Maricopa County Phoenix Metro Arizona Market Update - February 2012
This is the Market Update for the end of January, 2012. January was a very interesting month as you will see in the following charts and dialogue.
Besides the distressed property analysis that we always talk about, the report centers on the Average Sales Price of homes, New Listings entering the market, and the total number of Active Listings on the market. We are going to talk about how these three metrics are changing, how they inter-relate, and what to be on the lookout for in our current market.
The average sales price for January is the highest we have seen since August. This reflects an ongoing significant decrease in the number of homes on the market →fewer homes to choose from →more competition for those homes →higher prices.
At the same time that prices are rising due to decreasing inventory, January marked the highest number of new listings to the hit the market since August. It will be interesting to watch how these somewhat conflicting metrics resolve themselves.
Finally, we have included a chart that shows overall inventory – not just new listings – to show you the steady decline of available homes on the market.
Distressed Sales Analysis:
A bank owned/foreclosure home is one that the seller no longer owns – it has been taken over by the lender(s) who had a note on the home. Short sales are homes where the seller is negotiating with the bank to “forgive” a portion of the debt in order to avoid foreclosure.
January statistics saw the number of bank owned/foreclosure sales DECREASE by 15.9%, short sales decrease by 22.7%, and traditional sales drop by 17% over December; however, the overall comparative percentages remained the same, with foreclosures moving up to 28.4%, short sales dropping to 29.4%, and non-distressed sales moving up to 42.1% of all sales in January.
This statistic means that the competition from foreclosure properties decreased while traditional sales from sellers with equity increased. Sellers and buyers need to monitor this trend to see how the market continues to respond to the current inventory.
Average Sales Price Analysis:
With the decrease in inventory, it should come as no surprise that home prices continue to rise. January saw an increase of 1.0% in price over the prior month. The average increased from $168,365 to $170,133. This is the highest average we have seen in the market since AUGUST of 2010! Although this is very good news for sellers, sellers need to remain cautious as they see the impact that appraisals and final loan underwriting have in validating these increases.
For buyers, it is important to be careful about this shift in the price of homes. This increase means that buyers once again have less buying power than they did in the prior month. Although we have no idea what will happen in future months, the shrinking inventory could provide even more competition for homes on the market, which could result in even higher home prices. More than ever, we can help make sure you have the best possible information regarding the market value of homes and to carefully monitor this trend to see how it will impact the availability, pricing, and terms associated with purchasing a home.
New Listings Analysis:
ATTENTION! January saw 8,745 new listings enter the market – the highest number in one month since August of 2011. It is normal to see new inventory increase in January, as sellers wait until the holidays are over to bring new inventory to the market. At a time when buyers are competing to find a home, this number means they will have even MORE choices than in the prior months. Sellers should monitor this new inventory to see how it might impact the sale of their home. In this great market, it is even more important that sellers need to make sure they remain as the top choice for active buyers in the marketplace. If your home is not selling in this aggressive market, it is more than likely a pricing issue – buyers are still looking for the best value possible.
Buyers pay attention! January brought you 8,745 more options! This is potentially good news as buyers continue to submit multiple offers on available inventory. More than ever, it is essential that you take advantage of this new inventory. Let us help you develop your strategy for succeeding in a market that is constantly changing.
Active Listings Analysis:
January saw another DECREASE in the number of listings – a decrease of 4.3% over the month of December! This is the lowest number of active residential properties listed in the MLS in the 36-month reporting period.
Sellers need to make sure that they continue to watch this trend to determine how their homes should be priced in order to be competitive AND the terms that will need to be available for prospective buyers in order to take advantage of this market.
The current market means that buyers continue to have fewer homes to consider than in prior months. Continue to monitor this statistic, as it WILL be the statistic that indicates how much inventory you will have to preview and how quickly you will need to act … the lower the number, the more likely the competitiveness for lower priced homes will remain part of the current market. As always, market activity is local and can be researched with me to determine the activity and desirability of the homes that are of interest to you.
The numbers above represent the entire Phoenix MLS in Maricopa County, Arizona.
Would you like to know what is happening in your neighborhood? Just call or email us and we'll be happy to help.