Courtesy of Barb Savoy-Pacella, ABR, CHMS Director of Business Development, Keller Williams Arizona Realty ~ www.PacellaGroup.com
Being a data geek, I often look at levels of distress by City in the Cromford Report. Over the past two months, the level of distress has remained stable, or decreased slightly, in each of the major cities throughout the Valley.
As we know, the level of distress in a given area can have a direct correlation to price erosion. In other words, if a particular area has a high inventory of foreclosures and short sales, prices could be dropping. The exception would be an area where the months of supply of inventory is less than four, in which case it is a seller's market and sellers may be receiving multiple offers on their property, often for higher than the list price, in which case prices could be stable, or even increasing.
Another exception to the theory of the correlation between level of distress and price erosion would be in areas where the inventory is not necessarily saturated with distress, however, a high percentage of the homes that are selling are distressed and few traditional equity properties are selling.
The chart below illustrates that in cities like Anthem, the level of distressed inventory is balanced with the percentage of distressed sales. However, it is interesting to note that in the cities with lower levels of distressed inventory, such as Carefree, Cave Creek, Fountain Hills, Paradise Valley and Scottsdale, buyers are definitely seeking value, or a bargain, since the percentage of distressed sales is 15% or more higher than the percentage of distressed inventory. It's also interesting to note that over the past few years, those are also the areas of the Valley where the level of absorption is lowest and months of supply is highest.
|
City |
Level of Active Inventory Distress |
Percentage of Distressed Inventory Sales |
|
Anthem |
65% |
65% |
|
Carefree |
20% |
38% |
|
Cave Creek |
41% |
57% |
|
Chandler |
66% |
63% |
|
Fountain Hills |
27% |
53% |
|
Gilbert |
69% |
70% |
|
Glendale |
75% |
79% |
|
Mesa |
68% |
70% |
|
Paradise Valley |
21% |
52% |
|
Peoria |
67% |
74% |
|
Phoenix |
68% |
76% |
|
Scottsdale |
35% |
48% |
|
Surprise |
63% |
72% |
|
Tempe |
59% |
56% |
|
|
|
|
Current Conditions in the Phoenix Market:
• There are 30,588 single family detached listings currently in MLS. That is an increase of 123 listings over last week, which is interesting since we normally see a larger swell in January.
• There are 37,445 total listings currently active in MLS, which includes condos, townhomes, patio homes and lofts.
For additional information regarding a specific community, or to receive an MLS portal, contact us at www.PacellaGroup.com
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