I was on vacation so sorry for the delay but good things on the horizon...here is your real estate market update : )
July 6 - It's all in the mix. If we examine the monthly median sales price for all areas & types we get $196,200 today, which is up 7.2% from this time last year. However the majority of that price improvement is due to a change in the mix, not an increase in home sales prices between July 2013 and now. This is revealed if we look at the individual monthly median sales prices for the 3 major types of transactions across Greater Phoenix:
- Normal sales - $205,000 - up 2.5% from $200,000 last year
- REO sales - $134,045 - down 1.5% from $136,050 last year
- Short sales & pre-foreclosures - $138,000 - down 1.4% from $140,000 last year
Two of the categories are down from last year while the third (and most important) is up a mere 2.5%, not much more than inflation.
The big change is in the share of the market that each transaction type has taken:
- Normal sales - 89.7% - up from 79.5% last year
- REO sales - 6.5% - down from 8.7% last year
- Short sales & pre-foreclosures - 3.8% - down from 11.8% last year
The swing away from distressed sales (which have much lower prices) towards normal sales (which have slightly increased prices) accounts for a much larger increase in the overall median sales price than for any of the 3 individual transaction types.
July 5 - Looking at the Affidavits of Value filed in Maricopa County during June we can see that investor purchases have dropped again - down to 13.2% of sales from 14.9% last month and 24.3% in June 2013. We have to go back to October 2008 to find a month with as low a percentage of investor purchasing. However there were still 1,038 investor purchases while in October 2010 there were only 792. During 2008 most investors were on the sidelines waiting for prices to show some signs of stabilization. That happened at the end of March 2009 and the investor percentage immediately shot up to 20%.
The peak month for investors was July 2012 when they purchased 2,698 homes or 33.5% of the total.
Because they do not generate Affidavits of Value, these numbers excluded trustee sales and HUD sales.
July 4 - I don't want to sound repetitive but the current low volume of new listings is quite remarkable. The decline started in earnest in June and we can see that for Greater Phoenix there were 8,465 new listings in that month. This is by far the lowest number of new listings for any June since we started measuring in 2001. June 2013 was the previous low at 9,247. June 2006 was the highest at 15,995. It is all the more remarkable because during the first 4 months of 2014 the new listings were arriving significantly faster than in 2013. May saw roughly the same number as last year. If we look only at normal listings then there were roughly the same number of new listings in June 2014 as in June 2013. There were only 694 distressed listings in June 2014 while there were 1,469 in June last year. So this is where the decline is really taking place.
July 3 - A distinct improving trend has set in though we still have a little way to go until we recover to a fully balanced market. We can see the improvement from the Cromford® Market Index for the single family market in the major and secondary cities:
This is the best looking table for sellers than we have seen this year.
We now see 24 cities showing improvement and only 5 showing deterioration from a seller's perspective. Many of the improvements are substantial including those for:
- Sun City
- Anthem
- Fountain Hills
- Paradise Valley
- Tolleson
- Sun Lakes
- Scottsdale
- Casa Grande
- Gilbert
- Surprise
- Glendale
However the following cities are still deteriorating:
- Litchfield Park
- Avondale
- Goodyear
- Chandler
- Buckeye
The vast majority of areas are also seeing a fall in active listings over the last month. The notable exceptions are :
- Avondale (up 6.4%)
- Litchfield Park (up 5.7%)
- Laveen (up 4.4%)
- Tempe (up 3.6%)
- Chandler (up 2.2%)
- Goodyear (up 1.5%)
- Buckeye (up 1.1%)
We can see a strong correlation between more active listings and a deteriorating market index.