Wednesday, April 4, 2012
Phoenix Real Estate Market Report Summary ~ March 2012
Phoenix Real Estate Market Report Summary
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 April 2011 to March 2012 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 2011 but a trailing twelve month average from April 2011 to March 2012 for the year 2012. Without the trailing twelve month average for the year 2012, 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, Position Realty 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 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. As found in the Average Sold Price chart above, real estate prices have been increasing steadily since October 2011 due the increase in demand. The current supply of homes for sale on the market is 20,542 where a year ago there were 48,000 homes for sale.
Since October 2011 (6 months ago), the average sold price has increased approximately +18.6% (up from last month), the average days on market have decreased approximately -2.2% (down from last month) and the number of transaction has increased approximately 15.6% (up from last month). The largest price increase over the last 12 months was experienced last month with a price increase of +8.9%. 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 October is down -40.2% and the volume of short sale is up +2.6%. The volume of REO purchases are shrinking due to the increased volume of trustee sales, more banks are accepting short sale transaction and existing supply of inventory is getting absorbed at a faster rate.
The real estate market has reached a level of equilibrium where demand exceeds supply and all buyers are rushing into the market to take advantage of low prices. As more and more buyers enter the market and as more of the supply of residential homes are exhausted, real estate prices will increase at a faster rate (depends on the sustained level of demand). Trying to “time the market” for the perfect time to buy is nearly impossible but there is no better time than now to purchase. Real estate prices are at an all time low (not for long), mortgage rates are at a historical low and the market is improving both in terms of prices and the overall economy. Time to buy is NOW!! Give us a call to discuss your best buying strategy, TODAY!!