Desert Ridge Market Report - July 2009

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.

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.