Market Overview For Maricopa County - March

Average Sales Analysis:
Sellers:
We have been watching this statistic very carefully to determine if the increase in average sales price was just a blip or a trend.  From all indications, we can now see a trend, and that we hit the bottom of the market in August.  Since then, we have seen a 20.8% increase in the average sales price.  March saw an 8.97% increase over the month of February. This is the highest price we have seen since June of 2010! The average sales price increased from $172,603 to $188,088.It will be important to monitor the impact this trend begins to have on appraisals and finding qualified buyers at these higher prices.
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Buyers:
For buyers, it is absolutely critical to be aware of this shift in the price of homes.
This increase means that buyers once again have less buying power than they did in the prior month.
There is no doubt that the low inventory has created competition for the current inventory, and that this high demand is impacting prices.More than ever, you need to work with your real estate professional
to make sure you have the best possible information regarding the market value of homes
and to carefully monitor this trend to see how it will impact the availability, pricing,
and terms associated with purchasing a home

Distressed Sales Analysis:
A bank owned/foreclosure home is one that the seller no longer owns – it has been taken over by the lender(s) who had a note on the home.  Short sales are homes where the seller is negotiating with the bank to “forgive” a portion of the debt in order to avoid foreclosure. 

March statistics show that the pieces of the pie are definitely continuing to shift toward a more traditional market-- March bank-owned sales decreased by 2%. Short sales decreased by 2%, and traditional sales INCREASED by 4%.

This statistic means that the competition from foreclosure properties continues to decrease while traditional sales from sellers with equity continue to increase the percentage of activity in our current market. Sellers and buyers need to monitor this trend to see how the market continues to respond to the current inventory.

Pending Sales Analysis:
Sellers:
Pending sales continue to increase.  March saw another increase in the number of sales moving to pending status – a staggering 9.3% increase over the month of February.  Although this isn’t the highest number of properties moving to pending status in the 36 months, it is important to remember that there is much less inventory now, meaning that a much higher % of properties are moving to pending status. Sellers should continue to monitor these numbers to determine what type of activity there should be on their homes. This jump in pending sales should show up as an increase in closed sales over the next few months.

Buyers:
Buyer activity continues to remain very high as the available inventory decreases in today’s market.  Educated and savvy buyers understand that a competitive market gives them fewer options for home choices, negotiating on price AND looking for concessions from a seller.  Although this may vary from area to area AND from price range to price range, buyers need to make sure they are fully informed regarding the individual market in which they have an interest.  This will give them the best chance of being competitive in the search for a home.

							MARCH	2012
MARCH OVERVIEW				# of Expired & Cancelled listings	1 month averages------------------------------------------------------------------
Price range 1,000s	# of Active listings	# of Pendings & AWC	Pending Ratio		# of Closings Last month	Average List Price of Sold Homes	Average Sold Price	List to Sales Price Ratio	Days on Market (Agent)	Days on Market (Cumul)
0 - 99,999	1,671	6,274	375.5%	545	2,621	$             65,768	$           66,007	100.4%	76	83
100,000- 124,999	643	2,092	325.3%	155	909	$           113,697	$         111,491	98.1%	69	75
125,000- 149,999	791	2,170	274.3%	167	913	$           137,985	$         135,734	98.4%	66	75
150,000- 174,999	639	1,490	233.2%	101	623	$           162,040	$         159,170	98.2%	73	85
175,000- 199,999	713	1,127	158.1%	100	562	$           188,236	$         183,247	97.3%	80	90
200,000- 224,999	463	729	157.5%	69	311	$           212,946	$         208,294	97.8%	81	94
225,000- 249,999	598	782	130.8%	70	355	$           237,289	$         231,413	97.5%	75	85
250,000- 299,999	963	998	103.6%	127	476	$           275,535	$         267,227	97.0%	100	112
300,000- 349,999	707	611	86.4%	88	273	$           325,948	$         315,558	96.8%	87	101
350,000- 399,999	655	475	72.5%	93	213	$           375,032	$         361,893	96.5%	102	122
400,000- 449,999	417	258	61.9%	58	116	$           428,929	$         414,755	96.7%	111	117
450,000- 499,999	366	198	54.1%	53	110	$           477,204	$         458,768	96.1%	100	120
500,000- 749,999	929	441	47.5%	95	216	$           606,668	$         578,282	95.3%	111	129
750,000- 999,999	564	166	29.4%	51	73	$           858,497	$         818,871	95.4%	182	199
1 million +	1,182	177	15.0%	97	90	$       2,132,238	$     1,749,010	82.0%	234	260

Home Prices Headed Upward!

Home prices are climbing in metro Phoenix faster than they have since the housing boom.

Some parts of the region experienced home-value increases of 5 to 10 percent a month this year because of a shortage of homes for sale that is sparking bidding wars between investors and regular buyers armed with pre-approvals for mortgages.

 Valley home values database

This emerging recovery of home prices in the Phoenix area started late last year and has been building each month.

Home values still have a long way to go to recover to pre-boom levels. Metro Phoenix's median existing-home price is currently $124,500, about $20,000 below the area's median in 2002 and well below the $267,000 from the height of the boom in summer 2006.  But many housing-market analysts see this as the beginning of a long-awaited recovery for the area's battered housing market. The uptick in prices is enticing more buyers who have been waiting for the market's bottom to purchase a home and now have likely missed it.

Investors have driven the market, usually paying cash for low-priced homes and beating out other bidders. About 60 percent of homes sold in metro Phoenix this year have gone to cash buyers.

Now, both investors and regular buyers trying to purchase before prices climb higher are giving Phoenix's housing recovery momentum.  However, not all parts of the region are showing the same positive signs. Areas with lower-priced homes are drawing the most buyers, while the Valley's high-end housing market is still in a slump.  Communities in metro Phoenix with better schools, shopping and freeway access are also beating out other neighborhoods -- not far away -- for home-price increases.

Micro-markets

Many of the metro Phoenix neighborhoods and communities seeing the most rapid increases in prices now experienced the biggest drop in values.  Some communities on the edge of the region, including Goodyear in the west and Queen Creek in the southeast, drew more speculators and homebuilding during the boom. Many of the buyers had subprime loans that resulted in the Valley's first wave of foreclosures.  Home prices in these new communities plummeted much lower than the region's median but are now rising the fastest.  For example, in Goodyear, the median home price has climbed 14 percent in the past year.  But while the increases are large, the prices are low: The growth translates to a median home price of $92,000 in the area, compared with $81,000 in 2010.  Some neighborhoods with bigger homes in the southeast Valley cities of Chandler and Gilbert are posting significant price increases, even though the areas didn't see huge previous declines. Chandler's median home price has climbed to $186,000 from $170,000 last year.

Bidding wars

Martin Dace has been shopping for a house in the southeast Valley for nine months. He has been outbid by both investors and regular buyers on foreclosures and short sales.

Now he's considering buying a new home in Gilbert, near his job. Though the new home will cost $25,000 more than a short-sale house of the same size, he won't have to worry about being outbid.

"I am ready to buy and move in," he said. "I am tired of losing out on bidding wars. And new homes' prices are bound to go up, too, at some point."

Housing analysts say higher-paying jobs and better schools in the East Valley draw buyers willing to pay more to live there.  Homes priced below $400,000 in established neighborhoods are selling the fastest, real-estate agents say.

Struggles remain

The high-end housing market was the last to crash and is now the slowest to recover. Homes priced above $1 million in Paradise Valley and parts of north Scottsdale are generally slow to sell.  Mike Orr, a real-estate analyst with Arizona State University's W.P. Carey School of Business, said supply is a problem for the million-dollar-plus market.  He said so many homes are for sale with price tags and mortgages above $1 million, that this portion of the market could take a few years to post increases.  The median price of a home in exclusive Paradise Valley has fallen to $870,000 from $1 million a year ago.  Though, last week, a Paradise Valley home did sell for $10.5 million in cash, the highest price paid for a metro Phoenix home since the boom.

Looking ahead

If the current trends continue, with fewer foreclosure homes for sale, home prices will also continue to rise, real-estate analysts say.  Foreclosures did climb slightly in February, but not enough to alarm housing-market watchers.  The number of metro Phoenix homes taken back by lenders during February is still less than half the number of foreclosures recorded during almost every month in 2009.  Also, the number of homeowners behind on their mortgages in Arizona continues to fall. So, many market watchers don't expect another big jump in foreclosures.

Post-foreclosure sales are another matter -- banks decide when to put those homes back on the market. If they were to flood the market with a large supply of vacant homes, they could drive prices down again, as a similar move did in 2008-09.

Longer term, experts are gauging a housing recovery not by bank-owned homes but by homes for sale by owner-occupants.  Orr said the recovery will feel much more real when homeowners who bought before the boom feel optimistic enough to put their homes on the market.

"Many homeowners and buyers are still several months behind the reality of what's going on in metro Phoenix's housing market," said Orr, who also publishes the Cromford Report, an online daily real-estate analysis. "The housing market started recovering last year and hasn't stopped."

-Arizona Republic Sunday 4/2/2010

30-Day Market Snapshot as of 3/30/12

Active listings in ARMLS                 11,487                (11,193 last week)          

Active with contingency                    7,068  (7,026 last week     

Pending sales                                 11,374  (11,391 last week) 

Sales in last 30 days                         7,339                   (7,061 last week) 

Cancelled in last 30 days                  1,416                (1,374 last week) 

Expired in last 30 days                        356                   (360 last week)

Temporarily Off Market                        705  (660 last week)