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February Phoenix East Valley Real Estate Market Report

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February Phoenix East Valley Real Estate Market Report

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February Phoenix East Valley Real Estate Market Report

  1. 1. February 2014 Phoenix Real Estate Market Report February 2014 Phoenix Market Report
  2. 2. Market Snapshot – All MLS Market Summary for the Beginning of February The market stability and balance which prevailed between the end of November and mid January seems to be coming to an end. Both demand and supply are now rising, as is normal for the time of year. However it is the rise in supply that is having the stronger effect and this is bad news for sellers. Sales were very low in January, giving us the lowest January sales total since 2009. Pending listings have risen sharply since the start of January but started at such an unusually low point that they are still at their lowest level for early February since 2008. In fact the weekly pending listing chart looks a lot like 2007 which is not a year we take any pleasure remembering. We expect 2014 to do better than 2007 once we get past the end of February, but at the moment the tepid demand is not making much of a dent in the rise in active listings. If we were going to have a strong spring for sellers then active listings would have peaked in mid January and be falling by now. On the positive side, the new supply is almost all non-distressed, whereas in 2007 we faced an onslaught of foreclosed homes coming to market. New listings have been arriving at a rate which is about 9% higher than last year, so if demand remains below par we can probably expect to get back to a "normal" level of supply around 32,000 listings (including UCB) during the second half of this year. With supply normal and demand some 20% below normal we are heading towards a classic buyer's market. This means increasing concessions from sellers and erosion of their pricing power. The monthly median sales price is already starting to look a little wobbly, both overall and in a number of specific locations including the City of Phoenix. The medians are not assisted by the relative strength in the luxury sector. However the average price per square foot is being given a significant boost by the luxury segment and although the monthly average fell between December and January, the under contract $/SF is still moving upwards. If current trends stay in place then we expect no significant sales price rises during the first half of 2014. Indeed, if current trends stay in place through the second half of the year then pricing is likely to be lower by January 2015 as sellers compete with each other for the attention of the smaller pool of buyers. However, five months is a long time in the ever-volatile Phoenix housing market and trends may very well change by then. Here are the basic ARMLS numbers for February 1, 2014 relative to February 1, 2013 for all areas & types: (Continued next page…) February 2014 Phoenix Market Report
  3. 3. Market Snapshot – All MLS Market Summary for the Beginning of February (Continued) Active Listings (excluding UCB): 25,541 versus 17,573 last year - up 45.9% - and up 11.0% from 23,091 last month Active Listings (including UCB): 28,526 versus 21,757 last year - up 31.1% - and up 12.7% compared with 25,319 last month Pending Listings: 5,723 versus 9,523 last year - down 39.3% - but up 23.9% from 4,667 last month Under Contract Listings (including Pending & UCB): 8,595 versus 13,707 last year - down 36.8% - but up 25.7% from 6,895 last month Monthly Sales: 4,728 versus 5,928 last year - down 20.2% - and down 20.9% from 5,975 last month Monthly Average Sales Price per Sq. Ft.: $125.13 versus $108.05 last year - up 15.7% - and down 1.4% from $126.89 last month Monthly Median Sales Price: $182,700 versus $154,900 last year - up 17.8% - but down 1.4% from $185,000 last month We are seeing an increasing number of price cuts among the active listings and a fairly rapid rise in the average number of days on market for closed sales. The average days on market for active listings is not rising, because there are plenty of new listings coming along that start with zero for days on market. This is not a good sign. The Cromford® Market Index has started to head downwards again, though it currently remains above 90 at the lower end of the balanced zone. Should it drop below 90, as seems very possible, this will signal that a buyer's market is fully in effect. Many sellers are understandably reluctant to accept that the market has changed so dramatically in just 7 months, but they will probably need to be very realistic in the coming few months and price and negotiate accordingly. We will need a significant acceleration in demand to change the current direction of the market. The most obvious potential cause of such a change would be an increase in the flow of money from lenders due to a relaxing of their guidelines, especially for first time homeowners. The lowering of the FHA loan limits has had a noticeable effect in the opposite direction. It will impact the price range from $275,000 to $375,000 in a major way. The introduction of the Dodd-Frank Act provisions has had little noticeable effect so far except by putting more constraints on seller financing by larger investors. However its main provisions are designed to limit mortgage money flow rather than encourage it. In contrast, Money is flowing well to the jumbo mortgage market and, as a result, 2013 was easily the best year since 2006 for the luxury home market. Another possible positive change in demand would be increased household formation and home buying among those aged 25-35. At the moment this age group is placing stronger demand on rental supply and home purchases seem to be occurring to a lesser extent than for earlier generations. February 2014 Phoenix Market Report
  4. 4. Market Snapshot – All MLS Cromford Demand Index™ is a value that provides a short term forecast for the demand for resale homes in the market. It is derived from the trends in pending and sold listings compared with historical data over the previous four years. Values above 100 indicate more demand than usual, while values below 100 indicate less demand than usual. A value of 100 indicates the demand is close to normal. Cromford Market Index™ is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market. Cromford Supply Index™ is a value that provides a short term forecast for the supply of resale homes to the market. It is derived from the trends in active listings compared with historical data over the previous four years. Values above 100 indicate more supply than usual, while values below 100 indicate less supply than usual. A value of 100 indicates the supply is close to normal. February 2014 Phoenix Market Report
  5. 5. Market Snapshot – All MLS February 2014 Phoenix Market Report
  6. 6. Active Listings – All MLS February 2014 Phoenix Market Report
  7. 7. Sales Per Month– All MLS February 2014 Phoenix Market Report
  8. 8. Average Sales Price– All MLS February 2014 Phoenix Market Report
  9. 9. Market Snapshot – Mesa February 2014 Phoenix Market Report
  10. 10. Active Listings – Mesa February 2014 Phoenix Market Report
  11. 11. Sales Per Month– Mesa February 2014 Phoenix Market Report
  12. 12. Average Sales Price– Mesa February 2014 Phoenix Market Report
  13. 13. Market Snapshot – Gilbert February 2014 Phoenix Market Report
  14. 14. Active Listings – Gilbert February 2014 Phoenix Market Report
  15. 15. Sales Per Month– Gilbert February 2014 Phoenix Market Report
  16. 16. Average Sales Price– Gilbert February 2014 Phoenix Market Report
  17. 17. Market Snapshot – Chandler February 2014 Phoenix Market Report
  18. 18. Active Listings – Chandler February 2014 Phoenix Market Report
  19. 19. Sales Per Month– Chandler February 2014 Phoenix Market Report
  20. 20. Average Sales Price– Chandler February 2014 Phoenix Market Report
  21. 21. Market Snapshot – Tempe February 2014 Phoenix Market Report
  22. 22. Active Listings – Tempe February 2014 Phoenix Market Report
  23. 23. Sales Per Month– Tempe February 2014 Phoenix Market Report
  24. 24. Average Sales Price– Tempe February 2014 Phoenix Market Report
  25. 25. Market Snapshot – Queen Creek February 2014 Phoenix Market Report
  26. 26. Active Listings – Queen Creek February 2014 Phoenix Market Report
  27. 27. Sales Per Month– Queen Creek February 2014 Phoenix Market Report
  28. 28. Average Sales Price– Queen Creek February 2014 Phoenix Market Report
  29. 29. Market Snapshot – Scottsdale February 2014 Phoenix Market Report
  30. 30. Active Listings – Scottsdale February 2014 Phoenix Market Report
  31. 31. Sales Per Month– Scottsdale February 2014 Phoenix Market Report
  32. 32. Average Sales Price– Scottsdale February 2014 Phoenix Market Report
  33. 33. Market Snapshot – Gold Canyon February 2014 Phoenix Market Report
  34. 34. Active Listings – Gold Canyon February 2014 Phoenix Market Report
  35. 35. Sales Per Month– Gold Canyon February 2014 Phoenix Market Report
  36. 36. Average Sales Price– Gold Canyon February 2014 Phoenix Market Report
  37. 37. Market Snapshot – Apache Junction February 2014 Phoenix Market Report
  38. 38. Active Listings – Apache Junction February 2014 Phoenix Market Report
  39. 39. Sales Per Month– Apache Junction February 2014 Phoenix Market Report
  40. 40. Average Sales Price– Apache Junction February 2014 Phoenix Market Report

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