Well, it looks like things are turning up here in the Phoenix real estate market. As evidenced by the momentum chart below we are definitely seeing a turn in the market. The line to concentrate on for April is the "Units Sold" line, which has been moving up since the beginning of '08. The X axis on this chart is in one year increments so some of the movement looks more or less dramatic than it really is.
The explanation of the chart is somewhat counterintuitive so follow me closely. The chart is comprised of three variables. The first of which is Home Sales (the black line), the second is Single Family Housing Builder Permits (the blue line) and the third is 30 Year Mortgage Rates (the red line). The black line that runs horizontally through the chart is the Zero Line or Crossover Line.
As the Home Sales (black) and Housing Permits (blue) lines approach the Zero line it signifies a surge in momentum either toward a buyer's market or a seller's market. The Zero line signifies that we have reached or "Crossed Over" into one or the other market. For instance, if you look along the X-Axis and find December '05 the chart indicates that we had reached a top in the market and were then starting to turn. That's where the chart is a bit counterintuitive. The graph lines are heading down toward the Zero Line when we would expect them to be heading up. Conversely you can see that our momentum now has been shifting back upward toward the zero line. Meaning we are very near a bottom in our market. The chart tends to lag market reality by about 6 months so we may already be at a bottom.
The gentleman who constructed this chart is a very successful real estate investor in Southern California. He has used his formulas and this chart to track the market there for over 20 years and has been highly successful in nailing the tops and bottoms in the real estate market.
For those looking to buy in the greater Phoenix/Scottsdale area, pay attention to my blog here at Active Rain as I will be updating this chart on a monthly basis.
For more information about the Phoenix, Anthem, and Scottsdale Arizona real estate markets please visit our website at:
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