When looking at total sales, October ended up being somewhat of a dissapointment, with sales taking a 4.2% dip, ending up at 7,563.  This is almost 12% below the previous 11 month average of 8,552 sales/month.  That being said, there were several areas that improved in the past 30 days, as you will see from this report.

ARMLS recently released the numbers for October/2011 in their monthly STAT Report, and they are very interesting.  Here is a breakdown of what happened in October/2011 in the Metro Phoenix Real Estate Market:

Sales (Month over Month)- Sales were down 4.2% (compared to September/2011), with a total of 7,563 closed listings.   Sales have fallen seven of the last ten years from September to October, so this comes as no huge surprise.  Advantage:  Buyer

Sales (Year over Year)- October/2011 sales (7,563) were up 14.7% over the October/2010 figure of 6,593.  Advantage:  Seller

New Inventory- Rose 1.6% in October/2011 to 9,654.  This is the first up-tick we've seen in this trend since February/2011.  Advantage:  Buyer

Total Inventory- For the first time in 9 months, we have a rise in total inventory.  This number rose 1.2% in October, to 27,266.  This represents a minimal deviation from the downward trend line of the previous 12 months, and is still 53% below the record decade high of 58,178 in total inventory in October 2007. The period from January 2002 through May 2004 is not being considered by many to have been the Valley's last "normal" market.  During this period in time, the average total inventory was 26,727.  This inventory level is right in line with today's inventory, which leads many to believe that a very important metric for the Phoenix Real Estate market has now righted itself.   Advantage:  Buyer

Months Supply Of Inventory (MSI)- Increased slightly from 3.41 months in September/2011 to 3.61 months in October/2011. Generally, an MSI below 4 indicates a seller's market, between 4 and 6 represents a balanced market, and above 6 represents a buyer's market.  Advantage:  Seller

New List Prices- The median new list price increased 6.1%, going from $131,000 in September/2011 to $139,000 in October/2011, while the average new list price rose 9.1% from $211,800 in September, to $229,900 in October.  Agents are sensing a rise in the market, and are listing their properties accordingly.  It is encouraging to see listing agents trying to get more for their clients.

Sales Prices- The median price dropped 2.5% to $112,000 in October, compared to September.   Average sales price fell 1.1% to to $153,400. It appears that the Valley's pricing recovering is stalling, unfortunately.  Advantage:  Buyers

Foreclosures Pending- Dropped from 23,555 in September to 23,211 in October.  Beginning at the high-water mark in November/2009 (50,568), this number has dropped every month since then. Foreclosures pending has now dropped 20 out of the past 22 months. My earlier prediction that the foreclosures pending would drop below the 10,000 mark before year's end now appears to be unlikely.  While foreclosures continue to drop each month, the drastic drop we experienced from February to July has slowed tremendously, and it now appears that we will be lucky to drop below 10,000 by the end of 2012.  Advantage: Buyers

Distressed Sales-Distressed sales, which comprise of the total number of bank-owned and short sales, continue to dominate the Valley's real estate market.  Of the 7,563 total sales in October, 4900 (64.8%) were distressed sales.  This is slightly below the previous eleven month average of 66.7%.

Lender-Owned Sales- Declined 11.65% in October to 2,693 from 2,931 in September, and it's percent of total sales declined to 35.6%.  This number has hovered between 40.8% and 46.2% since March/2011.  This is great news, and it's a trend that we hope continues.  Advantage:  Sellers

Short Sales- The number of short sales in October jumped 5.2% to 2,207, representing 29.2% of total sales. As stated in previous reports, I expect this number to continue to trend upward, as more Phoenix short sale agents are getting better at understanding the short sale process.  Lender-owned and short sales continue to dominate the market, representing almost 67% of total sales in the Phoenix market.  Our team of Phoenix short sale agents are ready to help, if you are considering a short sale.  Advantage:  Buyers & Sellers (short sales are better for the overall health of the market when compared to REO sales!).

Avg Days On Market- Declined in October to 94 days, a level not seen since May/2010.  This number is substantially better than the 12 month high in February/2011 of 116 days.  Advantage:  Seller

So, what do you think?  Is it a seller's market or a buyer's market?  I still think we are temporarily faced with a seller's market, but the pendulum is beginning to swing back in the favor of the buyers.  Inventory is showing signs of increasing, but not at a pace that is making much of a difference.  Buyers are still hard-pressed to find homes, as inventories are still historically very low.

The good news is that we are seeing positive news in several areas: sales activity still remains high; foreclosures pending continues its downward trend; MSI (months of inventory) remains under 4, and the average Days On Market dropped again in October.  In September, we saw our first increase in both average and median sales price, and we all held our breath hoping for yet another positive month in October.  Unfortunately, prices dropped again.

Jobs are the key to any recovery, and I'm still talking to homeowners & Phoenix short sale clients who have either recently lost their job, or have had hours cut back at work.  Recently released statistics show that the unemployment rate in Maricopa County dropped in September to 7.9%, from the high of 9.1% in January.  In September, the U.S. Bureau of Labor Statistics released a report that cited  Phoenix as being #6 for new job growth in the U.S.  Non-farm payroll increased 2.3% from September 2010 to September 2011 in the Metro Phoenix area, and the 2012 projection for average non-farm employment is expected to be 1.4%, according to the AZ Department of Administration.  While I'm not holding my breath (we've seen these types of "predictions" in the past), I am still holding out hope that our jobs will recover in AZ.

If you are a buyer...Lucky You!  I say that tongue-in-cheek.  While there are some incredible deals in this market, you have probably realized (or will soon realize) that trying to purchase a home in this market is a daunting task, especially without the assistance of an experienced Phoenix buyer's agent.  We are working hard to find homes for our buyer clients, but with inventory being so low, its been difficult, at best.  For our clients reading this, keep checking your email inbox, and call us immediately when you see something you like.  When it comes to finding a home, TIME IS OF THE ESSENCE.  If it's a good deal, expect multiple offers in the first 24-48 hours, and be ready to "go in strong".

Now more than ever, you need a seasoned professional to walk you through these tumultuous times, not a part-timer.

Call me today and allow us to set up a plan to help you buy/sell your next home.  You'll be glad you called.

Until next month....

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