Phoenix-area real-estate agents subdued, report says.
An apparent breakdown in the basic economic law of supply and demand has shaken Phoenix-area real-estate agents' confidence in the local housing market, according to a report issued Thursday.
Despite several consecutive months of increasing buyer demand for housing, the median price of homes hasn't budged, said Bob Bemis, chief executive of the Arizona Regional Multiple Listing Service.
Similar to the Consumer Confidence index, the listing service's subscriber index gauges the confidence level of real-estate agents who have represented a buyer or seller in at least one home sale in the past 12 months.
For the first time since it began reporting the Subscriber Confidence Index in December, the listing service found a significant drop in real-estate agents' confidence in June.
The index fell about 13 points from nearly 74 in May to just above 61 in June, the listing service said.
Of the 5,900 eligible listing-service members who received the survey, 457 responded to the survey in June, Bemis said.
Before the most recent confidence survey, the index had increased consistently since December.
Bemis said he suspected the change reflected a sense of frustration among agents that, despite a number of positive trends happening that are commonly associated with price increases, the median home price actually decreased in May to a decade low.
Positive housing-market indicators in recent months include an increase in the number of transactions, a decrease in the available inventory of homes for sale and drops in both foreclosures and pending notices of foreclosure.
"And yet, it's not reflected in the value of the homes," Bemis said.
The median sale price of homes sold via the listing service in May was $108,300 - a decade low point, and a decrease of 2.4 percent since April.
Bemis said he believed the disturbing disconnect between positive demand indicators and further declines in price contributed to the erosion in real-estate agents' confidence in June.
"It's a snapshot in time of what the real-estate practitioners - the agents - are thinking," he said.
Another reason for the drop in confidence, Bemis said, could be that agents were coming to the realization that home prices are not going to change significantly from what they are today.
"The Number 1 question is, 'When are we going to get back to normal?'" he said. "I think it's very possible that this is it - we're not going to have boom days returning like we did in 2005 and 2006."
In addition to maintaining a Web-based database of homes available for purchase, along with various details about each property, the listing service collects, analyzes and reports on a variety of Phoenix-area housing market statistics.
Bemis said the decision was made in December to begin regularly conducting a survey to measure its subscribers' confidence in the area real-estate market.
The listing service initially conducted the confidence survey every two months, and then switched to monthly surveys in April.
Bemis added that confidence indices were not definitive economic indicators, and he advised against reading too much into the results.
"I've learned that it is an imprecise science," Bemis said. "I think it is a point of interest - nothing more and nothing less."
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