Phoenix Area Real Estate Market Update – December 2011

As December marches toward the close of the year, we are left with the familiar pattern of two steps forward one step back characteristic for the Phoenix area real estate market  of 2011.

This month’s market report has some positive news in the gain of shorts sales over foreclosures in the distressed property make up, the decline of distressed properties as a percentage of actual sales, reduction in the average days on market, a drop in total inventory and foreclosures pending and a continued reduction of new inventory added to the market.

The Valley does not operate in a vacuum and gains in the market are dependent on factors beyond our control. The US Bureau of Labor Statistics reported a fall in the national unemployment rate from 9.0 to 8.6 in November.  Figures for Phoenix Metro released December 6th by the US Bureau of Labor Statistics1 show an 8.1% unemployement rate in the Valley, clearly a metric moving in the right direction albeit slowly. It is the interdependency of markets across the country that poses the biggest challenge. What is needed are more jobs and the unfreezing of home equity not only locally, but also in our feeder markets which will free new homeowners to sell their homes and move into the area.

Now for the details…

November sales in the Phoenix Metro area of 7,146 followed the downward trajectory begun from the high of 11,125 in June. November sales represent a 1.7% drop below October.

November sales in the Phoenix Metro area were 5.3% higher than the same figure in 2010. Sales from October to November dropped in nine of the previous ten years with 2011 as no exception to the typical fourth quarter pattern.

monthly phoenix real estate activity

New listings added to the Phoenix Metro real estate market have been following a downward trend line since April.  November’s new listing figure of 8,428 is the lowest since December of 2004 (7,117).  At its peak in March 2006, new listings hit the 16,686 mark.  November’s figure falls 50.5% below that high.  Declines in new listings added to the market in the Valley’s current climate is seen as a positive!

New_inventory_in_phoenix_area_real_estate

Total listings declined a mere 1.7% in November to 26,798. The overall trend line for total inventory in 2011 has been downward characterized by a steep decline from January’s
high of 42,881 to July’s 27,655, followed by a more gentle fall between August and November.  Most striking is the 41% decline of November’s new inventory total from the same figure in 2010.

Total_Real_Estate_Inventory_Phoenix_Metro_Area

Total market wide month supply of inventory increased again in November to 3.75. While this is still under 4 months, often seen as the benchmark for a seller’s market, it continues the upward trend started from a low of 2.62 months in July. Market wide MSI is seen as a barometer of market health and should not be used in predicting MSI in smaller market niches.

Phoenix_metro_real_estate_inventory

Average new list prices, which fueled optimism in September and October with an upward tilt, turned downward by 3.3% in November to $222,400. The median list price declined only .8% to $137,900 in November. The decline, while slight, is disappointing to those hopeful of a restoration of the Valley’s pricing.

Phoenix_metro_real_estate_list_price_trends

Sales prices offered more encouragement than list pricing in November. The average sales price rose 4.7% to $161,600, while the median sales price rose 2.7% to $115,000. Even with these positive upward tilts, the sales pricing trend lines for the entire year remain flat and lackluster.

Phoenix_real_estate_list_vs_sales_price_data

So, what price range of homes are selling in the Phoenix area?  Over the past four months there have been declines in the number of newly pending properties in the below $50,000 and $50,001-100,000 ranges, while the $100,001-$150,000 range appears to have leveled out. Other ranges showing increases in the number of newly pended properties are $150,001-200,000 and $350,001-400,000. This is a positive sign for on this type of incremental change… a recovery is built.

What_price_range_of_homes_are_selling_in_the_phoenix_metro_area

The price per sq ft in the homes under $50,000 and $50,001 -$100,000 ranges appear to have stabilized showing very little movement over the past four months. In the
prices ranges above $100,000, six of the ranges showed gains in price per sq ft and eight showed losses, with no clear pattern emerging yet.

Price_per_square_foot_in_phoenix_area_homes

Foreclosures pending in Maricopa County continued on this year’s downward trajectory started from the high of 40,641 in January to 22,389 in November. The accelerated rate of reduction experienced from January through July eased from August to November. The Valley’s foreclosures pendings hit its all time high of 50,568 in November 2009, which puts this month’s figure of 44.2% of the high in a positive light. Declines in foreclosures pending foreshadow declines in actual foreclosures and ultimate market recovery. We are moving in the right direction!

maricopa_county_pending_foreclosure_trend

Distressed properties, a composite of short sales and lender owned sales, lie at the heart of the Valley’s depressed pricing. Distressed properties as a percentage of actual sales reached a market high of 74.1% in September 2010. In November distressed properties (4,246 ) represented 59.4% of total sales, the first time since the Arizona Regional Multiple Listing Service (ARMLS)  has been tracking that its percentage of total sales has fallen below 60%.  Trend lines for short sales and foreclosures has been tracking parallel but in November trend lines for lender owned sales (2,128) and short sales (2,118) intersected. Short sales, which had been consistently eclipsed by lender owned sales, appear to be gaining momentum. The decline in actual foreclosures coupled with a rise in short sales indicates that more homeowners are able to dodge foreclosure in favor of short selling. This is positive news for homeowners having difficulty making payments who are caught in homes where the property value is lower than the mortgage amount.

phoenix_area_distressed_sales_trend

Information compiled from the Arizona Regional MLS STAT Monthly Newsletter December 2011

About The Amy Jones Group

Mindy Jones Nevarez is the owner of Amy Jones Group Keller Williams Integrity First. The Amy Jones Real Estate Group has been recognized as the #1 Real Estate Team in Chandler by the Phoenix Business Journal and voted Best of Our Valley for 4 years.

The Amy Jones Group specializes in real estate in Chandler, Sun Lakes, Gilbert, Mesa, Tempe, Ahwatukee, and Phoenix.