Posts Tagged ‘cromford report’

GREAT NEWS- and for those of you who’ve been waiting to buy, give us a call at 480-243-4242.  (Mike Orr of the Cromford Report is one we quote often on our website as well.  See article below by him.)

This Summer will prove to be one high in competition for the “good” ones out there!

The most impressive thing about the month of March 2011 was the huge unit volume of closed sales. We are currently showing 9,901 closed sales on ARMLS for all areas and types. That is the 5th highest monthly total ever recorded on ARMLS and the second highest sales volume ever for the month of March. The only months which have surpassed it were June 2005 (10,213), August 2005 (10,002), June 2004 (9,973) and March 2005 (9,949).

Meanwhile demand is accelerating while supply is falling quickly.

Supply is falling in almost every geography and price range but is most noticeable at the price ranges below $150,000 and in the outskirts of the valley, particularly in Maricopa (city), Queen Creek, Anthem, Casa Grande and Buckeye, This largely due to enthusiastic buying of homes built in the last 15 years which can be found for sale at a discount of 70% or more compared with their price at the time of construction.

Trustee sales in Maricopa County hit a high number of 5,226 in March, due to the trustees catching up from the Bank of America moratorium in November last year. Notices of trustee sales were only modestly up from February at 5,397, which is not an impressive number given that March contained a lot more working days for lenders than February. As a result the number of homes pending foreclosure dropped sharply during March to the lowest number since March 2009.

Third parties buying at trustee sale made a new record with 1,379 purchases (26.4% of the auctions). This is by the far the largest number of properties ever purchased at trustee sale. Another 3,842 properties got no bids and went to the beneficiary to become REO inventory. This may help slow the fall in the REO inventory listed for sale of ARMLS.

Lenders seem to have noticed the enthusiasm of buyers and having allowed the average list $/SF of REOs to fall between April 1, 2010 ($87.56) and March 20, 2011 ($68.84), they are now increasing them again and the average list $/SF has popped up 3.5% in just the past 2 weeks. Asking prices for short sales and pre-foreclosures seem to have stalled at around $79 to $80 per sq. ft. Normal listings have been increasing in list price for some time, reaching a low of $185.93 on September 24 and rising by 4.5% over the last 6 months to hit $194.37 today.

While average sales prices are very slightly higher in March compared with January and February, there is still no clear sign of a significant trend forming. The median sales price has been stuck at $110,000 for three month now., again with no sign of a major move either up or down over the short term.

With the balance between supply and demand changing quite quickly for the better over the last four months, we are down to an overall inventory level of 4.2 months based on the monthly sales rate. This can be regarded as a "normal" reading for the time of year (it is below the 4.5 we measured in 2002 at the same point in our last "normal" year). This goes a long way towards explaining why prices have stabilized once again.

Currently the trend is for supply to fall further and demand to increase, and if this continues then at some point it is likely to lead to prices moving higher. How soon and how much, it is too early to say. However it is not too early to say that prices are unlikely to fall to any significant degree while this situation persists. Last year the disappearance of the tax credit at the end of April caused the market to deteriorate suddenly in May and pricing fell sharply between July and September. At the moment we see no indication of a similar interruption to the recovery process that is now under way.

(Report from Mike Orr of the Cromford Report)

Please call us at 480-243-4242 if you are looking for a home to purchase and we’ll happily send you a customized list (at no charge) or start shopping here on our website.

Market Summary for the Beginning of March

If you are watching average sales prices then you are probably bored – nothing much is happening at the moment. They are not going up or down, just wobbling around unsteadily like the Inception top, although they gave up around 12% between July and January.

However we don’t advise watching prices right now. They are the very last indicator to turn round at both the top and bottom of a cycle. The indicators you should watch instead are behaving in very interesting ways at the moment. Most of these ways are very positive. Nothing is certain in this world but the current trends are pointing to another market recovery attempt, similar to the one we saw in 2Q 2009.

Supply

We measure supply using active listing counts. These are coming down fast in many (but not all) areas. The total number for all areas & types in ARMLS residential resale as of March 1 was 40,240. On February 1 this was 42,522 so we are down 5.6% in a single month. Last year on March 1, we had 42,139, so we are down 4.5% in 12 months. This latter number doesn’t sound very impressive, but supply was growing last year from June through November, peaking at 45,960 on November 20. Supply has fallen by 12.5% since November 20 and this is a definite signal that overall supply is now on a strong downward trend.

Demand

We measure demand using two primary indicators – recent sales and pending listings – and we also keep a watchful eye on total listings under contract (i.e. pending plus AWC). At the moment we are recording 7,155 sales (all areas & types) during February 2011. This is 8.6% higher than January and 11.4% higher than February 2010. Not too shabby. In fact this is the second highest February sales total for ARMLS (Feb 2005 came top). Pending listings were 11,997 on March 1, up 13.6% from February 1 and 1.8% below March 1, 2010 when we in the grips of tax credit buying fever.

These are good demand numbers.

Supply vs. Demand 

Demand is strong and supply is falling, so that ought to be good for the market. However sentiment is still very negative after the double dip price drop during the second half of 2010 and it always take several months for an improvement in the market balance to be reflected in pricing.

SOUNDS LIKE ONE SITTING ON THE FENCE AND WAITING TO BE SURE IT’S A GOOD TIME TO BUY MAY END UP PAYING MORE! THE INDICATORS ARE STRONG SHOWING THAT THE PRICES WILL START TO GO UP IF THIS CURRENT TREND CONTINUES.  ALSO, DON’T FORGET RATES HAVE BEEN TRENDING UPWARDS AS WELL THIS LAST 6MTS.  THOSE THAT WAIT TOO LONG MAY MISS THE BUS ALTOGETHER!

IF YOU ARE INTERESTED IN READING THE REST OF MIKE ORR’S ARTICLE REGARDING OUR CURRENT LOCAL MARKET- PLEASE CLICK HERE

Please feel free to start shopping for homes on our website or call us at 480-243-4242 to have a customized list emailed over to you or someone you know who’s been thinking about buying a house before this great opportunity to take advantage of our current market is missed!