Real Estate Market Report for Metro Phoenix and Scottsdale – 2011 December Numbers
Happy New Year!
It was a crazy start to the new year. After taking some quality time with family and friends, I found myself in the office on Tuesday the 2nd back to work. Usually the first week of the year is quite, actually I call the beginning of the year “The Gathering.” Our season starts just after Valentine’s Day. I speak to many people between now and then about buying and selling homes, but very little activity until after Valentine’s Day!
Not this year. That first day back, 6 different home buyers contacted me. By Saturday, I had sold 3 homes and was at my 2nd home inspection for the week. Wow, what a start. Buyers actually looking, are seeing homes disappear and prices increasing. They understand, the time to act is now.
That was my first week. How was your first week of 2012?
We just closed a home here in McDowell Mountain Ranch $8500-12,000 higher than the last 2 recent comps of this floor plan. The market is moving higher.
I was looking for a buyer and noticed a Desert Ridge condo I sold as a 2nd home to friends from Seattle for under $130,000 and now you can’t buy for under $157,000. Either there has been a bounce of 21% over the last 9 months or we bought way below market value!
Did you know, a state Senator from Surprise is trying to repeal the Anti-Deficiency laws here in AZ. I believe this would force more people to Bankruptcy. In lieu of this, Banks should state publicly that they will no longer to a Short Sale for people with assets.
Did you know, the Mortgage Forgiveness Debt Relief Act of 2007 expires at the end of 2012. Is a short sale evident for you? If so, don’t wait for this tax protection to expire. By the way, this Act only puts home owners on equal ground with investors. Investors don’t pay tax for Debt forgiveness when in the same situation as home owners this Act protects.
My Short Sale negotiator, Georgi Straton, recently met with Bank of America executives and Michael Orr economist with ASU. They are forecasting this to be the last year of significant Short Sales as the number of struggling home owners is dropping dramatically. We will still have shorts for years to come, but there will be less and less as housing recovers.
A quick review of the Foreclosure Scene:
Back to the bank in December was 1,345 homes.
Bank owned homes is 10,221
Let’s Get to the home sales for December, we will start with price per square foot: (spreadsheet)
Metro Phoenix $77.15 psf up 7% from September/August lows above October 2010
Scottsdale $154.69 up 4% from September and above both October/November 2010
Foreclosure $62.36 up 12% from April lows and up from October-December 2010
Short Sale $66.08 up 3% from November, but down 26% from last December
Retail $96.35 up .06% from August virtually unchanged from August – November 2010
What does this indicate?
Prices are rising in both Metro Phoenix and Scottsdale for Single Family Homes when we look at the Average Price Per Square Foot.
Foreclosure Prices are up, there is a perceived value, close quick, shortage of homes.
Short Sales are the main driver of values lower. But may have bottomed through 2011 as buyers could not purchase a Foreclosure Home they turned to Short Sales. As Values firmed through 2011 and rose, buyers were more willing to buy a short sale. There are Short Sale horror stories, now more about Realtors than Banks. Homes selling below market the first day, a complete inability to contact the listing agent or even get an acknowledgment of submitting an offer, all tell me the possibility of fraudulent activities is strong, in my opinion.
Retail or Traditional home sellers are growing. Remember, many Traditional Sales are fix and flips, regardless, I am personally seeing more Retail or Traditional sellers. Values in this market have been bouncing and forming a strong floor. I believe we will see a bounce in prices this year.
Please note, these numbers are based on average price per square foot. The product mix then dictates the market. For example, in 2010 most Realtors would not spend the time on a $60k Short Sale. As the work for the pay, if it closed, was not worth it. So, most low end homes were foreclosed on and sold as a Foreclosure. This year, that market is split with Foreclosure and Short Sale. Also, looking at this product, nearly no one is in an equity position for a home worth $60k, so there are only fix and flips at this product in the Retail/Traditional sale comps. The opposite is true with multi-million dollar homes, but not to such a extreme. As some multi-million dollar homes are sold as Shorts and Foreclosures.
Available Single Family Homes for Sale in Metro Phoenix equalled 14,342. Down 52% from January 2011. Folks, the last time we had this few homes on the market was October 2005, that month we started with just over 14,000 Single Family Homes for Sale in Metro Phoenix and ended the month with nearly 18,000.
Pending Homes or Homes with an accepted buyer contract equalled 13,659. Up 12% from a year ago, but down 10% from the end of November. Pending Homes or Homes under contract continues to drop because there are not enough homes for the buyers in the market right now.
Closed Homes for December was 6,639, down 4% from December 2011 and up nearly 10% from November 2011.
New Sales in December was 5,064 down from both last month and last year and a lack of inventory is causing bidding wars and buyers to go without a purchase.
For all of 2011, there were 85,462 Single family Homes that closed escrow. 12% more than 2010 and a few hundered more than 2005. We sold more Single Family Homes in 2011 here in the valley than ever before.
Condo and Town home sales were 15,504, up 7.5% from 2010 but 18% below the level from 2005. Therefore total sales of 100,966 was up 11.5% from 2010 but 3% below 2005.
REO 27.4% vs high of 49.3% a year ago
Short Sale 33.3% vs a low of 19.7% last April
Retail 39.7% vs a low of 28.6% last January
Foreclosures are down and both Short Sales and Traditional Sales are up.
Foreclosures are down because, more short sales are being approved, investors are buying fix and flips at the trustee sale, borrowers late are down 38% and borrowers in foreclosure are down 50%.
Folks, those are the facts. One can twist them anyway they wish. For example, I see people only quote Maricopa county’s 12,000 single family homes for sale and compare to the 6600 sales, making the market look even better. But then I see the news report the 6600 home sales, then state the available homes higher counting SFR plus condos plus New homes.
I have stayed consistent with my reporting of Single Family Homes in my stats. That means no condos, town homes, mobile homes, land or other. I only report those as a whole, usually at the end of the year when quoting total sales.
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I wish you and yours a wonderful 2012!
Thank You for watching or reading
Just my opinion…based on facts
Jeff Cameron
MRW Homes
The Cameron Team
480-502-7699
Jeff@TheCameronTeam.com
480-652-2004