Based on stats as of 5/2/09:

The economy may be suffering, but foreclosure properties that are not overpriced and not beat to hell are flying off the market here in AZ.  It simply is not all doom and gloom here. 

It is my job to educate my buyers and sellers and help them understand how the real estate market is truly working here.  It is also my job to help my buyer's negotiate the best deal and still be a successful bidder....and find a home that meets their personal and financial needs.

I have been told that the trend is that 100% of the bank owned properties that are priced right receive at least 4 (multiple) offers within the first 7 days.  Yes, 100%!  Here in Arizona, it is not the buyer's market that you may think that it is when it comes to foreclosure/REO properties.

Sometimes it helps to remove yourself from the emotions of being a buyer and the news that you hear from the media, and look at things objectively by focusing on the facts/numbers.Are you familiar with the area's absorption rate? To compute the absorption rate, you need to know 2 figures....how many listings are currently on the market, and how many listings sold last month. 

There are currently 376 properties actively listed for sale in the zip code of 85218.  Keep in mind, even though a short sale listing may show active in the MLS, they may have offers on the property.  There are 61 homes under contract/in escrow, which makes a total of 437 unclosed properties.  40 homes have successfully closed escrow over the last 30 days. Multiply 40x12=480. Divide 480 by 52 weeks, and you get 9.23 units per week. Divide that into the number of active, and you have over 40 weeks of inventory (over 9 months).  If we include the homes under contract/in escrow as "active", then we have over 47 weeks of inventory (over 11.27 months).  Sounds like tons of inventory and a buyer's market, doesn't it?

Now, let's narrow down the numbers to foreclosure properties.  43 of the 376 actives are designated as REO's in the MLS.  18 REO properties are under contract/in escrow, which makes a total of 61 unclosed REO properties.  13 of the 60 homes that have closed escrow over the last 30 days are REO's.  Multiply 13x12=156. Divide 156 by 52 weeks, and you get 3 per week.  Divide that into the number of active, and you have only 14.33 weeks of inventory, which is not even 3.5 months of inventory!  If we include the homes under contract/in escrow as "active", then we have 20.33 weeks of inventory, less than 5 months of inventory. 

General rule of thumb is: Normal Market - Between 5+ and 6 months of inventory. Seller's Market - Less than 5 months of inventory. Buyer's Market - 7 months of inventory and higher.  As you can see, it is clearly a Seller's Market when it comes to bank owned/REO properties in zip code 85218.