Phoenix Residential Market Report Summary ~ Time To Buy Is NOW!!

                Demand Is Increasing Without Government Stimulus    

                                              

              REO Inventory Is Shrinking With Buyer Demand  

Average Sold Price In Phoenix Market

Average Days On Market Decreasing

Number of Transaction Consistent For Year

Yearly Total Same As 2005

Appreciation By Price Range

Increasing Number Of Cash Buyers

Volume of REO Transaction Down 1.1%

Volume of Short Sales Up 56.5%

Trustee Sales Decreasing - Increased Competition

Third Party Purchases 50% of All Trustee Sales

Phoenix Residential Market Report Summary

Provide By Sean Heideman – (480) 213-5251 – heideman1552@yahoo.com

This data includes single family detached homes, patio homes, condos, and townhomes provided by the Arizona Multiple Listing Service. The monthly charts above are based on trailing twelve monthly averages from November 2010 to October 2011 which shows the total activity in the Phoenix Metropolitan real estate market over a twelve month period. The yearly charts above are based on a yearly average for 2005 to 2010 but a trailing twelve month average from November 2010 to October 2011 for the year 2011. Without the trailing twelve month average for the year 2011, the charts would be substantially skewed and would not portray an accurate view of the market on an annual basis.

As you can see from the first chart above, Cromford Market Index, the first time home buyer tax credit created a great deal of demand in the market similar to the real estate boom from 2004 to 2006. When the government withdrew the first time home buyer tax credit on April 30, 2010, the average sold price and number of transactions decreased and the average days on market increased. Currently the residential real estate market is experiences another buying frenzy that is caused without government intervention or relaxed mortgage underwriting standards. Consumers are jumping into the real estate market because market statistics are indicating the market has hit the bottom and investors can purchase homes at rock bottom prices where they can rent the homes out to receive a 10% to 15% or more return on investment. Due to the current oversupply of homes on the market, real estate prices have not increased significantly but as you can see from Chart #2 the shadow inventory everyone is afraid of is decreasing. Once the supply of homes is purchased real estate prices will start to increase at a faster pace and then it will be too late. Since January 2011, the average sold price has decreased approximately -2.6% (up from last month), the average days on market have decreased approximately -17.1% (down from last month) and the number of transaction has increased approximately +16.2% (down from last month). It should be noted that approximately +35% of all transaction are cash purchases either by investors or homeowners due to tighter lending requirements. The volume of REO purchases since January is down -1.1% and the volume of short sale is up +56.5%. The volume of REO purchases are shrinking due to the increased volume of trustee sales and existing supply of inventory is getting absorbed at a faster rate.        

  

The number of Notice of Trustee Sales is currently experiencing a decline due to the declining number of adjustable rate mortgages coming due and from more lending institutions working harder on helping people stay in their homes. The number of foreclosures “notices” entering the market is expected to continue its decline in late 2011 and early 2012 due to the exhaustion of adjustable rate mortgages created between 2003 to 2007. The percentage of third party purchases (other than banks taking back as REO) has increased substantially since the beginning of this year where we are currently at 50% of all purchases are from third parties. The percentage might appear to be a low number but the last time we experienced this volume of purchase was back in August 2006. The real estate market has reached a level of equilibrium where demand is equal to supply and all buyers are rushing into the market to take advantage of low prices. Once the supply of residential homes is exhausted and demand continues to rise, real estate prices will begin to rise (depends on the sustained level of demand). Time to buy is NOW!! Give us a call to discuss your best competitive strategy, NOW!!