Total sales spiked 8.1% for June ending up at 9,129.  At the present time, there are only 10,238 homes that are currently active on the market in Maricopa County, which has approximately 1.4 million homes.  Just 30 days ago, we had over 9,000 homes that were actively listed for sale. The bottom line is that we still have a SERIOUS supply problem in today's market.  This lack of supply is hurting the overall number of sales metric, but is helping the market in many other ways, which I will go over in this months report.

ARMLS recently released the numbers for June/2012 in their monthly STAT Report, and the results are very positive.  Here is a breakdown of what happened in June in the Metro Phoenix Real Estate Market:

Sales (Month over Month)- As stated above, sales jumped in June, with a total of 9,129 closed listings.  This metric has been over 7,000 in eleven out of the past twelve months, with June being the highest.  Advantage:  Seller

Sales (Year over Year)- June/2012 sales of 9,129 represents a 17.9% decrease from June/2011.  That being said, June's number is well above (11.66%) the 12 month average of 8,176.  Advantage:  Seller

New Inventory- Remained relatively flat (9,271) for the fourth month in a row.  That being said, remember that as of today, there are only 10,238 active listings on the market, and 9,271 were listed in June/2012.  We are basically selling everything that hits the market within 30 days, which is unheard of.  More on this later.  Advantage:  Seller

Total Inventory-   Total inventory continued it's downward trend, dropping 1.5% in June to 19,857, which represents the fifth month in a row that total inventory has declined.  This metric reached it's "high-point" in October/2007, when we had an inventory of 58,178 homes.  This represents a 65.87% drop in inventory.  While this metric represents a very healthy correction in the market, it continues to create headaches for buyers looking for homes.    Advantage:  Seller

Months Supply Of Inventory (MSI)- This metric declined for the fifth month in a row, coming in at 2.18 months.  MSI's at the extremely low two month level have not been seen since September/2005, which was the height of the real estate frenzy in the Valley.  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.  It's no wonder that buyers are finding it hard to find anything to buy these days.  Advantage:  Seller

New List Prices- Both new list price metrics declined in June, with the median list price decreasing .7% to $155,900 and the average list price declining 2.7% to $227,900.  Advantage: Seller

Sales Prices- Unfortunately, this metric declined for the first time since February/2012.  The median price decreased  2.8% to $141,000 in June, and the average sales price also decreased 5.1% in June to $194,300.  Time will tell if this is just a "blip" on the radar, or if we are entering a period of price reductions.  That being said, twelve months ago our median sales price was $109,000, so we have still gained 29.36% over the past year.  The average sales price over the same period has increased 25.5%, despite the 5.1% decline in June.   Advantage: Sellers

Foreclosures Pending- Foreclosures pending fell 3.69% in June to 17,910 (18,596 in May).  Phoenix foreclosures hit a monthly high of 50,568 in November/2009, to give you an idea of how much this metric has changed in the past 2-3 years.  Unfortunately, this metric has remained relatively flat since January/2012.  Eventually, we'd like to see this number in the 5,000-6,000 range, as this represents a more "normal" market.  Advantage: Buyers

Distressed Sales-Distressed sales, which is comprised of the total number of bank-owned and short sales, are the main source of the problem in our market (depressed pricing).  Distressed sales as a percentage of actual sales reached a market high of 74.1% in September/2010.  In June/2012, distressed properties (4,273) represented  46.8% of total sales (an increase of 3.4% over May). For the seventh month in a row, short sales outpaced foreclosure/bank-owned sales.  In June, there were 1,283 lender-owned sales (representing just 14.1% of total sales), and 2,990 short sales (representing 32.8% of total sales).  This is fantastic news!  More and more homeowners are understanding the short sale process, and the many benefits that come with a short sale versus a foreclosure.  There is no doubt that if this trend continues, we will continue to see a steady increase in both the average and median sales prices in the months ahead.  Advantage: Sellers

Lender-Owned Sales- Decreased in June to 1,283 from 1,423 in May, and it's percent of total sales dropped to just 14.1% of total sales. This is great news, and it's a trend that we hope continues!  Advantage:  Sellers

Short Sales- The number of short sales in June increased by  25% to 2,990, representing 32.8% of total sales. As stated above, I expect this number to continue to trend upward, as more Phoenix short sale agents are getting better at understanding the short sale process.  Our team of Phoenix short sale agents are ready to help, if you or someone you know is 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 sharply in June to 75 days (May was 85 days).  As traditional sales increase, we expect the days on market to continue to decrease in 2012.  Advantage:  Neither Seller or Buyer

The graph below depicts the average $$/SF in Maricopa County since January/2010.  Prices are on the rise, and now is the time to buy!


So, what do you think?  Is it a seller's market or a buyer's market?  I still think we are faced with a seller's market.  Overall inventory increased slightly in June (only 9,271 new listings hit the market), and the telling statistic is that there are only 10,238 homes on the market today in Maricopa County, listed as active.  This, in a market with approximately 1.4 million homes.  This statistic alone explains why it is so difficult for buyers to find homes in today's market.

There are several positive  to take from this report.  Sales jumped 8.1% when compared to May (we sold 9,129 homes in June), and total inventory dropped yet again (for the 11th time in 12 months).  Months of Supply dropped to a lever that we haven't seen since September/2005, coming in at 2.18 months.  Both the average and median sales price metrics dropped slightly (bucking a seven month tread of increases), but the average sales price is still 25.5% higher than it was in June/2011.  Foreclosures are down, and the ratio of short sales to bank-owned in the distressed property mix increased for the seventh month in a row, proving that lenders are now working with homeowners on short sales, which is a HUGE PLUS!

If you are a buyer, whatever you do, DON'T GIVE UP!  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.  Just remember, THERE IS HOPE!  Year-to-date, we have helped 47 families find their dream homes, and we currently have approximately 22 homes under contract for our buyer clients.

As you can see from this report, the Phoenix Real Estate Market is improving.  While finding a home has proven to be extremely challenging (due to our low inventory), please understand that it is necessary for a meaningful recovery.  Investors with cash are proving to have the "upper-hand" when negotiating against those with financing, but this too shall pass.  As prices increase, investors will slowly but surely begin to back out of the market, leaving more choices for those buyers that are owner-occupants.  Now more than ever, it's critical for buyers and sellers to work with a seasoned real estate professional.

Cromford came out with an outstanding report that shows how the current lack of inventory is making it so difficult to find a home.  I highly recommend you click on the link below to read it.

Cromford Report June Newsletter-Homes Under $300k

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....