A Comprehensive LooK at the Current Metro Phoenix Real Estate Market – April 2009

May 10, 2009 at 1:39 pm Leave a comment

Preliminary April 2009 Report

Published by Cromford Report

April 6, 2009 established a bottom for $/SF sales pricing across the Greater Phoenix area. This does not mean that prices will not go lower in certain areas – they will. But the overall average price per square foot put in a convincing low on April 6 and has been moving sideways to slightly up ever since. The increasing sales volume tends to reinforce the significance of this pattern.

Those who wish to see some graphical evidence of this are referred to: The Daily Chart of Sales Price per Square Foot for All Areas and Types

The same chart for single family detached homes in the major cities is available here. Studying this chart I would claim that the cities of Phoenix, Avondale, Gilbert, Mesa, Peoria and Queen Creek are making the best cases for establishing a bottom, while Chandler, Goodyear, Scottsdale, Tempe, Glendale and Surprise still have some work to do. Of course we need to continue to watch to see if the pattern strengthens or fades. The current readings for Pending $/SF suggest more sideways movement in the near term.

Every city showed improvement in April over March with supply falling and demand rising. In some areas the fall in supply was breathtakingly swift. Pending sales rose yet again, actual sales continued their strong advance, and listing success rates climbed. To illustrate the change in the market since January, let’s look at Months Supply for May 1st vs. Jan 1st:

1. Avondale 4.4 (was 8.9)
2. Chandler 5.7 (was 9.1)
3. Gilbert 5.2 (was 7.9)
4. Glendale 3.2 (was 9.1)
5. Goodyear 3.8 (was 8.6)
6. Mesa 4.4 (was 8.9)
7. Peoria 4.9 (was 10.3)
8. Phoenix 3.4 (was 9.0)
9. Queen Creek 2.9 (was 6.1)
10. Scottsdale 14.3 (was 19.4)
11. Surprise 3.3 (was 7.2)
12. Tempe 6.7 (was 8.7)

I would consider an inventory level of 4.5 months as “normal” so we can see 7 out of the 12 major cities now have a “below normal” inventory judging by months supply.

Let’s look at some basic sales numbers:

April sales (all types and areas) – 8,500 (includes 44 out of territory ARMLS sales, e.g. Payson, Prescott, Flagstaff)

Greater Phoenix Lender-owned Property sales – 5,629

Greater Phoenix Pre-foreclosure & Short Sales – 846

Greater Phoenix Normal Sales – 1981

So REOs still dominated the sales figures, but they are not as dominant as they once were. Among the active listings, REOs are declining quite fast – they now comprise about 17% of all listings whereas in early January they comprised 28% of a much bigger number. In fact, considered as a market segment, Greater Phoenix REO listing on ARMLS represent only a 1.3 month supply at their current monthly sales rate.

Pre-foreclosures and short sales are becoming an increasing percentage of both listings and sales, although their listing success rate, having improved from 21% in February to 34% in April, still has a ways to go to rival REOs with their phenomenal listing success rate in April of 86%.

As before, the majority of the sales action is concentrated at the affordable end of the market, but it has to be said that improvement in demand is clearly visible at almost all price ranges.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , .

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