Phoenix Real Estate Trends-August 2011-Buyers or Sellers Market?
After setting all sorts of records in June, and a better-than-average July, August came in with mixed results.
ARMLS recently released the numbers for August/2011 in their monthly STAT Report, and they are very eye-opening. Here is a breakdown of what happened in August/2011 in the Metro Phoenix Real Estate Market:
Sales (Month over Month)- Sales were up 3.9% (compared to July/2011), with a total of 8,717 closed listings. Advantage: Seller
Sales (Year over Year)- August/2011 sales (8,717) were up 18.4% over August/2010. This represents the third-highest August sales figure in the past decade, surpassed only by August/2004 & August/2005. Advantage: Seller
New Inventory- Rose in August to 10,089, a 10.4% increase over July. This is the first time we've seen an increase in new monthly listings since March/2011. Advantage: Buyer
Total Inventory- We now have 7 months in a row of falling inventory, with August/2011 coming in at 26,983, which is 2.4% below July's figure. Advantage: Seller
Months Supply Of Inventory (MSI)- Decreased from 3.3 months in July/2011 to 3.1 months in August. Generally, an MSI below 4 indicates a seller's market, between 4 and 6 represents a balanced market, and above 6 represents a buyer's market. Advantage: Seller
New List Prices- The median new list price remained unchanged at $124,900, while the average new list price rose .2% to $189,200 from last month. Distressed sales (short sales and bank-owned homes) represented 67% of the total sales in August. REO and short sale agents are pricing their properties extremely low at the time of the listing, in hopes of inciting a "bidding war". This is why our buyers are faced with multiple offers within the first few days of a property being listed. This is why our buyers (and their respective agents) continue to be frustrated. Advantage: Buyers (well, sort-of).
Sales Prices- The median price ticked up slightly to $109,900 ($109,000 in July). Average sales price declined from $155,000 in July to $151,400 in August. Again, with almost 70% of sales being distressed (short sales & foreclosures), price declines are to be expected. Advantage: Buyers
Foreclosures Pending- Dropped from 25,073 in July/2011 to 24,061 in August, representing a 4% decrease. Beginning at the high-water mark in November/2009 (50,568), this number has dropped every month since then. If the current trend holds up, it is highly likely we will see this number below 20,000 by the end of 2011, a level not seen since September/2007. Advantage: Sellers
Lender-Owned Sales- Remained almost unchanged from July's 3,614, with 3,364 in August. This number has hovered between 40.8% and 46.2% since March/2011. This is a major reason for the stagnant sales prices we continue to see. Advantage: Sellers
Short Sales- The number of short sales in August rose 11.1% to 2,201, representing 25.3% of total sales. I expect this number to continue to trend upward, as more Phoenix short sale agents are getting better at understanding the short sale process. Lender-owned and short sales continue to dominate the market, representing 67% of total sales in the Phoenix market. Our team of Phoenix short sale agents are ready to help, if you are considering a short sale. Advantage: Buyers & Sellers (short sales are better for the overall health of the market when compared to REO sales!).
Avg Days On Market- Remained unchanged from July at 100 days. This number is substantially better than the 12 month high in February/2011 of 116 days. Advantage: Seller
So, what do you think? Is it a seller's market or a buyer's market? I still think we are temporarily faced with a seller's market. The sad thing is, the "sellers" in over two-thirds of the market are lenders, not homeowners putting equity in their pocket.
What keeps me awake at night is the lack of jobs in the Phoenix market. Without new employment, the real estate market simply cannot recover. As of July, Phoenix unemployment stood at 8.71%. In the past 3 years, we have lost 230,000 jobs, and from January-June 2011 we created 17,000 jobs. While an increase is always good, it shows us that we still have a very long way to go.
I also feel sorry for the buyers that are trying to find a home in this market. I've witnessed this frustration with several buyer clients that I am currently representing. It's not unusual to look at 40+ homes, only to face multiple offers when we find the perfect home for them.
Hang in there buyers! This too shall pass. You now know why we are finding it so challenging to not only find homes, but, more importantly, get them under contract. The best deals are getting multiple offers within 24-48 hours of being listed for sale. For our buyer clients, keep watching for those ARMLS search emails, and call us immediately when you see something that interests you!
Now more than ever, you need a seasoned professional to walk you through these tumultuous times, not a part-timer.
Call me today and allow us to set up a plan to help you buy/sell your next home. You'll be glad you called.
Until next month....
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Copyright © By Bob Hertzog 2011 *Phoenix Real Estate Trends-August-2011...Buyer's or Seller's Market?
Designated Broker-Summit Home Consultants