After setting all sorts of records in June, the Phoenix real estate market came in with mixed results for July. Remember, July saw 11,125 homes change hands, which is the highest total for one month in over 10 years.
ARMLS recently released the numbers for July/2011 in their monthly STAT Report, and they are very eye-opening. Here is a breakdown of what happened in July/2011 in the Metro Phoenix Real Estate Market:
Sales (Month over Month)- Sales were down 24.6% (compared to June/2011), to a total of 8,387 closed listings. Advantage: Buyer
Sales (Year over Year)- July/2011 sales (8,387) were up 18.1% over July/2010. While this is a bit of a let-down compared to June/2011 sales (11,125), it follows a fairly typical June to July pattern, where sales have fallen eight of the last ten years during these months. Advantage: Seller
New Inventory- Dropped again in July to 9,140, which beats December/2010's twelve month low of 9,443. Inventories have now declined every month since August/2010. Advantage: Seller
Total Inventory- We now have 6 months in a row of falling inventory, with July/2011 coming in at 27,663. This represents a 5.3% decline since June/2011, and a 35.5% decline since July/2010. Advantage: Seller
Months Supply Of Inventory (MSI)- Increased from 2.62 months in June/2011 to 3.30 months in July. Althought this represents a small up-tick, inventory has been declining each month since November/2010. 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 rose by 4% to $124,900, while the average new list price fell .9% to $188,700 from last month's $190,400. This is the tricky one that is leaving everyone scratching their head. The reason is simple. Distressed sales (short sales and bank-owned homes) represented 67.13% of the total sales in July. REO and short sale agents are pricing their properties extremely low at the time of the listing, in hopes of inciting a "bidding war". This is why our buyers are faced with multiple offers within the first few days of a property being listed. This is why our buyers (and their respective agents) are pulling their hair out.Advantage: Buyers (well, sort-of).
Sales Prices- Both the median and average sales prices dropped slightly to $109,000 and $155,000 respectively. This represents a 1.4% and 3.1% drop when compared to July/2010, respectively. Advantage: Buyers
Foreclosures Pending- Dropped from 27,616 in June/2011 to 25,073 in July. Beginning at the high-water mark in November/2009 (50,568), this number has dropped every month since then. If the current trend holds up, is is highly likely we will see this number below 10,000 by the end of 2011, a level not seen since September/2007. Advantage: Sellers
Lender-Owned Sales- There were 3.614 sales in July, and they accounted for 43.1% of the total sales. This number has hovered between 40.8% and 46.2% since March/2011. This is a major reason for the stagnant sales prices we continue to see. Advantage: Sellers
Short Sales- Dropped from 27% of total sales in June to 23.6% in July. Lender-owned and short sales continue to dominate the market, representing 66.7% 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- Dropped from 106 days in June to 100 days in July. 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. The sad thing is, the "sellers" in over two-thirds of the market are lenders, not homeowners putting equity in their pocket. I'm also deeply concerned with the job outlook in Phoenix. "The Phoenix market lost 220,000 jobs since July/2007 and gained only 5,000 in May/2011. At this pace, recovery is 4-5 years away, if the population remains at 2011 levels", according to Dr. Ted Jones, Chief Economist for Stewart Guaranty Company.
I'm also deeply concerned for the future of the $300k+ market in Phoenix. This market remains anemic with Monthly Supply of Inventory (MSI) ranging from 3.5 months up to 26.78 months ($3 million+ homes). To put it in perspective, we sold 3,821 homes in the $100,000-$250,000 price range in July/2011. We sold just 80 homes priced at $750k+ during the same month. Obviously, this market has a long, long way to go.
Hang in there buyers! This too shall pass. You now know why we are finding it so challenging to not only find homes, but, more importantly, get them under contract. The best deals are getting multiple offers within 24-48 hours of being listed for sale. For our buyer clients, keep watching for those ARMLS search emails, and call us immediately when you see something that interests you!
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....