(Please click on photo above for a downloadable PDF of the article written by Mike Orr of the Cromford Report; bullet points listed below)
Last month; in Metro Phoenix’s Real Estate Market we saw the supply of REOs increased substantially, short sales were stable and normal listings declined in number:
- REO listings grew 11% from 5,087 to 5,626 (Greater Phoenix, all types)
- Short Sales / Pre-foreclosure listings grew 1% from 16183 to 16,347 (Greater Phoenix, all types)
- Normal listings fell 5% from 18,123 to 17,226 (Greater Phoenix, all types)
- Because sales pricing is higher than last year, we saw a more significant 8.6% jump in dollar volume which is good news for the optimists.
- It seems likely that almost anyone who wants a "starter home" in 2010 and could get approved for a home loan has already purchased one before the Tax Credit expired at the end of April.
- Overall we can say with confidence that the luxury market is now showing strong signs of improvement while the low end end of the market is weakening significantly. The weakness in lender-owned homes is particularly noticeable, with REO sales volume down 36% year on year.
- These annual charts are very slow to react to changes but confirm the bottom of the market is now over a year behind us. The most important measures of real home pricing - the average price, median price and average $ per sq. ft. of homes that actually sell have been moving in a general upward direction for Greater Phoenix since April/May 2009.
- New notices of trustee sale dropped another 8% from April, to the lowest monthly number (6,471) since July 2008. Trustee sales also dropped 8% to 4,090, the lowest total since November 2009.
- Nevertheless market distress remains very high and will dominate the market for at least the next two years. Short sales are becoming more significant as each month goes by, while lender-owned properties become gradually less so.
- The market is still fragile and although it has stabilized over the last year, we must caution that in the last several days the Cromford Market Index has been falling fast due to weakening demand matched with a fairly strong and stable supply.
- The biggest question we have right now: Are the changes we have seen in the last month merely due to the end of the tax credit or are the result of more significant changes in the demand for housing??
Stay tuned for next months update and we hope to be able to answer that question for you. In the meantime; if you’d like to discuss your particular situation with one of our very talented and experienced Realtors, please call us at 480-243-4242.