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 Market Report for March 2011
As I checked ARMLS this morning, I was surprised with the closed numbers for March, but this is not an April Fool’s Day joke.
ARMLS is reporting 9789 closed transactions, which is the first +9000 month since June of 2010 and the highest month since August of 2005. In addition, it’s the 2nd highest March of all time (and only 200 less than the top figure from March of 2005). March 2011 shows a 37% increase over February and a 9% increase over March of 2010. The first quarter of 2011 is up 10% over the first quarter of 2010. These are obviously very positive sales figures.
REO’s make up 46% of closings and Short Sales were 20%, so distress sales are still about 2 out of 3 of all closings, which is down from the 70% figure at the first of the year. Pendings are up 43% from January 1, 2011 @ 12,907, while Active listings are down 16%, hovering around 30,000 for the first time since March of 2006. There are also 7000 AWC listings currently, with 88% of those in a Short Sale category.
On the price front, it appears that prices are improving slightly with the Median Price the same as last month @$110,000; the Average Sales Price was up ~2% from February @ $159,000; while the price per square foot was $82.15 which is up about 1% from February’s figure.
March had some excellent articles from the Cromford Report. One article in the Good News section called the Market’s second bottom for prices (double dip) in February of 2011, which was slightly below the previous low mark, which occurred in April of 2009; and the most current article in the News section shows the percent of foreclosures by Zip Code. If you haven’t been on the Cromford Report’s web site recently, you should check it out. You’ll find excellent visual tools for describing to buyers, sellers, appraisers and lenders, our market with the most current information.
Just a footnote about Short Sale disclosures and MARS-it appears that MARS disclosure requirements, which were widely publicized last month, have not negatively impacted the Short Sales market. Now if NAR can get the FTC to apply some common sense to the MARS disclosure requirements for real estate agents, maybe Short Sales will continue to improve. Oh well, you can always hope and pray.