AZ Real Estate Market Analysis for September 2015

Here are your real estate statistics for last month.  Be sure to call if you have any questions about this report or about how the market is performing.  This report includes MLS data for the past 36 months for Maricopa County only as provided by the FlexMLS system.  Please note that MLS search results fluctuate as data is added to the system and the figures below were obtained on 10/5/2014.

Sellers:

The month of September saw a 3.06 percent decrease in the number of closed sales compared to the prior month.  It is interesting to note that the number of closed sales in September in the past 3 years is nearly identical!  Last month’s numbers showed that we had 5,605 residential properties sell in Maricopa County compared to 5,782 in the month of August.  For sellers, this decline means that fewer homes are selling.  As a result, sellers need to continually monitor their local market to make sure they are pricing and staging their homes to attract the best buyers.

The average sales price decreased slightly from $257,055 in August to $255,518 in September, a decrease of 0.60 percent.   This is the third month in a row that we have seen a drop in the average sale price.  With the shift and leveling off in other numbers, sellers need to pay attention more than ever, as we are seeing prices drop,  homes remaining on the market for a longer period of time, and fewer homes moving to pending status.  In some price ranges and in some locations, sellers are offering incentives to buyers and real estate professionals to ensure that their home is selling.  Sellers who are serious about selling need to ensure that their home is one of the best-priced homes in their local market in order to attract qualified buyers.

The month of September saw the number of homes in pending status drop from 4,472 homes to 4,168, a 6.8% decrease over the previous month.  It is very important for sellers to continue to monitor this statistic, as it is a strong indicator of the number of buyers and sellers that were able to come to agreement on the terms of a contract on a home.  It will also impact the number of closed sales in the months to come.

September numbers showed the months of inventory increased slightly to 3.51 months – a number that has been increasing now for the past five months.  This is the highest number we have seen since March of this year.  This statistic indicates that we have settled very comfortably into a “traditional” or “balanced” market.  This will be important to monitor, as an increase in the months of inventory point towards more homes competing for buyers and more homes staying on the market.  Sellers who want to sell need to ensure that the home price is attractive to buyers with the shift in the market. When demand is low, the buyers have a better opportunity to negotiate the price down and repairs up!

Buyers:

Buyers remain very active in today’s market. However, we are seeing fewer sales this past month.  This could be due to the seasonal shift or it could also be influenced by sellers and buyers not agreeing to the terms of a sale such as inspection repair items, or having an unacceptable appraisal. Even though inventory shows a balanced market, most areas are favoring the buyers due to low demand.

This decline in sales pricing is an indicator that buyers have a small amount of relief when it comes to the average sales price. This is the lowest average sales price since February of this year.  Educated and savvy buyers are taking advantage of these small shifts in the market, especially in light of recent interest rate increases.  Although this may vary from area to area and from price range to price range, buyers need to make sure they are fully informed regarding the specific market in which they have an interest.  This will give them the best chance of being competitive when making an offer.

Buyers also need to make sure they are fully informed regarding the individual market in which they have an interest.  This will give them the best chance of being competitive in the search for a home. Buyers will want to monitor the inventory of areas they prefer.  This past month showed an increase to 3.51 months of inventory – much better than the 1.29 months we had a couple of years ago.  This has the result of giving buyers more “buying power” than in the past several months.

Last, buyers should also make sure they are working with a lender who is knowledgeable about the latest lending trends and options. 
 

STOP!

As a reminder, you need to meet with a real estate professional to see how statistics impact the area where you are considering selling or buying.  Blended statistics will not be as accurate as a more detailed report that your real estate professional can provide to help you with your decision making.

Would you like to know what is happening in your neighborhood?

Would you like to know the value of your home?

Do you need help deciding whether to sell or not or would you like to know if now is the right time to buy?

Just Listed | Central Corridor | $169,900

1120 W. Missouri Ave

Phoenix, AZ 85013

Welcome to your new home with 3 bedrooms + a bonus room. Inside laundry is just off the den/bonus room. Open kitchen with a breakfast bar and room for a kitchen table. Large lot with grass, flower beds and citrus trees (lemon, pomegranate and orange). Nice covered walkway on the side of the home. Shed for storage in the backyard. Garage was enclosed in the 60s to create the bonus room - square footage is likely larger than 1302 due to this enclosure. Copper plumbing in the home, Trane HVAC only 5 years old and water heater is 3 years old. Termite warranty with Budget Brothers is transferrable and only costs $100 to renew when ready.

Want the Inside Scoop on the Phoenix Housing Market?

According to the latest reports from Mr. Michael Orr with  ASU’s W.P. Carey School and The Cromford Report and Mr. Tom Ruff, real-estate analyst with The Information Market owned by ARMLS, Phoenix has recovered 65% from the housing debacle. Homeowners that purchased before May of 2004 and did not refinance between 2005-2009 should have equity in their homes. In 2009, 50% of Phoenix homeowners were under water. That number has dropped to 19%!

Our inventory here in Phoenix is now considered normal, meaning we have about 30,000 homes and condos listed for sale in the MLS. This year has been a slow market as our demand is way down from California, Canada, and investors. Millennials, the age group for 18-35, are renting or have moved back with Mom and Dad. Before the crash, everyone wanted to own a home. Now they want to have the freedom to travel and change jobs and cities easily.

Of course there is no way to know when our market will pick up but traditionally the best time to sell in Phoenix is January through June or even July. We are confident that 2015 will usher in buyers that have been holding back for whatever reason as well as the 50,000 plus folks that were foreclosed on and now can buy again.

If you want to know more about our market or your neighborhood/zip code in particular, Please do not hesitate to call. Pass this information to your family and friends to give them the scoop on the national and local housing markets!

Congrats to our August Buyers & Sellers

When trust is high between clients and agents, wonderful results happen! Amy and Derrick Pauling moved to Texas and a year later decided to sell their beautiful Scottsdale home. Their tenant lived “comfortably” in the home and it showed! After arranging landscape clean-up, home repairs, heavy duty cleaning, and navigating through a new FEMA flood zone designation, it sold! And they never had to return to Phoenix for any of it, although Amy did light a lot of candles and maintain steady prayers for weeks! We are sorry they are staying in Texas but we are honored that they placed their trust in us to get them results. And our thanks for referring Ashley! We will take good care of her, too! Our best to the Paulings; it has been a pleasure being your agents!

How many contracts does it take to get Peg and Rick Johnson a home in Glendale? The third house was the charm! Our thanks to them for keeping the faith, maintaining their sense of humor, and not being discouraged every time they lost a house to another buyer! They now have a lovely home and Peg can send photos back east in January when she is floating in her beautiful pool with the Arizona sun overhead! Our congratulations to them both and our wishes for many happy years here with children and grandchildren!

After one year in his lovely Piestewa Peak home, Joe Enright decided to sell. Although we met him just last year as our buyer, he called us to help him through the sales process. It only took three weeks to find a cash buyer and help Joe move on to a new phase of his life. We are so happy that we were able to be a part of his transition and we wish him the very best with his children and his new home! May health and happiness always be a part of his life!

Phoenix Real Estate Market Update

Stats from ARMLS:

Monthly Sales: June sales volume was 12.3 % lower than last year, at 7,219 compared to 8,228. Month-over-month numbers were down 3.0%.

·        New Inventory: In June 8,677 new listings were added compared to 9,246 last year at this time, a decrease of 6.2%.

·        Inventory:  The total number of listings for sale was 42.0% higher in June of 2014 compared to June of 2013…27,708 compared to 19,511 last yr.

·        Average Days on Market:  82 days compared to 66 days in June of 2013.

·        Foreclosures pending dropped again in June to 6,476, falling 40.5 % year over year!!

·        Distressed sales total (short sales plus lender owned sales) 720 which represented 10.0% of total sales…down 73.9% year over year!!

The Outlook (from Michael J Orr, Director Center for Real Estate Theory and Practice W P Carey School of Business Arizona State University and the Cromford Report.

There is a growing shift towards a more balanced market, though it remains favorable for buyers at the moment. Demand remains quite weak, but comparisons with last year will become much easier after July because August through December saw a strongly declining trend for demand in 2013. The fall in new listings and the tendency of sellers to take existing listings off the market means that the supply of active listings is still dropping. This is giving sellers a reason to be relieved, but it makes for low volumes and a lack of urgency. Sellers with no patience might be better waiting until demand climbs back to match the supply.

Everything that we mentioned last month is still contributing to the weak demand:

·        Low participation by first time home buyers

·        The inhibiting effects of massive student loan debt

·        Millennial preference for the flexibility of renting

·        The foreclosure wave in 2008 through 2012 which has introduced a new sensitivity to the fact that home ownership can sometimes be financially hazardous

·        A large group of former home owners who have not yet repaired their credit enough to re-enter the market

·        Low rates of household formation, especially among 20-30 year-olds (18.4 Million are living with parents!!)

·        A growing wealth gap causing stronger demand for high end homes but leaving large numbers of people renting for the foreseeable future

In June we saw 25 closed sales of homes priced over $2,000,000 which represents a much stronger total than May's 18, but is still a long way below April's 39. Homes over $1,000,000 represented 11.5% of the dollars spent, up from 10.7% in May, but well down from the 13.4% in April. We still have 29 pending listings for homes of $2,000,000 and over which is a strong start to July.

We expect the annual appreciation rate to drop from the current 7% to 8% back into "normal" levels of 5% to 6% rather than recovering to the 15% to 20% we saw just a few months ago. I expect this rate will bounce around but continue to trend lower over the next 5 to 8 months.

What does all of this mean to you?

If you are a buyer, this is a good time to buy but when you find what you like, write a contract. Even though days on market are longer, homes are still getting competing offers. You snooze, you might just lose!

If you are a seller, you must be priced right to draw an offer. Homes priced too high are sitting even those that have been remodeled or updated. If you want to “test” the market with a high price, you may have a listing but not a sale.

If you are curious about the current market value of your home, please call and we will run the comps for you. Those of you that bought prior to 2004 or during the downturn (2008-2012) may be surprised to find that you have equity in your home!!

Your Realtors for Life,

Sammy Glassman & Marlys Lazarus

Congratulations to our June Buyers!!!

Taylor Murray and Dr. Lindsay Emerick leap for joy as they get ready to move into their new Phoenix home! And the leap is well deserved after overcoming a seller whose favorite word, in response to everything, was “NO!” Nearly derailed by the seller’s failure to sign an FHA document on time, and rescued by a determined lender, everything worked out. Now it’s forward into a new life together in their lovely home! We wish them the very best and many years of happiness!

Our heartfelt congratulations to Dr. Sarah Detlefs on her new home. It was a family adventure as we all moved from house to house until we found a great home in a welcoming neighborhood. And it has the perfect room for the kitties as well as the security that made the parental units very happy! We are so pleased that we have been able to be a part of the journey as Sarah begins her next adventure!

Real Estate Market Update for April 2014

Here is our Real Estate Market Update compiled from Michael Orr’s ASU Monthly Housing Report, ARMLS STAT and Elliott Pollack Data. 

April Stats from ARMLS

·        Monthly Sales: April sales volume was 12.5 % lower than last year at 7,659 compared to 8,754. Month-over-month numbers were up 14.1%.

·        New Inventory: In April 10,027 new listings were added compared to 9,870 last year at this time, an 1.6% increase.

·        Inventory:  The total number of listings for sale was 47.5% higher in April of 2014 compared to April of 2013…29,627 compared to 20,083 last yr.

·        Month’s Supply:  Currently we are at 3.87 months

·        Average Days on Market:  82 days compared to 70 days in April of 2013.

·        April median new list price was $223,000 which is a 14.4% increase year over year!

·        April median sales price increased 9.9% to $189,000 year over year!

·        Foreclosures pending dropped again in April to 4,693, falling 50% year over year!!

·        Distressed sales total (short sales plus lender owned sales) 803 which represented 10.5% of total sales…down 61.9% year over year!!

Sales Activity and What is the STATE of the Market?

(from Tom Ruff / The Information Market compliment of the ARMLS Stat report)

·        Over the past 10 months, median sales prices have remained relatively flat fluctuating between $180,000 and $189,000

·        Even though the April Sales volume was down 12.5 % …the decline in sales volume occurred entirely on the distressed side of the market with short sales down 809 and bank sales down 496 year-over-year. Comparing normal sales, we actually saw an increase with 210 more normal sales year-over-year.

·        STATE OF THE MARKET:  FACT…if we look at the 14-year running average for MLS sales volume for the month of April there were 7,658 average sales, which isnearly spot on to the sales volume in April 2014 of 7,659 sales.

HOWEVER… If we apply the same 14-year running average methodology for home sales in Maricopa County but look at public records, then April has averaged 9,681 home sales. This April, 8,197 home sales were recorded. The sale total for April 2014 is 15% below our 14-year running average.

In addition, the 14-year running average compares only the total number of homes sold and does not account for the existing housing stock when the sales occurred.   Today, there are a quarter of a million more homes in Maricopa County than existed in 2003. The reason for mentioning 2003 is that ARMLS sales volume this year has closely mimicked ARMLS sales volume in 2003. Publicly recorded affidavits of value tell us there were 23% fewer home sale transactions in April this year in Maricopa County than in 2003.

·        Positive signs:  Three potential large pools of future buyers like millennials, boomerang buyers, and retiring baby boomers desiring an Arizona resort lifestyle are on the horizon…the logical question now is when will these potential buyers become homeowners?  This month, Stephen Kim, an equity researcher with Barclays, talked about the return of the first time buyer, a trend he expects to emerge later this year. He further expects overall demand to return to normalized levels in 2016! 

Kim’s three keys to this happening are:

§  Job Growth is reaching an important threshold for improved household formation

§  Credit availability is starting to loosen

§  Affordability still favorable…buying a home is still 20% cheaper than renting

If you look at the total sales per month for 2003 and compare to 2014… very similar… will this trend continue? No one has a magic 8 ball so the take away is that our housing market is ever changing and right now it is a great opportunity to buy or sell. Buyers have more inventory, more negotiating power and prices are still good. Sellers need to be realistic about selling price and be patient, especially if the house needs updating. Price it accordingly and it will sell! Fix it up and it will sell for higher dollars and faster!

If you or anyone you know is in the market to buy or sell, please pass our information to them. We are never too busy for your referrals!