I hope you enjoy my report on home sales for Metro Phoenix, Scottsdale and McDowell Mountain Ranch for February, 2014. Please click the video below to watch the report.
Wow! Its March… Time is hitting the accelerator button!
I hope you have entered this new year on a positive note!
So, what is happening in the Real Estate Market for Metro Phoenix, Scottsdale and my home in McDowell Mountain Ranch?
Let’s take a quick look at the numbers:
PHX Scottsdale MMR Tatum & Bell
Available +61% +50% +42% +143%
Pending -36% -28% -42% +7%
Closed -19% -20% -47% -33%
Sold -16%
Listed +5%
PPSF +16% +11% +8% +25%
What are the numbers telling us. Inventory has soared and sales are dropping. You can see my blog post
How is the Real Estate Market in Metro Phoenix and Scottsdale – February 2014
In that report I review a presentation by Michael Orr.
Greater Phoenix Housing Market, by Michael Orr, Director, Center for Real Estate Theory and Practice
Moving along. I decided to put to test my long stated theory about days on market and pricing. I did a little analysis on how long it takes a home to sell. I have been told by Broker/Owners “the National Association of Realtors states through their research that a home in the market over 21 days or more than 9 showings is over priced.” I tried googling that fact to no avail.
What we have found is that buyers are not willing to write an offer on a house listed for sale if they feel it is over priced. How over priced? I believe that to be 3% over priced from what I have seen over the years with my experience in nearly 1,300 home sales.
That’s interesting, if you want to take my word for it. So to back it up with numbers I did a random sample. Now I have done this 4 or 5 times over the years. I wish I had saved the data, but I didn’t. What I found was ~85% of homes sold within 30 days of their list date or their last price adjustment date.
I used McDowell Mountain Ranch as my sample and looked at sales Pending and closed YTD looking at the Days on Market, DOM, from accepted offer to either list date or last price adjustment date.
Here is what I found:
1. The average DOM for Active listings is 79 Days
2. Homes that sold without adjusting their price averaged 37 DOM
3. Homes that adjusted their price sold within 22 Days from adjustment.
4. The average DOM for all sold and pending homes is 80.
5. 66% of home sold within 30 days of listing or their last price change.
6. 80% of homes sold within 45 days of listing or last price adjustment.
In this sample, my ~85% of homes selling within 30 days of listing date or last price adjustment was a little strong. But 80% within 45 days still backs up the theory that buyers wait for a home to be priced to the market before writing an offer.
Here is an interesting number. The homes that sold without adjusting their price averaged 97% of list price, whereas the ones that adjusted their price averaged 98% of list price. I believe this is more relative to the days on market. Those not adjusting were 37 DOM and price adjusters were 22 DOM. The closer to the list date or price adjustment, the stronger the offer or final price.
Let’s look a little closer at each of these and see what they tell us. First, with the average DOM of the existing listings at 79 days, will the DOM be increasing? Maybe. But most likely a bunch of those homes listed for sale today will end up not selling. Although, an increasing DOM number is reasonable to expect.
When I say no sell, I mean a lot of those homes Available are just not going to sell. There owner will give up as they want a price greater than Today’s market value.
Now lets look at the homes that sold without adjusting their price. They averaged 37 DOM. 11 of the 20 in the sample sold in less than 30 days. 1 took 5 months, 1 took 3 months, 5 took right around 2 months and 2 took between 1-1.5 months. 90% of the homes sold in about 2 months or less.
OK, so those were the ones that priced appropriately to begin with. What about those that adjusted their price. They averaged 22 DOM from the time of their last price adjustment. 5 of the 21 homes took between 45 and 57 days to sell, 16 took 31 days or less. Of those, 12 took 17 days or less to sell from the price adjustment.
This demonstrates that an over priced homes needs to be adjusted to attracts buyers. Once it is priced correctly, buyer come quickly.
Below is the data for the Days on Market study.
| 409000 | 399000 | 17 | 134 | Pending | 17 | 1 | 409000 | 399000 | |||||||
| 419900 | 417900 | 30 | 143 | Pending | 30 | 1 | 419900 | 417900 | |||||||
| 440000 | 430000 | 4 | 50 | Pending | 4 | 1 | 440000 | 430000 | |||||||
| 435000 | 6 | Pending | 6 | 1 | 435000 | ||||||||||
| 450000 | 439000 | 5 | 172 | Pending | 5 | 1 | 450000 | 439000 | |||||||
| 449900 | 444900 | 10 | 45 | Pending | 10 | 1 | 449900 | 444900 | |||||||
| 499000 | 485000 | 30 | 100 | Pending | 30 | 1 | 499000 | 485000 | |||||||
| 600000 | 25 | Pending | 25 | 1 | 600000 | ||||||||||
| 725000 | 700000 | 14 | 45 | Pending | 14 | 1 | 725000 | 700000 | |||||||
| 825000 | 43 | Pending | 43 | 1 | 825000 | ||||||||||
| 375000 | 11 | Pending | 11 | 1 | 375000 | ||||||||||
| 415000 | 10 | Pending | 10 | 1 | 415000 | ||||||||||
| 485000 | 475000 | 3 | 10 | Pending | 3 | 1 | 485000 | 475000 | |||||||
| 482900 | 5 | Pending | 5 | 1 | 482900 | ||||||||||
| 600000 | 4 | Pending | 4 | 1 | 600000 | ||||||||||
| 675000 | 663000 | 6 | 20 | Pending | 6 | 1 | 675000 | 663000 | |||||||
| 769900 | 724900 | 48 | 323 | Pending | 48 | 1 | 769900 | 724900 | |||||||
| 915000 | 886900 | 45 | 99 | Pending | 45 | 1 | 915000 | 886900 | |||||||
| 925000 | 887000 | 31 | 121 | Pending | 31 | 1 | 925000 | 887000 | |||||||
| 1195999 | 37 | Pending | 37 | 1 | 1195999 | ||||||||||
| 1196000 | 7 | Pending | 7 | 1 | 1196000 | ||||||||||
| 399900 | 369400 | 360000 | 6 | 194 | 6 | 1 | 399900 | 369400 | 360000 | 97% | |||||
| 420000 | 399900 | 396000 | 6 | 46 | 6 | 1 | 420000 | 399900 | 396000 | 99% | |||||
| 460000 | 439995 | 425000 | 23 | 143 | 23 | 1 | 460000 | 439995 | 425000 | 97% | |||||
| 450000 | 430000 | 68 | 68 | 1 | 450000 | 430000 | 96% | ||||||||
| 489900 | 465000 | 60 | 60 | 1 | 489900 | 465000 | 95% | ||||||||
| 559000 | 539900 | 525000 | 7 | 125 | 7 | 1 | 559000 | 539900 | 525000 | 97% | |||||
| 555000 | 545000 | 4 | 4 | 1 | 555000 | 545000 | 98% | ||||||||
| 650000 | 599000 | 570000 | 56 | 195 | 56 | 1 | 650000 | 599000 | 570000 | 95% | |||||
| 729900 | 624900 | 600000 | 10 | 153 | 10 | 1 | 729900 | 624900 | 600000 | 96% | |||||
| 649000 | 625000 | 20 | 20 | 1 | 649000 | 625000 | 96% | ||||||||
| 649000 | 625000 | 50 | 50 | 1 | 649000 | 625000 | 96% | ||||||||
| 694900 | 680000 | 158 | 158 | 694900 | 680000 | 98% | |||||||||
| 719000 | 695000 | 58 | 58 | 1 | 719000 | 695000 | 97% | ||||||||
| 725000 | 675000 | 703000 | 16 | 26 | Short sale | 16 | 1 | 725000 | 675000 | 703000 | 104% | ||||
| 799000 | 750000 | 725000 | 41 | 162 | 41 | 1 | 799000 | 750000 | 725000 | 97% | |||||
| 795000 | 760000 | 95 | Pend in 5 DOM | 95 | 795000 | 760000 | 96% | ||||||||
| 850000 | 815000 | 780000 | 57 | 247 | 57 | 1 | 850000 | 815000 | 780000 | 96% | |||||
| 799000 | 790000 | 4 | 4 | 1 | 799000 | 790000 | 99% | ||||||||
| 1200000 | 1185000 | 7 | 7 | 1 | 1200000 | 1185000 | 99% | ||||||||
| 1500000 | 1450000 | 65 | 65 | 1 | 1500000 | 1450000 | 97% | ||||||||
| 465 | 3290 | 737 | 27 | 10 | 2 | 878.01% | 1065.68% | ||||||||
| 22 | 80 | 37 | 79 | 98% | 97% | ||||||||||
| DOM | Total DOM | DOM for | DOM for | ||||||||||||
| since price | no price change | Active Listings | |||||||||||||
| change | |||||||||||||||
| 30 day | 60 DOM | 90 DOM | 90+ DOM | ||||||||||||
| 1. The average DOM for Active listings is 79 Days | Actual | 14 | 9 | 2 | 16 | ||||||||||
| 2. Homes that sold without adjusting their price averaged 37 DOM | Since price | 27 | 10 | 2 | 2 | ||||||||||
| 3. Homes that adjusted their price sold within 22 Days from adjustment. | |||||||||||||||
| 4. The average DOM for all sold and pending homes is 80. | Actual | 34% | 22% | 5% | 39% | ||||||||||
| 5. 66% of homes sold within 30 days of list or price change. | Since price | 66% | 24% | 5% | 5% | ||||||||||
| 6. 80% of homes sold with 45 days of list or price change. | |||||||||||||||
| DOM<45 | 80% | ||||||||||||||
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