Phoenix Rising?!

SALES Month over Month

Sales took an 8.4% upward turn in October to 7,020 units.

SALES Year over Year

Sales in October (7,020) were 7.2% lower than the October 2011 figure. Lower sales figures are tied to lower inventory levels, which a year ago were 16.7% higher. Lack of inventory, particularly in the lower more affordable ranges, is the current market challenge.


New listings added to the market in October rose 10.3% to 9,821. Overall, the new listing trend line has been relatively flat since January. The October figure is only 1.7% above the same figure a year ago.


Total inventory, which has been trending downward since October 2007, when the inventory hit an all-time high of 58,178, dropped to a 68 month low in June of this year (19,857). Since June the total inventory figure has seen small incremental movement, averaging a 3.48% monthly gain. This month the total inventory metric came in slightly lower at 22,702, compared to 22,862 in September.


MSI in October landed at 3.23, down slightly from September’s 3.53. At this level, the market is still regarded as a Seller’s market. MSI as presented in STAT, is seen as a barometer of overall market health, and is not intended to be used to assess MSI in small market niches. Further, MSI varies greatly from the lower end of the pricing spectrum to the higher end.


Both new list price metrics continued the upward trend lines begun in December 2011. The median list price rose to $174,900, from $140,000 at the start of 2012. In fact, the market had not seen a median list price of $174,900 since October 2008, when the median list price was in its initial stages of crashing. October’s average list of $264,917 increased from $243,152 in January 2012. The Valley has not seen an average list price in the $264,917 range since the February/March period of 2009, when list prices were on their way down.


Following the path of new list pricing, both sales price metrics continued on their upward trend lines in October. The median price stayed level compared to September, at $150,000 for both months. The last time the market saw a median price in the $150,000 range was November 2008. The average sales price landed at $203,867, a level not seen since November/December 2008.


Foreclosures pending continued on their steady downward trend, falling 7.72% in October to 13,458. Foreclosures pending reached an all-time high of 50,568 in November 2009, and have been falling monthly since that time. Foreclosures pending in the 13,000 range were last seen in January 2008. A range of 4,000-6,000 foreclosures pending is widely considered to be normal for the Valley.


Distressed sales as a percentage of total sales fell in October to 39.1%, continuing the downward trend that started from the high of 74.1% in September 2010. October’s lender owned sales (906) accounted for 12.9% of total sales. Short sales (1,837) accounted for 26.2% of total sales, representing over a 2:1 ratio of short sales to lender owned.
A comparison of metrics from September 2010 with current distressed sales metrics underscores how much the market has improved. In September 2010, at the height of distressed properties’ influence, lender owned sales accounted for 43% of total sales, compared with 12.9% in October 2012. Short sales in September 2010 accounted for 31.1% of total sales, compared to last month’s 26.2%.
Before November 2011, lender owned sales outnumbered short sales in the total sales makeup. Since then, the number of lender owned sales as a percent of total sales has fallen behind that of short sales. The reversal of the lender owned and short sale ratio in the current market reflects lender appetite for workout over foreclosure, a big win for Sellers and the community.


Days on market bumped up two days in October to 70, but remained on the downward trend line begun in February 2011. DOM in the 68-75 day range was last seen in mid 2006, right before the bubble burst in the Valley. Market wide DOM is seen as a barometer of overall market health and should not be used to predict DOM in small market niches.


This month STAT reveals more steady positive gains. All four pricing metrics continued to rise. In fact, median sales price showed an upswing of 38.5% from its decade low of $108,300 in May 2011. Average sales price gained 34.7% from its low of $151,368 in August 2011. Similarly, median list price gained 49.5% from its decade low of $117,000 in January 2011. Average list price gained 40.4% from its low of $188,698 in July 2011. Hindsight lends the perspective of how far the market has progressed, which is not seen in a monthly myopic view of statistics.
Foreclosures pending continued their march downward to a level not seen since January 2008 when foreclosures pending were on the rise. Distressed sales as a percentage of total sales declined to its lowest level (39.1%) since STAT began tracking in January 2010. Further, short sales outnumbered lender owned sales 2:1. October’s closed sales ratios were 5:2:1 (normal: short sales: lender owned). At its height, in September 2010, distressed sales represented 74.1% of total sales.

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