I decided to start posting more local reports on the real estate market here in Metro Phoenix and Scottsdale. I thought it would make sense to share others opinions based on fact. It is also a lot easier to provide you with more information in the manner. I will be reporting numbers for August late next week as the month ends and the numbers become available. Below is a report from Karl Stauffer. Karl is the broker for NEXT GENERATION REAL ESTATE. You can see Karl’s work directly at this Link HERE.
As you can see, Karl is seeing the same trends in the market I have been reporting. Those trends are increasing Inventory and decreasing sales. But one must look further than the numbers. When you do you see the Inventory is low in relative terms. Meaning what would be expected for this size of a population and for the number of homes being sold. This should have been a seller’s market all year, except the market is driven by Short Sales and distressed properties. Although, I believe a Short Sale is usually in the best interest of a home owner in hardship, as a whole they drive the market lower. Especially with all a combination of inexperienced agents conducting Short Sales and the Short Sale scams from these investors offering cash with a desire to flip.
With all this in mind, the reality of our market is the worst is over! We may go lower. Rates are pathetically low, 4.39%!!!! Home values are over sold, but may take a while to recover. Looking back in 5 years, everyone that has the capacity to enter this market as a home owner or investor will be boasting their glorious investment! Do you want to be one of those with the RETURNS/GAINS, not that you have to brag about it? Or do you want to be one of those that says, I could have, I should have, I would have… But I didn’t?
Let me know HOW I CAN HELP YOU?
Just my opinion…JeffrCameron
Karl Stauffer’s Real Estate Market Update
Phoenix Real Estate Market Analysis
©2010 Karl Stauffer
As of the end of July, 2010.Closed transactions continue to drop off from the previous month.There were a total of 7108 closings in the month of july. There are currently 29212 SFD homes on the market, a 4% increase over last month, giving us a 4 month supply at the current sales pace.I know that there are indications that we are heading for another dip but there are also some indicators that contradict that. We are still at a 4 month supply which is a traditional indicator of a strong sellers market and would lead to price increases, not drops.
Also, the 29,000 homes on the market are low for the size of our area. A traditional rule of thumb is that about 3.5% of homes would be for sale at any given time. We have roughly 1.2M SFD homes in our area, which should mean a normal market would be about 42,000 homes for sale at any time. This is another indicator of a sellers market which should mean price increases.
It doesn’t make sense and I am not sure what it all means. There are a lot of rules of thumb that have been thrown out the window the last couple of years so we will see what happens with these as we work or way through this cycle.
Market supply continues to increase in all of the except in the luxury markets of Scottsdale $1M+ and Paradise Valley where it continues to drop. These areas are still showing fairly strong sales, PV especially with an 8 3/4 month supply.
The comparison of current active listing change is based on the previous reports’ inventory. Supply numbers are based on the number of closings in the previous month, divided in to the total number of active listings. This data is for Single Family Detached homes only and does not include patio homes, condos, or town homes.
Overall Market. Inventories are up 4% from the last report. Total of 29212 active listings with 7108 closings in the last month. About a 4 month supply. Phoenix. Inventories are up 6% from the last report. Total of 6762 active listings with 1632 closings in the last month. About a 4 1/4 month supply.
SE Valley. Inventories are up 8% from the last report. Total of 6806 active listings with 1844 closings in the last month. About a 3 1/2 month supply.
Scottsdale over $1M. Inventories are down 5% from the last report. Total of 685 active listings with 43 closings in the last month. About a 16 month supply.
Scottsdale under $1M. Inventories are up 3% from the last report. Total of 1906 active listings with 424 closes in the last month. About a 4 1/4 month supply.
Paradise Valley. Inventories are down 8% from the last report. Total of 341 active listings with 39 closes in the last month. About a 8 3/4 month supply.
West Valley. Inventories are up 11% from the last report. Total of 7074 active listings with 2060 closings in the last month. About a 3 1/2 month supply.
NE Valley.
Inventories are unchanged from the last report. Total of 3652 active listings with 573 closings in the last month. About a 6 1/4 month supply.SE Valley. Inventories are up 8% from the last report. Total of 6806 active listings with 1844 closings in the last month. About a 3 1/2 month supply.
Scottsdale over $1M. Inventories are down 5% from the last report. Total of 685 active listings with 43 closings in the last month. About a 16 month supply.
Scottsdale under $1M. Inventories are up 3% from the last report. Total of 1906 active listings with 424 closes in the last month. About a 4 1/4 month supply.
Paradise Valley. Inventories are down 8% from the last report. Total of 341 active listings with 39 closes in the last month. About a 8 3/4 month supply.
I hope you find this information useful.
Sincerly,
Karl Stauffer, Associate Broker
Capital Asset Management
602-316-2355
480-652-2004