Phoenix Real Estate Market Update September 2014

Phoenix Real Estate Market behaving, oddly quiet?

Monthly Sales:
Monthly sales are down here about 5% since last month, and almost 9% since last year.
New Inventory:
Oddly, we’re also experiencing new low inventory, down almost 17% from this time last year. In August 2014 we saw the lowest total new listings we’ve seen in the last 14 years. But, there’s a couple things happening that are leading to this scarcity, which are, do you have equity or do you NOT have equity?
If you have equity, most likely you purchased your home before May 2004 and you didn’t refinance between early 2005 and mid 2009, you could/should have equity. You have options if you’re in this position, which would be to just stay put or trade up. The way the market is going, if you’re qualified, your negotiation power could go a bit further as there is some advantage for Buyers at the moment. So if you’re thinking about buying and or selling your current property, we’d love to show you what options are available to you.
Now if you’re on the other side of the equation, and you bought a home from February 2005 to July 2008 or you refinanced during this period, you may have to sell for less than what you paid, which adds to a lack of new listings unless you pursue a short sale. Unfortunately, this also eliminates a group of “move up” buyers that would/could have been using that equity to buy up, thus slowing new listings AND demand. If you’re in this position, your options are really to just, stay where you are (which may or may not make financial sense), do a short sale, or let the home go to foreclosure. If you did a short sale years ago and are now looking to buy, make sure to talk to a loan officer that understands the programs that are available to you, as well. Either way, if you’re not sure if you have equity, or you know you don’t and want to know your options, we specialize in helping Sellers so please think of us first and we can walk you through the process.
Ok now that we’ve addressed this topic a little more in depth, let’s move on.

Phoenix Real Estate Market

Total Inventory:
Is up almost 27% since last year, but only .5% since last month. Right now we have 27,066 total active properties in the ARMLS.
Months supply of Iinventory:
Is hovering around 4 months, nothing drastic has changed here recently.
New list prices:
Although we saw a slight dip at the end of last year, the spring rebound led the year to put the year over year average at 5.5%.
Sales Prices:
The Average sales price last year rose to $235,000, and is currently at $249,000. The median sales price is up to $195,000, up 8% since last year.
Sales Price forecast:
The projections for the upcoming month predict a price drop in both the estimated average price and median sales price.
Foreclosures Pending:
Is around 6,000 units, and this includes residential, land and commercial, and only for the Maricopa County.
Distressed sales:
Have been holding around 10% of the monthly sales, for a total of 660 in August of 2014. If you’re facing foreclosure, we’re still going strong helping those that need to know their options, so if you’re in that situation please feel free to reach out.
Average days on market:
Since last year has grown 29 days, and gained a couple days since last month. This can fluctuate from sub market to submarket, so don’t take this as gospel for your home. If you want to know how long it would take for you to sell your house in this market, make sure to speak with a qualified professional.
Closing thoughts:
I feel like I’ve been sharing a lot of information about the Phoenix real estate market regarding the lack of inventory, why first time home buyers aren’t keeping up with the investor demand of years prior, and it is not really “news” at this point. I want to diverge from these stats for a second to talk about, stats.
Even though we’re not being firehosed with coverage of the residential real estate market, there’s still in the interest in what’s happening in the real estate market, as it touches and affects us all in some way. However, there still is a lot of confusion of where to get reliable information and how to interpret it in a way that is meaningful to you. For instance, the value of your home. Something that data aggregate companies would like us to believe is that the value of our homes changes quite rapidly and frequently, which, in a historical perspective, could not be further from the truth.
Let me expand on this. The accepted theory is that home values change quite slowly and should mimic the general rate of inflation, which is currently around 2%. For Arizona real estate, the median sales price in September of 2013 was $185,000; in August 2014 it increased 5.4% to $195,000. This average sales price was taken from the sum of all the homes sold through the Arizona Multiple Listing Service. If we drill down even more to just Maricopa County records and look at the median sales price just from traditional sales, and again look at the median price from the same August 2013/August 2014 comparison, we are shown a 1.7% increase.
With websites that make it seem as simple as a “type my address get a value” sort of insight, there is a real disconnect between the real estate professionals opinion and what the consumer perceives. If you’re on the consumer side, please realize these websites, although they have their place in the online space, are an aggregate of data that spews us what some computer tells you in 30 seconds. There’s simply no way an algorithm can take into consideration all the fundamentals and qualitative perspective it takes to personalize an accurate report of what your particular property could fetch in the current market. I would put as much weight on it as reading a daily horoscope; entertaining to read but not going to take it seriously.
With that being said, whatever market you’re in, seek out professionals that have their thumb to the pulse of what’s happening in your own backyard. If you’re in a position where you’re actually considering selling, buying, short selling, etc, do yourself the favor of stepping away from the “shouting garble” on the web and choose a local professional that can provide you with real, local, personalized insight.
Tracy (G+) is an Arizona Short Sale Realtor, Investor, Rehabber, and Foreclosure Expert.
She also is an avid blogger, vlogger, contributor to Real Estate Magazines, and hosts Real Estate Rescue, a show dedicated to the distressed property market.

Data provided by ARMLS/Cromford Report.

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