Desert Ridge/Phoenix Area Market Report for June 2009 (plus first half year review)
We have now made it halfway through 2009. In some ways it has flown by, in others, not so much. Not many people are willing to say we are seeing recovery, and I won't be bold enough to step out and say it either, but we are still seeing some good signs. We still have hard times ahead of us, so let's look at both sides.
The statistics for the Phoenix area real estate market are still providing some very much needed good news. June continued the upward trend that we have had going all year, although the increases are slowing. Sales were up, inventory is down, and once again, the median price went up for the second consecutive month (after more than a year of declines).
The information below is sourced from ARMLS data and reflects status as of July 1, 2009 (@ noon). All data reflects only residential real estate, not lots, land or commercial.
Area
Closed June 2009
Closed May 2009
Closed June 2008
% change from prior month
Total Phx metro
9270
9241
5673
--%
Phoenix Metro SFD
8231
8165
5015
<1%
Wildcat Ridge + all DR
24
28
18
-14%
Total = entire ARMLS area, SFD= single family detached, DR=Desert Ridge
Despite fairly level sales month to month, we are at levels not seen in almost three years. The previous month increases were at 7%. Sales in the metro area through the first half of 2009 exceeded the first half of 2008 by 67.7%!!! In the Desert Ridge area including Wildcat Ridge that number is 5.1%. The smaller increase locally can be attributed to the larger number of investors and first time buyers looking in lower price ranges. But sales are up just about everywhere!
Median pricing, which is the statistic most quoted in the media continued an upward trend in June. The Median for June was up 4.2% over May at $125,000. While this figure is 37.5% lower than June of 2008, it is the second month in a row that the decrease year over year was lower than the month before (May year over year decrease was 42.7%. Median pricing in our area has been a roller coaster month to month. This represents a smaller sample which can vary great depending on the size of homes sold.
In addition to the strong sales levels, we are still seeing strong competition for properties, especially in the sub $100K bracket. Multiple offers are still commonplace. Inventory levels also decreased again, with all residential inventory down under 32,000 in ARMLS (as of July 1), and Single family detached down under 25,500. These levels are barely above what would normally be considered a balanced market. These are the lowest levels in over 3 years. There are still too many variables with the economy to say it's balanced yet, but the rules of supply and demand will take hold if we continue to go lower.
On the other hand, new listings increased in June. This number has fluctuated up and down all year, but the expectation is that we will see higher numbers of foreclosed properties hit the market in the next few months. Additionally, the economic news is still dismal with unemployment rising and consumer confidence lagging. How much will these factors balance the recent real estate market statistics? I think it's anybody's guess.
We have now made it halfway through 2009. In some ways it has flown by, in others, not so much. Not many people are willing to say we are seeing recovery, and I won't be bold enough to step out and say it either, but we are still seeing some good signs. We still have hard times ahead of us, so let's look at both sides.
The statistics for the Phoenix area real estate market are still providing some very much needed good news. June continued the upward trend that we have had going all year, although the increases are slowing. Sales were up, inventory is down, and once again, the median price went up for the second consecutive month.
The information below is sourced from ARMLS data and reflects status as of July 1, 2009 (@ noon). All data reflects only residential real estate, not lots, land or commercial.
Area
Closed June 2009
Closed May 2009
Closed June 2008
% change from prior month
Total Phx metro
9270
9241
5673
--
Phoenix Metro SFD
8231
8165
5015
<1%
Scottsdale total
619
509
459
22%
Scottsdale SFD
428
349
318
23%
Total = entire ARMLS area, SFD= single family detached
Sales through the first half of 2009 exceed the first half o 2008 by 67.7%!!! In Scottsdale that number is 5.1%. The smaller increase in Scottsdale can be attributed to the larger number of investors and first time buyers looking in lower price ranges. But sales are up just about everywhere!
Median pricing, which is the statistic most quoted in the media continued an upward trend in June. The Median for June was up 4.2% over May at $125,000. While this figure is 37.5% lower than June of 2008, it is the second month in a row that the decrease year over year was lower than the month before (May year over year decrease was 42.7%.
In addition to the strong sales levels, we are still seeing strong competition for properties, especially in the sub $100K bracket. Multiple offers are still commonplace.
Inventory levels also decreased again, with all residential inventory down under 32,000 in ARMLS (as of July 1), and Single family detached down under 25,500. These levels are barely above what would normally be considered a balanced market. As I stated last month, there are too many variables with the economy to say it's balanced yet, but the rules of supply and demand will take hold if we continue to go lower.
On the other hand, new listings increased in June. This number has fluctuated up and down all year, but the expectation is that we will see higher numbers of foreclosed properties hit the market in the next few months. Additionally, the economic news is still dismal with unemployment rising and consumer confidence lagging. How much will these factors balance the recent real estate market statistics? I think it's anybody's guess.
Adam Tarr PC, Associate Broker Citywide Real Estate and Investments
One of the common problems right now in the foreclosure market are willing buyers who can't pay cash for properties that need some work. Many properties won't get financed by FHA due to condition, leaving the alternatives to be conventional or cash.
There is a loan program that many people have heard of but just don't know enough about. That is the 203k Re-hab loan. There was an excellent ActiveRain post by Colleen Craig on the subject that you could call 203k for Dummies. It is a simple explanation of how it works. Great job Colleen. See it here
Adam Tarr, Assoc. Broker Citywide Real Estate and Investments Phoenix, AZ 480-236-7374 adam@WeAreAZRealEstate.com
WELCOME TO THE NEW YEAR! I wish you the best for 2009. For many, it is hard to imagine that it couldn't be better than 2008. Many people have experienced hard times this past year, and as a Realtor I have seen it first hand. I won't be so bold as to make predictions for the coming year, but I am going to tell you where we have been and what that might mean for the coming year.
I have said it before; statistics can be used to prove just about any point, no matter what side you are on. With that in mind, I am trying to keep this as simple as possible. I could tell you about the differences year over year for the last month as that would be the most up to date. But that still won't show the whole picture.
All of the following statistics represent the full year 2008 vs. the full year 2007. All statistics are drawn from the Arizona Regional Multiple Listing Service (ARMLS). The first group represents only single family detached homes.
The total number of new listings to come on the market remained flat year to year. This is a somewhat positive sign given the number of foreclosures and distressed properties. The total number can be distorted though, as it doesn't recognize the same property being re-listed more than once.
A positive sign shows that the total number of closings increased 19% from 2007 to 2008, from 43,921 to 52,522. The dollar volume of those sales decreased by 16% however, reflecting the overall decrease in pricing. The average sale price decreased 30% year over year, while the median price declined 24%.
The following statistics reflect all residential listing data in ARMLS, including lots, condos, single family etc. The total number of listings as of 1/1/09 sat at 56,658, a decrease of about 3% from the same time last year. Total sales in the month of December increased by 66.4% year over year. Total sales for the year increased 10.1% year over year. The large gains in the last half of the year were mitigated in the losses of the first half. The bright spot is that activity picked up later in the year. Inventory levels in terms of months supply decrease approximately 40% for December year over year. Median sale prices dipped 24% year over year, while median list prices dipped 26.4%. Sale price as a percentage of list price remained steady at 96%
Much of the increased sales activity of the second half of 2008 comes from investors who realized that there are some tremendous bargains available, especially for cash flow properties. The first ones back into the market are the investors. The average homebuyer should pick up on this as well. Combine aggressive pricing with historically low interest rates, and it makes a perfect time for the first time buyer to move forward. No one expects that 2009 will be much better than 2008, but unless the US falls into a true depression, the expectation is that pricing will stabilize. There most likely won't be a true recover before 2010. For the average homeowner that will stay in a property for a few years, the current climate of low prices and low interest rates makes this a good time to buy. There are those who are concerned about buying because of the possibility of further decline in pricing. There is no solid data to show with certainty that they will move either way. A home is an investment, any way you look at it. It must be weighed for its risk and return, even if it is your primary residence. But unless your employment status is in question, it may just be the best choice.
A new round of foreclosures is anticipated with numerous special loans resetting this year. The question will be whether the lenders will continue to be willing to re-negotiate these, as some have started to do. If so, we may be able to see a small decline in inventory for 2009.
Friends invited me and my family to spend the afternoon on their boat. How could I say no? That also gave me a good idea for a blog. It is interesting how many times I have heard comments from non AZ residents about, "where would you go boating in AZ?!" Well, it so happens that Arizona has quite a few lakes that are great for water sports and recreation. The lakes are the product of water planning years ago, and are formed by dams. There are a few within a short drive from Phoenix, and they are quite popular. The closest the Phoenix metro area are Lake Pleasant, in the far NW of the valley, Barlett Lake, NE from Scottsdale, and Saguaro Lake East of Fountain Hill and North of Mesa. Almost everybody in the are has access to one of these within 30 -60 minutes. There are others just a little further, but still an easy drive from the Phoenix area.
Even if you aren't into boating, wakeboarding, fishing or waterskiing, it is worth a trip. We were at Bartlett lake, and the scenery is absolutely magnificent. If you enjoy getting out and experiencing the natural beauty of our state, the area lakes are a must do!
I have included a couple of documents that show directions and basic info on some of the popular lakes around the state.
I recently went to Queen Creek to do a walk through for a client, and thought that I should provide a brief market thought on the area. Check out the video below
Last week the President signed H.R. 3221 also known as the Foreclosure Prevention Act. There has been a lot of coverage about this, and of course a lot of debate on whether this will truly have any effect on the market, as well as whether anybody should be bailed out.
What doesn't get the coverage, are the many other facets of the bill. There are many aspects, positive and negative (depending on your perspective), but one that has received some outcry is the virtual elimination of Down Payment assistance. DPA programs like Ameridream and Nehimiah have aided about 1 milion families since 1999. These are not the problem loans like no down, no qualifiers that have caused all the turmoil, but loans for folks who don't have a downpayment, but are otherwise qualified. A new bill was just introduced, that seeks to bring back DPA, with reforms. Not having DPA, will undoubtedly stall any recover in the real estate market, as FHA loans have increased, in part due to more affordable homes and 1st time buyers taking advantage of the prices.
Check out the video below for more info, as well as these links for info on each bill.
I am often asked whether now is a good time to buy, or whether it is prudent to wait a few more months. Obviously, everyones situation is different, but it goes to the basic needs of getting as much infoas possible to make an informed decision.
The media is constantly bombarding us with the negatives. So the fact that there was a positive article in the Wall Street Journal this week it important. We are starting to see more positive news mixed in. That is a good indicator that we may be stabilizing.
The article points out some history, and some key factors that may indicate that the worst is over. Remember, you only know that the bottom has been hit once it is on the way back up. Check out the article by clicking the link below.
As we begin a new year, I thought it appropriate to put this past year in real estate into perspective. The media coverage has been extraordinary, and for the most part negative. I am not going to tell you that everything is rosy, but the negative media spin tends to lead to a self fulfilling prophecy. The more negative press, the more people become scared, and the less likely that they will forge ahead with plans.
The market will continue to suffer through 2008 due to excessive inventory. This causes many sellers to sell in desperation further lowering prices. Many buyers are waiting to see how low prices will go, so it becomes a vicious cycle. There are areas around the valley that are suffering more than others. Our area although lower than last year, has remained more stable than most. One way to look at the market and the decision to purchase property is whether you want to ride the coming wave or wait for the next smaller one. I see some positive signs on the horizon, including that long term investors are getting into the market. The sustaining thought is that even if we aren't at the low point, it is close, and for the long term now is a good time to buy.
Here is some statistical data to compare 2007 with the years prior. The comparison uses average price per foot. Many indicators use the median price, which means that half the sales are higher and half lower. There is no perfect method to use, as all can be used for the analyst's advantage. I chose this method, as it is the most commonly used in the real estate industry. Keep in mind that it and most other methods aside from an appraisal will not factor in the features of each specific home, which do have an effect on the price paid.
Desert Ridge
There were 159 active listings in Desert Ridge as of 12/31, with 9 pending or contingent listings.
Yr. #sales Ave.Sold $/ft. Ave Sq.Ft. Sold price% of List Price Ave Days on Mkt
2007 183 $224.37 2702 96% 117
2006 186 $250.09 2409 96% 83
2005 212 $228.39 2305 99% 27
2004 214 $167.61 2231 99% 38
2003 202 $142.04 2266 98% 48
These figures reflect on MLS data as of 12/31, and do not include builder sales in the area.
Despite the unit sales in Wildcat Ridge dropping by 2/3 from peak, Desert Ridge has remained strong with only about a 15% drop in unit sales. Prices dropped 10% from 2006-2007. Both communities saw the sold price as a percentage of list price stay strong, which indicates more sellers realizing that value is determined by the buyer. Prices are still 59% higher than 2003 levels.
MLS Area 402
Boundaries are 16th St, Scottsdale Rd, Jomax, and the Hayden Rhodes Aqueduct. Desert Ridge is in this area.
2007 491 $200.63 2262 96% 102
2006 467 227.85 2080 97 76
2005 620 208.47 2085 99 28
2004 581 146.41 2084 99 36
2003 286 125.60 2097 98 47
As of 12/31/07 there were 44686 single family listings active on the ARMLS (which covers all of the Phoenix metro area including parts of Pinal County). A "normal" market will see less than half that number as a typical number of listings. Despite the slowdown, once the market does level, we can expect to see a reasonable rate of sales due to the pent up demand that ultimate results during any slowdown. The people who are waiting will join the people who have to move to dispense with the extra inventory.
Many people are concerned that this negative market will last. Keep this aspect in mind as well - If we did not have the crazy run up in 2004-2005, and had maintained the more normal 7-8% appreciation per year that we were seeing, then our prices would be lower than they are now. Take a step back and look at this in perspective. I realize that is hard to do for someone who bought at the peak, but the market always comes back.
There were 7 homes sold in Desert Ridge in November 2007, with an average listing price of $769,842 and an average sale price of $719,642. Sale prices were 93% of list prices. Sold Price per Square Foot was $204.79. The range of sold homes was $343,000 to 755,000. As of December 1, there are 8 pending or contingent homes under contract. As of the first week of December, there are 156 active listings with an average list price of $712,725 and average list $/sq.ft. of $233.95
November's sold home average price shot back up reflecting some larger homes in the mix. Additionally, the price per foot was down significantly but may have been skewed by a couple of homes that sold for significantly less per foot than the rest of the range, which may indicate distressed sellers (one was on the market for 14 months.As we pointed out last month, pendings were low, which resulted in this months lower sales. With only 8 pending or contingent sales at the beginning of the month, closings should again be low in December. Based on active listings and last months sale, there is a 22 month supply of homes in Desert Ridge. This might seem scary, but it reflects a low number of sales. December should follow suit, but realize that just 3 more sales per month drops the inventory to 15.6 months and doubling to 14 (which is by no means out of the question) drops inventory levels to under a year. Percentage of list price for solds remains high at 93%,although down from a 96-97% number in the previous months. Desert Ridge pricing has continued to achieve these high percentages showing a submarket that is ripe for the turnaround. It will take time for that to occur however with the high inventory levels.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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