Real Estate Stats

Phoenix not in Top 10, but investors still buying here

Inman News reports on "The 10 Best Markets for Real Estate Investors" and here's some takeaways from that report:




  • Tucson is in the Inman "top ten" best real estate markets for investors, but Phoenix is not.

  • Investors usually pay cash for homes (61% compared to just 20% of owner-occupant buyers who pay cash

  • Most investors plan to own their investment home for about 10 years, and 52% say it's likely they'll buy another property soon

  • Investors are optimistic about the future of housing: 77% say "now is a good time to purchase real estate."


You can view Inman's full report here: http://www.inman.com/reports/10-markets-invest/



Real estate is local, so let's see what's going on in metro Phoenix...


Valleywide MLS statistics show that investors are buying in metro Phoenix, and they're buying a lot of homes. The Cromford Report shows investors are purchasing 24% to 26% of Valley homes sold so far in 2011.



Nationwide, Inman says distressed properties account for 40% of existing home sales, but you can see in the chart above that metro Phoenix area stats are much higher: investors bought 64% of all metro Phoenix area homes sold in May. (6,316 distressed sales out of a total 9,845 homes sold in May 2011).



How's buyer demand in metro Phoenix?


In a word: healthy. Check out this chart, also from the authoritative Mike Orr at the Cromford Report which shows that February 2011 was the third highest buyer demand month since January 2001. Only June and August 2005 -- the peak of the peak of the market -- had more homes sold.




[caption id="attachment_9173" align="alignleft" width="300" caption="Feb 2011 second-highest sales volume for Metro Phoenix since Jan 2001"][/caption]


Are you thinking about buying a home? Either for yourself or as an investment? Contact us before you do anything! We've been helping buyers and sellers in metro Phoenix since 2004, before the boom and bust brought our market to it's knees.


We know how to find and negotiate the best possible deal for you, and our customer service is top notch. Check out what our clients say behind our backs and give us a shout when you're ready to chat with a professional Realtor.

Distressed Sales by Month – July 2010

These charts offer a complimentary view to the New Distressed Listings charts I published yesterday Friday.  The overall number of sales was down a bit across all categories, however, short sales continued to gain a larger percentage of the overall market.

I’ve pulled all the homes sold since 1/1/2009 for Single Family Residences in Maricopa County.

(click each chart to see full size)

Home Sales by Type of Owner

type of seller

.

Home Sales by Type of Occupant

seller occupancy

.

All data was pulled from Arizona Regional Multiple Listing Service (ARMLS) and is deemed accurate but not guaranteed.  (In other words, please don’t make life altering decisions based on this data!)

Your keeping his nose to the trend-line grindstone Realtor,

Chris Butterworth

Where should prices be today?

Phoenix has historically been a very stable real estate market.  Yes, 2005 was beyond anything we could have imagined.  And yes, we’ve been paying for our excesses for more than 2 years now, with prices falling to less than the cost of building in many cases.

Have prices fallen too far?  Have the investors figured that out, and that’s what’s causing the bank-owned foreclosed homes to be sold as fast as they are hitting the market?

Maybe.  In fact, I wrote a post awhile back showing the prices in 2008 didn’t seem too out of line, statistically speaking..

The chart below shows the Average Sold Price for all Single Family Dwellings in Maricopa County, by Month, going back to 1/1/2000.

I took the pricing from 2000, 2001, and 2002 – a very NORMAL period in Phoenix real estate history, and drew a trend line out to today.

The pricing run-up from mid-2003 through 2006 is obvious.  However, it does look like prices have over-corrected.  Hmmmm.  Interesting…

(Click on the chart below to see a full-screen view.)

Maricopa County sales price by month

Your thinks the numbers speaketh the truth Realtor,

Chris Butterworth

Northwest Valley Market Stats – Q2 09

I’m just blown away when I look at the numbers.  I shouldn’t be, because I ‘feel’ the market everyday with our buyer-clients; the low to mid range priced homes are selling quickly, and buyers (and agents!) are getting frustrated.  Now I’m seeing the same story in Excel – it’s hard to argue we’re in tough times when you see these numbers…  But I’ll argue it ~

These numbers are fantastic, and I’m happy to see the bank-involved inventory getting cleared so quickly.  It means we’ve found a price range where investors can make money and where first-time buyers can buy for the same price as the cost to rent.  That means there’s no reason for prices to drop further, which means we may have found a bottom.

However, (here comes the big BUT), these numbers are COMPLETELY skewed by the banks’ business.  Traditional sellers who are unable or unwilling to compete with the banks’ pricing are simply not able to sell their homes.  Buyers who prefer to buy from a traditional seller instead of a bank are not yet willing to pay the required premium.

Again, great activity, great healing process, but not recovered..

Here are the numbers:

NW Valley

(click image to enlarge)

Look at the total inventory by city – all cities have less than 3 months!

Look at the total inventory by price range – small prices are less than 2 months, and up to $400k is only 5 months.  Wow.

Here are the charts from the last couple of quarters, just in case you want to see the trend:

End of Q1 2009

End of Q4 2008

Legal Disclaimer – all numbers were pulled from the ARMLS and deemed accurate but not guaranteed.

Your excited, frustrated, and emotionally & physically drained Realtor,

Chris Butterworth

Phoenix and Northwest Valley home prices

Today’s local real estate market is a strange place – very difficult to figure out exactly what’s going on, whether you’re recounting first-hand experiences from out in the field, or you’re reviewing numbers & statistics on a spreadsheet.  Either way, it’s a strange time in our history.


I’m comparing our current environment to 2003 – the last time our market was considered “normal” – looking for clues or anything else that jumps out at me.


Here are some statistics I found interesting…  (the numbers first, and then some analysis)


NorthWest Valley, Including Surprise, Peoria, Glendale.  Single Family, Detached Homes only.  Sold homes.  All data provided by ARMLS and is deemed accurate but not guaranteed.








































































 Jun 03Jun 09Definition
Minimum46,48816,000Lowest Price Sale
Quartile 1126,50092,00025% of sales are lower than this number; 75% are higher
Median149,000135,00050% of sales are lower; 50% are higher
Quartile 3190,000187,50075% of sales are lower; 25% are higher
Maximum1,200,0001,185,000Highest Price Sale
Count9701,191Number of homes sold during period
Total $166.4 mil180.3 milTotal dollar amount of all sales during period
Avg CDOM55.8112.9Average number of days on the market
Avg $/sale171,546151,385Average Sales Price
Sold / List98.50%98.50%Sold Price as a percentage of List Price

~

## The upper sales prices are very similar to 2003.  Today’s median price is 10% lower, but the 3rd Quartile & Maximum Sale Price are almost identical.  This seems to mean that the upper half of the market is similar to 2003.


## The Sold Price as a percentage of List Price is Identical!!  Wow.  Couldn’t guess it’s a bad market by looking at that number..


## We sold 23% MORE homes last month than in June, 2003.  Again, that’s not the sign of a bad market.


## We’ve all read about the banks’ activity driving the market; this must be at the lower half, where the changes from 2003 are more pronounced.  The Minimum and 1st Quartile are significantly lower this year, meaning there are far more small-dollar sales happening.


## This is validated by the smaller Average Sales Price; more activity at the lower prices.  Today’s average is much closer to the median.


## From first-hand experience in the field, we know that low-priced homes in this part of the valley are selling quickly – many times with multiple offers above List Price on the first weekend.


## If the Average time on the Market is approx. 4 months, and we know the low-priced homes are selling quickly, then the more expensive homes must be sitting on the market for much longer.  This means the upper price ranges are NOT the same as they were in 2003.


Hmmm.  I guess the statistics back up what we thought after all..   Lots of activity, fast-moving market at the lower prices, difficult for sellers at the higher price ranges…


Your double checking his math Realtor,


Chris Butterworth

Sunday Stats, A Little Late

Readers who watch my Sunday Stats feature know that I sometimes run a day late and a dollar short with my posts. Sometimes Sunday Stats shows up on Monday. This week it's Tuesday. Sunday was Superbowl and Monday was food poisoning. Kidding. (Not really)


To make up for being two whole days short this week, I'm also posting month end numbers for January, and adding a slew of new ZIP codes to my stats tracker. Off we go. . .


sold-ytd-since-2000The above mini-chart show properties sold in metro Phoenix region, per year, since year 2000.  Strictly from a sales volume perspective, 2008 wasn't so bad.


Now, for our clients and readers who are engineers, analysts or other varieties of data whore, here are the full stats chart from July 2008 through end-of-month, January 2009:



january-2009-mtd-stats

The "Months of Inventory" number is the crucial factor in determining how close we are to "normal." Most forecasters, Realtors and economists say a normal real estate market has about 6 months' of inventory for sale. For the first 6 weeks of 2009, we're averaging 4,660 properties sold in a rolling 30-day period. That's pretty close to normal. What's not normal is the number of homes for sale. At 4,660 sold per 30 days, we should be carrying no more than 28,000 homes for sale (4,660 x 6 = 27,961).


With 51,281 properties for sale today, we're nearly double the inventory we should have for sale, given our current pace of sales. As so many others have said, metro Phoenix has a ways to go before we burn through all our excess inventory. Ridding ourselves of excess inventory is the only way to get back to normal. That is, unless people start buying twice as many homes per month. Given the credit and jobs market we're in, that's unlikely <sarcasm>.



ZIP Codes Breakdown


Finally, below is the breakdown of homes for sale, pending and sold by ZIP code.  Beginning this week, I'm adding a bunch of new ZIP codes to my weekly stats tracker. That's to reflect the new partnership with Chris Butterworth, formerly my mentor.


Between us, Chris and I now handle an immense swathe of the metro Phoenix real estate market. These are the ZIP codes where we feel most 'at home'.  These areas represent our combined 'backyards' where we've grown up, spent time shopping, working, dining and/or raising families.


But they're not the only ZIP codes we'll work in, by any means. Chris is currently working with an investor in Tempe and I'm helping buyers find The One in Ahwatukee.


On to the stats. As always, red means a move away from a balanced/normal market; green means the stat moved towards balance.



2-3-2009-11-37-15-am

Finally, for the curious and the out of town readers, here's a snap of the ZIP code map I use daily. It shows most of the areas that we at The Phoenix Agents cover.

zip-code-map

Here's a link to the easiest to use free ZIP code map that I've found oline. It includes the updated ZIP codes assigned to the metro Phoenix area in summer 2007. The same data is presented on this website too. Just don't click on any of the side advertising links on either one of these! They're total crapola.

October Month-End Stats

Click to enlarge; use browser "back" button to return.

Here are the end of month October numbers. I posted on the 24th of October that the mid-month numbers looked dismal (see bright yellow highlights: 5.94% sold in past 30 days, which was down over 50% from the mid-September number).


Then, I blamed it on the bad economic news - bailout after bailout after bailout - and on the waning days of the Presidential campaigns making people hold their breath.


Today, the numbers don't look so awful - 9.54% sold in past 30 days, versus 11.16% sold in past 30 days back in mid-September.


Still, the wild stock market swings and accompanying news of layoffs, continued talk of recession and even the specter of deflation have taken a toll on the metro Phoenix market. Buyer demand dropped 15% since mid-September, while the inventory of homes for sale continues to rise, edging up 4% since September 22.


It's almost certain that the number of homes for sale will continue increasing, since the number of foreclosure notices were up 71% in September, year-over-year. Most of those homes will end up for sale, either as short sales or bank owned properties.


In the world of simple economics, more stuff for sale and fewer buyers buying equals prices going down. Whether the continue price declines fuel more bargain hunters to buy Phoenix real estate is something only time can tell.


I'll be back next month with more numbers. Mid-month if the stats warrant.

Month End Stats, September

Click to enlarge chart; use Back button to return to post.


Well, we're teetering. For months now the metro Phoenix market showed a small but significant improvement toward a balanced market every month. The past 2 months just sort of hang there, not improving or declining much. Ever the optimist, I believe it's a temporary condition. We'll go back to slow and steady monthly improvements before too long. The pragmatic side of me agrees with the optimist: it's already pretty horrendous, historically speaking, so we can only go up from here, no?


Why the temporary setback in our march toward housing recovery? It's probably a combination of factors, just like it was a perfect storm of bad economic news that led us to the recent $700B rescue bailout.


The number of foreclosure properties hitting the market each week continues to grow. The Business Journal reports we hit an all time high of 2,210 foreclosure notices issued in one week (in September). More inventory for sale is 'bad' when your goal is balance in the market.


Deals are harder to consummate lately. Sellers and buyers alike are nervous and stressed. I joke with friends and colleagues that I'm working 3 times as hard for 1/2 as much money. But that's not really a joke; it's reality.


We're entering a season that's typically slow. Fewer people want to be bothered selling their house or searching for a new one in the fall and winter. We'd rather watch football. Or election forecasting, if that's your thing.


I've been told (but can't find supporting data online) that Presidential election years are slower years for real estate sales. That just makes sense. Who want to take a $250,000 (or more) leap of faith when they're waiting to see which way the tax policies will blow next year? My own theory on that is that it really doesn't matter whether a D or an R sits in the White House next January. As long as regular folks know what they're in for over the next 4 to 8 years, life on Main Street goes back to normal.


Here's to normal! I'm looking forward to it.

Month End Stats – August

This month's stats are showing the same slow, steady trend towards a balanced market. I feel silly saying the same thing month after month, "we're nowhere near normal but we're getting there."


But, it's true.


Months of Inventory is the amount of time (in months, natch) that it would take to sell every home that's currently for sale, assuming homes continued to sell at the same pace and no additional homes were placed for sale. Most real estate practicioners and economic forecasters agree that a 6 month supply is about 'normal'.


Note: I include all types of MLS-listed property in my monthly stats. This includes single family, detached houses, patio homes and townhouses, apartment style condos, lofts, pre-fab and modular housing. Why? It's microscopically easier to run the stats without screening out any property types. And I also figure that every sale of a home should count.


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Month End Stats for July

A little bit late posting these this month. I also got busier than expected and didn't pull the stats weekly like I usually do. There are a few holes in the chart as a result. Oops. But the crucial numbers are there - the number sold in the 30 days prior to the data pull data, and the all-important monthly inventory number.


It's impressive that our "months of inventory" number keeps dropping - albeit slowly - even as we're slammed by the increasing number of foreclosure homes hitting the market. There are bargains out there for buyers willing to hold properties for 5 to 7 years+, and there are ways for sellers to compete in this price-sensitive environment.


Need help figuring out what you should do now? Call or email me to talk about your situation.

Month End Stats - June

Digging out of a hole is a long process isn't it? June was the 9th month in a row that showed improving numbers for overall inventory and we're not out of the woods yet. We are making steady progress though. It's like dieting - a little at a time, inching towards a slimmer, trimmer, marketplace. Prices will continue to be vulnerable for some months to come since there's still waaay too many houses for sale. However, sales volume is inching upward every month. If that continues, we should be at a blanced market sometime in the Spring.


Again, "months of inventory" is just a measure of how many months it would take to tell every home for sale, given the current pace of sales, and assuming nobody else listed for sale. It's an artificial number in some sense, because how often does time stand still? But it's the number we all use because it works, somehow. When you get to about 6 months of inventory on the market, you're about balanced. See more on the absorption rate here.


(click to enlarge)

May Month End Stats – Market Continues Improving


The May month-end numbers look positive again, for about the fourth or fifth month in a row. We keep moving incrementally in the right direction. This seems to be the classic tale of the tape of a recovering market. "Percent Sold" increases monthly while the "Months of Inventory" number shrinks. Sales volume is back up to a respectable and normal 5,000 a month.


The number I find most compelling is overall "Months of Inventory," a.k.a. "Absorption Rate". This number means that if no more houses were listed for sale and we continued at current sales pace, it would take 9.99 months to sell every home on the market. In 7 months, we've whacked inventory in half. Very good progress. Most experts agree that 6 months of inventory is 'normal'.


That's not to say we're back to the heady heyday of summer 2005. Downward pricing pressure continues, especially in neighborhoods with a large number of short sales and foreclosures.


But see also my colleague and friend Jonathan Dalton who says that bank owned properties are flying off the shelves. Jonathan has numbers to back that up.


I don't have numberes, but I've got anecdotes. I was actually presented wth a Multiple Counteroffer form last week on behalf of a buyer looking for a bank owned property. By the by, we lost out on 2 different bank owned properties because we weren't fast enough. Home number 1 wasn't even officially for sale yet! I spent 2 full days calling the bank's HQ in Philadelphia and finally found the local listing agent. She told me the bank hadn't set a price yet and weren't even looking at offers. Seven days later I called back only to find it was sold. Apparently several buyers sent offers directly to the bank HQ in Philadelphia because they wanted the home so badly. Mind you this home needed 2 40-yard dumpsters of junk removed and toilets installed before it was even inhabitable as a flop house. My investory buyer estimated he'd spent $30,000 in rehab, bare minimum.


You can also see my friend & colleague John Wake who create awesome statistical charts - he says sales are picking up steam in outlying areas like Anthem and Queen Creek.


As always, this is data from the MLS and includes homes, condos, patio homes, townhouses and even mobile homes and land. It also includes bank owned homes, foreclosures, pre-foreclosures and short sales. It does not include properties not sold through the MLS (for sale by owner, private sales, the example above where bank sold to investor before house hit the MLS). Why only include MLS data? It's the data I can access most easily and MLS sales represent the bulk of property transfers in the Valley.


April Month End Statistics


The numbers continue improving a little bit each month. Sales are increasing and we're back to nearly 5,000 sales a month. That's a nice, healthy, "normal" pace for home sales. Inventory of homes for sale is holding steady at 56,000. The number of homes pending under contract jumped again to 8.74% (from 8.20% about 3 weeks ago and a dismal 6.06% at the beginning of this year). We've got an 11.44 month supply of homes for sale, which is lower than its been since I began tracking these stats last October. The number "should" be 6 to be considered normal, but we're digging out of a pretty deep hole, so it'll take some more time.


(Months supply means if no one else listed their home for sale, and we continued selling homes at the current pace, it would take 11 and one-half months to sell all the homes currently on the market)


Combined with anecdotal evidence from just about every Realtor and title officer I know, who all say that they're busier than they were during the height of the boom, and I think this is encouraging news. Jonathan Dalton sports some awesome numbers over at his website, Daltons AZ Homes that show lots of our market activity is coming from people buying lender-owned and short sale homes. I'm just happy to see a continued decrease in the 'months supply' number.


Month End Stats – February 2008

I'm a near-total techno nerd (in the bad way) and can't figure out how to put a chart right into my blog post without it going all visually wonky.



So here's a PDF of the most recent stats, up through the end of February.
pdf-of-monthly-sales-inventory-numbers-for-blog.pdf
Catchy file name, no? <Snerk>

The summary? We've got a heckuva long way to go to 'normal', but at least the numbers are still moving incrementally in the right direction.


One very interesting item on the chart -- the number of pending properties jumped all the way to 10% of our current inventory. Could this mean the traditional spring buyer bump has begun?!?


Sales are historically higher in the spring and summer months, as parents look each other in the eye over the dinner table (or over late night drinks) and say to each other, "Honey we should move to get the kids in a better school district before next fall." If that process has begun, Gawd bless them. Parents striving for a better education for their little monsters just might be the salvation of our market. Or at least the beginning of the snowball. Or dustball, given we're in the desert.


'Course, it could also be that 10% of our inventory is pending but many of those will fall out of escrow. That would be BAD. Or it could be that first time buyers are getting the message that now is one of the best times in their young lives to buy real estate. That would be GOOD. Or it could be that cash-poor buyers of all stripes are getting the message that Zero Down financing is still available through various programs like AmeriDream and Nehemiah Corp, and most buyers can still buy with only 3% down via FHA programs. Those too would be GOOD.


Only one way to know. Wait and see what end of March numbers look like.