Is the King abandoning the Kingdom?

Courtesy of Barb Savoy-Pacella, ABR, CHMS

We are all familiar with the phrase “cash is king,” and in this case, the king may be abandoning the kingdom.

It is not a secret that over the past five years, many of the homes purchased in the Phoenix market were bought by investors purchasing with cash.  Prior to January of 2008, on average 12% of home purchases were purchased with cash.  By February of 2011 (which was also when the median price hit its lowest level) 41.9% of purchases were cash.  Keep in mind, in February of 2011, MANY properties in the metro area were priced at levels lower than what you probably paid for your current vehicle.

Over the past two years, the Phoenix market has experienced significant appreciation, fueled by record low levels of inventory, and competition for desired homes.  The appreciation has also significantly reduced the levels of distressed property (short sales and foreclosures), which has also reduced the opportunity for bargain hunting investors.  As a result, July 2013 recorded that only 24.4% of the sales volume was cash.  Ironically, that figure is also right in line with the percentage of distressed sales for the month….

Current Conditions in the Phoenix Market:

<!--[if !supportLists]-->·         <!--[endif]-->There are 13,347 single family detached homes actively on the market, which is an increase of 300 listings from two weeks ago.

<!--[if !supportLists]-->·         <!--[endif]-->There are 16,845 total listing actively on the market, which includes condos, patio homes, and townhomes and is an increase of 322 listings when compared to two weeks ago.

<!--[if !supportLists]-->·         <!--[endif]-->There are 8,023 listings pending sale, which is a decrease of 787 pending sales from two weeks ago. This is seasonally normal considering that school has started in nearly every district in the metro area over the last two weeks, many were trying to get moved prior to the first day of school.

<!--[if !supportLists]-->·         <!--[endif]-->There are 3,463 additional homes that have offers pending, but are short sales awaiting lender approval.

<!--[if !supportLists]-->·         <!--[endif]-->3,861 homes have closed escrow in the past two weeks, which is a slight increase of 93 closings from two weeks ago, and is again exactly on pace with the same two week period last year.

TO VIEW HOMES FOR SALE, AND FOR ADDITIONAL INFORMATION, VISIT WWW.PACELLAGROUP.COM