005). May 2011 is 5% over April 2011 and 7% above May 2010, which continues 2011’s improvement over 2010’s numbers.
Now the reality check: Prices fell slightly
- Average Sales Price $158,000 down 2%;
- Median Sales Price-$108,000 down 3%;
- Price per square foot-$82.55-down 1%.
These price numbers are all down from April, which can be attributed again to the ‘mix or make-up’ of the sales figures. REO sales were 44% of the total and Short Sales came in at 22% of all sales. So ‘distress sales’ bumped up slightly, which dropped prices accordingly.
I like the Price Analysis that the Cromford Report published at the end of May. It compared prices a number of ways: such as greater Phoenix vs. outside greater Phoenix; single family vs. condos; various price range points from under $25,000 to over $3 million; and finally a breakdown by city showing today’s price per square foot and comparing it to 90 days ago and last year. Yes all cities are down year over year, but the results are mixed comparing the last 90 days. This is valuable information to provide to clients buying a house, REO sellers, appraisers and anyone else trying to evaluate prices for the Phoenix area.
Besides the number of sales in May, probably the biggest news is number of Active Listings. Current number of Actives stands at 23,624 which is only 2.4 month supply of homes. A balanced market has a 4 to 6 month supply, so we are in a ‘seller’s market’, but prices are the last piece to feel the impact of the short supply. It’s a 5 year low for number of Active Listings and if you factor out the AWC’s, you have to go even further back to reach a 2.4 month supply. Within the Active Listing numbers bank-owned properties have a greater shortage with a 1 month supply of inventory and only a 3 week supply of HUD homes. I guess the shortage of supply explains the return of the multiple offer situations and the dreaded multiple counter offers to explain to frustrated buyers.
The market doesn’t really show any signs of cooling off with 13,254 Pending Listings; the same number as the start of May.
There are a few warning signs on the horizon as the Federal government considers how to deal with Fannie and Freddie, maximum loan amounts, and minimum down payment requirements.
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Phoenix Real Estate Market Report – May 2011
April’s initial numbers show another strong month in the greater Phoenix real estate market. We had 9314 closings, # 2 April of all time, with #1 April/05 possibly in reach. The number of closings was down 7% from March/11, but up 1% from 4/10. Prices moved in a positive direction with the Average Sales Price up $4000/2% to $161,100 and the Median Sales Price moving up $1000 to $111,000.
Bank owned sales dropped 2.5% to 44% of closings (4118) and Short Sales moved up 1% to 20% of closed sales (1845).
With Active listings below 27,000 and sales over 9000 for the month, there is less than a 3 month supply of homes, which by definition is a seller’s market. This should indicate an upward movement for prices on the horizon. On the REO front, there are 5253 Active listings and 4118 sales, or a 1.3 month supply. Short Sales have more AWC listings (6727) than Active (6484), and another 3849 in Pending status-will they ever close?
Regarding MARS disclosures, we are entering our second month waiting for ‘clarification’ from NAR and the FTC regarding which disclosures need to be made by real estate agents. We’re still hearing it’s “coming soon”. Not everyone doing Short Sales are ‘up to speed’ on the state and national requirements. Some agents think their fees were ‘grandfathered’ and Short Sale Negotiator fees are now being called any thing but a Short Sale negotiator fee.
That’s my report for the Phoenix real estate market. Stay tuned, we’ll post about any MARS development once it’s announced.