Market Summary for the Beginning of August
Although we didn’t see the record breaking sales numbers of June, July had plenty of positive news for market watchers. An important exception was pricing, and no doubt much will be made of that by the housing doom folks, but then Cromford Report readers all know that pricing is a trailing indicator, don’t we?
According to the current ARMLS data, 8,522 homes closed during July across all areas and types. This is 19.4% below the 10,568 we are measuring today for June. This dip between June and July is a normal seasonal effect. The key comparison to make is with July 2010. Here we are up 23.3% compared with 6,911 a clear sign that the market is healthier today than it was last year when we were reporting significant deterioration.
Due to the exceptionally large number of short sales in the ARMLS numbers, we experience a lot of “turbulence” in these sales numbers and they continue to change for many weeks after the end of the month. On July 2 last month we could see 3,057 short sales and pre-foreclosures across Greater Phoenix but this number is now measured at 2,481. The flexmls system automatically closes pending transactions when their Close of Escrow date is reached. Quite often a snag occurs in real life and a sale fails to close when expected and has to be manually reversed later. This is far more likely to happen with short sales than other types because of the large number of approvals and documents needed to successfully close escrow. As usual our sales counts will be constantly monitored and corrected as newer statistics emerge on a daily basis. The 19% drop-out rate for June is the highest we have seen and is unlikely to be repeated in July’s numbers, but please treat all reports with caution due to this effect.
Here are some key figures for all areas & types:
Pending Listings: 11,491 on August 1, down 6% from 12,224 on July 1, but up 17% compared with August 1, 2010.
Active Listings: 27,787 on August 1, down 3.6% from 28,837 on July 1, and down 34.6% compared with August 1, 2010.
Listing Success Rate: 74.4% on August 1 which compares favorably with 73.5% on July 1 and very favorably with 58.5% on August 1, 2010.
In a normal year supply starts to increase from the beginning of July, so that 3.6% decline in active listings is a positive sign. Because of the lower monthly sales rate in July, months of supply has edged up from 2.9 to 3.0 months, but this is well below normal. The average months of supply for 2001 onwards is 5.8 months. A less volatile way to measure inventory is to divide active listings by the annual sales rate as this largely eliminates seasonal effects. Here we are seeing 105 days of inventory, improving from the 110 we measured last month and the lowest number of days of inventory since February 2006. The average days inventory since January 2001 is 174, so we have a significant under-supply of homes for sale through ARMLS.
Supply continues to drop while demand remains relatively strong. However that demand is not evenly distributed across the price ranges. In the last month we have seen the market strengthen at the low end while losing a lot of momentum at the middle and high end. Compared with July 2010, this month saw dramatic sales growth for single family homes below $100,000 but above that figure the picture is mixed. A few ranges performed fairly well, notably $100K->$125K, $175K->$200K, $400K->$500K and $1.5M->$2M, but there was a huge hole at the very top end of the market. Last year we had eleven closed sales over $3,000,000 during July and this July we have just one. Sales volumes are also down between $225K and $400K and between $600K and $1.5M. As you can imagine, an increase in the volumes under $100,000 pulls the average sales price and the average sales price per sq. ft. down substantially. The sales weakness in the higher range exacerbates this. However all that buying at the low end has caused the median sales price to stay fairly strong and it has barely changed over the last seven months.
As is normal when a market is attempting to recover from a long and disastrous plunge, there are plenty of conflicting signals:
Signs That Prices Are Going to Go Down
- The average list price per sq ft for pending listings continues to drift downwards, down 1.5% in the last month.
- The average asking price per sq. ft. for normal listings has fallen by 1.6% in the last month.
- Monthly average sales prices are making fresh lows.
Signs That Prices Are Going to Go Up
- The average asking price per sq. ft. for lender owned homes has risen by 7.4% in the last month.
- Sold price as a percentage of list continues to go up.
- Remarkably few listings are being canceled or expired.
- Investors are now purchasing nearly 40% of the properties auctioned at trustee sales in Maricopa County.
- Average days on market for closed sales is coming down.
Signs That Price Are Going to Stay Flat
- The average asking price per sq. ft. for short sales and pre-foreclosure has barely moved in the last month.
- Median sales prices are essentially flat.
So you can take your pick. It seems to me that although the supply/demand imbalance is becoming extreme, demand from investors alone is unlikely to sustain a significant upward price movement. We may have to wait until the general public realizes the degree to which the reality and perception of the supply picture have diverged, so that fear of missing out on a bargain overcomes the fear of prices dropping yet further.
There are still many sources claiming that a “new tidal wave of foreclosures” is going to hit the Phoenix area. This is pure imagination and reminds me of the Y2K phenomenon in 1999. Despite a busy final week in July, the trustees of Maricopa County only issued 4,194 new notices of which 4,015 were residential. This compares with 8,140 in total and 7,802 residential for July last year. Foreclosure notices are down 48% to the lowest level since December 2007. As for actual trustee sales, we had 3,330 in July of which 3,176 were residential. This is 31% down from July last year and 36% below March this year. The trend is obvious and strongly downward and it seems we are about 75% of the way through the foreclosure tsunami of 2007-2012. This observation is only made about Maricopa County and is probably not true elsewhere, especially in states that use a judicial foreclosure process.
Source: http://cromfordreport.com
Making an Offer on a Fannie Mae Owned Property
THE FANNIE MAE ADDENDUM SIGNIFICANTLY AMENDS THE ARIZONA REAL ESTATE CONTRACT.
It is critical that all parties read and fully understand the addendum and how it will impact the transaction. Inspection periods and loan commitment items are described carefully in the addendum and DO DIFFER from the AAR (Arizona Association of Realtors) contract. Some of the critical differences include, BUT ARE NOT LIMITED TO:
FNMA does not sign the AAR HOA Addendum to the purchase contract; regardless of any boxes that may be checked on this addendum and signed by purchaser, seller will pay ONLY the HOA Resale Disclosure lnspection fee along with any delinquent dues owed; they will not pay any other fees that the association may require at closing. This would include the transfer fee.
Paragraph 3 puts a time limit on the mortgage loan commitment which is much different that the AAR contract. If the lender has an underwriting issue after that date, the purchaser could lose their earnest money. Additionally, the purchaser guarantees the lender will fund by the closing date (section 3(b). Note, most Escrow agents must be allowed approx. 24 hours, from receipt of loan docs, to process documents and schedule appointments. YOU MUST ALLOW A MINIMUM OF 72 HOURS FOR FNMA APPROVAL OF HUD-1 BEFORE CLOSING CAN OCCUR.
INSPECTION PERIOD BEGINS AT ACKNOWLEDGEMENT DATE. Paragraph 5 of the addendum clearly outlines the inspection period terms. This is generally verbal acceptance from the listing agent and that is when your 10 day inspection period begins.
Paragraph 6 of the Addendum is where “The Purchase acknowledges that the closing on this transaction shall be deemed the Purchaser’s reaffirmation that the Purchaser is satisfied with the condition of the Property and with all repairs and treatments to the Property and waives all claims related to such condition and to the quality of the repairs or treatments to the Property”.
Paragraph 18, all parties agree and understand these are foreclosure properties. There are potential title Issues. IF THE SELLER CANNOT PROVIDE A CLEAR TITLE, THEY HAVE THE RIGHT TO EXTEND THE CLOSING DATE OR TERMINATE THE CONTRACT. If cancelled, earnest money will be refunded to the purchaser (Section 15 and 18).
Names of purchaser(s), at closing, must match exactly to what is submitted on original contract and addendum; any changes must be re-submitted to seller (thru listing agent) prior to close; any name variation not previously approved will delay the closing or possibly negate the sale.
Paragraph 23 requires the re-keying of the property prior to closing at purchaser’s expense. This charge will be on the final audit and paid thru escrow to vendor chosen by listing agent.
The lender’s Real Estate Purchase Addendum supersedes the AAR contract and in the event of conflict, the Addendum will prevail.
Make sure you have read and understand the lenders Real Estate Purchase Addendum.
Stephanie Weiss Moves 480.273.7472
Carino Estates, Chandler Arizona
Carino Estates is located south of Ryan Avenue, between Alma School and Arizona Avenues in the heart of south Chandler and developed by Shea Homes. Hancock Elementary School is located at 2425 S. Pleasant Drive adjacent to the vast Ryan Park, north of Ryan Avenue and Hamilton High School, a very popular school is located at 3700 South Arizona Avenue.
With many major employers like Intel, Orbital, Wells Fargo and Americredit as well as stores and restaurants such as Target, soon to open on Arizona Avenue, Stein Mart, HomeGoods, Sprouts, OfficeMax, Native New Yorker, Albertsons, Keegans, Big 5 Sporting Goods, Fry’s and the Cobblestone Auto Spa, there are many options to choose from.
As far as pricing right now, Carino Estates couldn’t be more affordable! There are currently 5 active listings ranging from $189,900 (1620sf) to $289,900 (2286sf). 9 listings are currently pending and within the past 3 months, there have been 16 closings with a low of $170,000 (1456sf) to a high of $352,500 (3024sf) and an average of $240,825 (2275sf).
Out of the 16, 4 were short sale/pre-foreclosures, 5 were lender owned properties and the remaining 7 were regular transactions. All 16 were FHA, VA or Conventional financing. Properties in Carino Estates are currently on the market for an average of 102 days. Regular or non-distressed properties are on the market an average of 95 days while distressed properties such as short sales, pre-foreclosures and lender owned properties are on the market an average of 108 days.
Carino Estates is a great community and with Ryan Park and the many greenbelts, you will always see kids playing, people walking their dogs or just basically enjoying the great weather! If you’re thinking of making a move in Carino Estates, whether buying or selling or any area on the southeast valley, please give me a call.
Stephanie Weiss 480.273.7472
ValleyWide Property Services
Stephanie Weiss Moves
Marco’s Prescott Cabin
If you’re looking for a cozy cabin retreat in the mountains of Prescott, Marco’s is the best place in Arizona to do just that! This is truly a private getaway in the cool mountains of Prescott, Arizona. Take a walk and enjoy the scenery, relax with your sweetheart, family or just reflect on your own. This retreat has all you need for an enjoyable stay without ever leaving after arrival. Just stop at the store along the way and bring your food, clothes and enjoy this great Prescott Cabin.
View the Video: Prescott Cabin Rental
Things to do
• Hike Thumb Butte
• Rest and Relax
• Visit the Square
• Rest and Relax
• Sit by the fire
• Rest and Relax
• Drink some wine
• Rest and Relax
• Play a game of pool
• Rest and Relax
• Have a Barbecue
• Rest and Relax
• Play golf at Antelope Hills
• Rest and Relax
• Visit Young’s Farm (Fall) 520-632-7272
• Rest and Relax
Tradition here is to bring two bottles of wine to leave and then share the ones you find
when you get there. (See framed instructions in the dining room.) Please write in the journal before departure. Take a trip to Prescott and you won’t forget the view or how great you feel when you go home.
Reservations Required.
Rest and Relaxation Required
Contact Marcus Sipolt’s 602-502-2837
Additional Links:
Prescott Arts & Entertainment
Prescott Attractions
Prescott Golf
Prescott Lakes
Prescott Shopping & Dining
Prescott Tours
Prescott Parks & Recreation
Portello (Village at Dobson Crossing), Chandler AZ
Here’s a look at a new home community in the very popular Ocotillo area of south Chandler known as PORTELLO. Formerly Village at Dobson Crossing, PORTELLO has a total of 162 lots comprised of 87 1-story and 75 2-story homes, built between 2006-2010. This community was started by Randall Martin who then lost the remaining vacant 86 lots to a trustee sale which were purchased by Blanford Homes in April 2009 who then completed the project.
PORTELLO is located just south of Queen Creek road and west of Arizona avenue and is a lovely community located close to Intel, Hancock, Elementary School, Hamilton High School and several public golf courses including Bear Creek, Loan Tree Golf Club, Ironwood, Oakwood and Ocotillo Golf Course as well as all the restaurants and shopping that Chandler has to offer. A brand new Target is almost completed and is located a mile south of this community.
There is only 1 active listing in PORTELLO which is 2,929 square feet, a 4 bedroom, 2.5 bath and listed at $229,990 or $78 psf and a short sale. Properties of this same size in 2006 were closing at $142 psf or approximately $434,000. That’s 53% of the value from 2006!
There are 2 pending transactions at $237,900/$82 psf (2,910sf) and $259,900/$79 psf (3,273sf) both of which are lender owned properties.
There have only been 2 closings since January 1, 2011. One was an 1,800 square foot property which sold for $194,900, the other a 2,746 square foot property which sold for $229,900. These 2 closing fetched 97% and 100% of list price.
In case you hadn’t noticed, our inventory is shrinking and with interest rates still historically low, this is a great time to buy!
If you’re thinking of making a move whether buying or selling in the southeast valley, why not check out PORTELLO or the many communities that I have put together for your review at Stephanie Weiss Moves and then give me a call.
Stephanie Weiss, REALTOR® 480.273.7472 Stephanie Weiss Moves
Market Summary For The Beginning of June 2011
It feels almost like the inverse of 2005.
In the second half of 2005, supply rose dramatically but no-one seemed to take any notice. There was a widely believed myth that prices could never go down. Between March 31, 2005 and June 30, 2006, active listings rose from 8,394 to 45,729 (up 445%) creating a huge glut of homes for sale. Yet average sales prices continued to rise throughout this period, up 28.6% from $146.98 to $189.05 per sq. ft. Meanwhile demand fell 16.5%, with sales per month dropping from 8,490 to 7,093. It was as if everyone believed the laws of supply and demand no longer applied. Of course we found out by 2007
that supply and demand really did matter and the bubble burst explosively in
2008 causing untold damage to the economy and family finances.
It’s a question of timing. Supply and demand do control pricing, but in real estate there is a very long time delay between cause and effect. That timing can be extended even further by sentiment. In 2005 sentiment was off-the-charts positive – “irrational exuberance” ruled the roost and caused people to make decisions that in hindsight look crazy. Not just homeowners and developers, but especially lenders and the investors who fueled the credit surplus. Those few of us who tried to warn people in early 2006 that prices would fall dramatically were treated a bit like Harold Camping predicting the end times.
The opposite seems to be happening now. Sentiment is very negative. Everyone seems convinced that prices can only fall further, yet demand is rising and supply has been falling like a rock dropped off a cliff for 6 months now. It comes down to one simple fact: people believe what they want to believe. The facts do not exert a significant influence.
Here at the Cromford Report, we only deal with facts and figures, not beliefs, so here is the market update.
Sales – We are currently recording 9,814 sales in May. This is up 3.5% over April and up 10% over May 2010. This is a very strong sales total because in May 2011 sales are not being boosted by the government bribe (sorry, tax credit) that applied in 2010 for buyers of owner-occupied homes.
Pending Sales – At 13,268 on June 1, pending sales are down 0.4% compared with May 1 but up 6.7% compared with June 1, 2010. Again an extremely strong indicator of demand. In 2010 demand fell sharply during the summer after the tax credit expired, but there is no sign so far that the same will happen in 2011.
Active Listings – At 31,346 on June 1, active listings are 9.4% below May 1 and 23.3% below June 1, 2010. Supply is clearly falling fast. However this understates the situation because a large proportion of the active listings already have a contract against them. In fact there were 7,737 AWC (active with contingent contract) listings as of June 1, 2.6% higher than the very high level we saw on June 1, 2010. If we exclude these AWC listings, we have only 23,609 active listings, down 12.7% in a month and down 28.8% compared with last year. This is almost 60% down from the peak of October 2007.
Supply Versus Demand
The average months supply (active listings divided by monthly sales rate) for
the period Jan 1, 2001 to June 1, 2011 is 5.9 months. Right now we have a 3.2
month supply. Yet we read everywhere that there is a “glut of foreclosed home on the market”. What we are reading may have been true in November
last year. It is not true now. In fact available supply is really even tighter than this. If we only count active listings that don’t have a contract the months supply number drops to just 2.4 months. Anyone who thinks this is a “glut” is not living in the real world. They should just ask anyone who is actually trying to buy a home right now. Competition is intense, and not just for bank-owned homes and trustee sales. It is also heating up for short sales and normal listings. If you are trying to buy a home that is at all desirable and is priced at market or below, expect multiple bids. If you are a seller, then you only need to price realistically and your home well sell quickly.
(All the above numeric information is for “all
areas & types” within ARMLS.)
Records Being Set
In Maricopa County, May saw the largest ever number of distressed homes disappear from inventory. Pending foreclosures fell by 3,394 homes while REO inventory fell by 971 residential properties.
For Maricopa County, May gave us the highest ever percentage of out-of-state buyers. 29.9% of sales went to non-Arizona residents. The average between January 1999 and May 2011 was 11.9%. The absolute count was also a record – 2,648 homes sold to out-of-state buyers. The average since Jan 1999 is 1,446.
For Maricopa County, May saw the highest ever number of foreclosures selling direct to third parties at the courthouse steps. The record set was 1,476, 33% of all the trustee sales.
Paradise Valley
Exceptionally strong market activity is occurring in Paradise Valley where sales are now averaging 52 per month compared with 31 last year at this time. Inventory is down to 319 from a peak of 581 in April 2009 when sales were averaging only 9 per month.
Prices
After a bump upwards between mid April and mid May, average sales price per sq. ft. is back down a little at the beginning of June. Although we are still some 2% to 3% above the market bottom in January and February this year, in most places prices have not yet responded to the huge changes in supply and demand. Why not? Please refer to what happened in 2005, but with everything upside down. The rules of supply and demand have not been lifted. Of course, you don’t have to believe me, but please don’t say I didn’t
warn you.
Every single city is showing a negative trend comparing last year with this year. However the picture is much more mixed when we compare this quarter with the one before it.
We can draw the following conclusions:
The recent $/SF trend is positive in cities with more expensive housing (over $70 per sq. ft), including Fountain Hills, Rio Verde, Carefree, Gold Canyon, New River, Tempe, Goodyear, Phoenix, Anthem, Paradise Valley, Litchfield Park, Scottsdale, Sun Lakes, Chandler.
Exceptions are Mesa, Gilbert, Peoria, Cave Creek and Sun City West, which are over $70 but still declining, if only slightly in some cases.
The recent $/SF tend is negative in cities with the cheapest housing (under $70 per sq. ft.) including Wittmann, Florence, Youngtown, Apache Junction, Arizona City, Avondale, Buckeye, Queen Creek, Tolleson, Waddell, Glendale, El Mirage, Maricopa, Sun City.
Exceptions are Surprise, Laveen, Casa Grande and Coolidge, where prices have risen since a quarter ago.
Contrasting Apache Junction with Gold Canyon, or Avondale with Litchfield Park, we can see that the recent pricing trend is significantly more positive in the higher priced neighboring city, despite huge falls in supply in the lower priced city.
Because the large cities Phoenix and Scottsdale dominate the market in dollar terms, their positive pricing trend is causing the overall market pricing trend to move higher. However, there are still a significant number of areas where sale pricing has yet to show a turn round. This includes major cities such as Mesa, Peoria and Gilbert.
The areas with the most negative pricing trend are either on the outer fringes, which get less attractive as gas prices rise (e.g. Buckeye, Florence, Wittmann, Apache Junction, Arizona City, Queen Creek, Cave Creek), or in the west valley where foreclosures have hit a larger percentage of the housing stock (e.g. Tolleson, Youngtown, Avondale).
Golf-oriented areas and cities that appeal to affluent retirees are tending to show the most positive trends in recent months, including Fountain Hills, Rio Verde, Carefree and Gold Canyon.
Anthem has the least negative annual price change (-1.7%), which reflects its unusually low supply level (currently only 1.8 months supply and 84 days inventory). Rio Verde and Paradise Valley are close behind with -2.2% and -2.6%. However Rio Verde still has an abundant supply while Paradise Valley’s active listings are at the lowest level since November 2007.
The greatest fall in pricing over the year is found in Youngtown (-18.1%), El Mirage (-17.1%), Tolleson (-16.3%) and Laveen (-15.7%) all cities which have suffered extremely high foreclosure rates between 2008 and 2010. The city of Maricopa is also down -15.5% over the year and has suffered a similar high foreclosure rate. However the foreclosure rates for all these areas are down a great deal from the peak of 2009.
The Cromford Report-Pricing Trends by Market Segment
Source: The Cromford Report because the information is too good not to pass on!
Ironwood Vistas, Chandler, AZ
If you’re looking for a gated property in south Chandler, Ironwood Vistas is a gorgeous little community located off of Arizona Avenue and Wood Drive, (just south of Chandler Heights Blvd). Built by Maracay Homes from 2000-2002, this very well maintained community has only 199 lots with 131 1-story and 68 2-story homes that includes a community pool however 59 of the homes do have private pools. Ironwood Vistas is located close to Intel, Hamilton High School and several public golf courses including Bear Creek, Ironwood, Oakwood and Ocotillo as well as all the restaurants and shopping that Chandler has to offer. Zip code 85248 consistently has the highest price per square foot, highest average sales price and highest median price compared to all other Chandler zip codes.
There are only 5 active listings in Ironwood Vistas with pricing ranging from $155,000 to $222,000 ($79-104 per square foot) and square footage from 1,603 to 2,540. There are currently 6 pending transactions of which 3 are short sales. Those are priced from $114,000 to $275,000 ($79-101 psf) with square footages of 1,131 to 3,237. Within the past 5 months there were 3 closings ranging from $145,900 to $218,000 ($79-$94 psf) and square footage of 1,603 to 2,678. The closed properties are averaging 99% of list price. In case you hadn’t noticed, our inventory is shrinking and with interest rates still historically low, this is a great time to buy!
If you’re thinking of making a move whether buying or selling, why not check out Ironwood Vistas and then give me a call.
Stephanie Weiss, REALTOR® 480.273.7472
Stephanie Weiss Moves
Don’t Believe the “Doom and Gloom” on Housing
For the first time since November 2005, the Cromford Supply Index™ has fallen below 100.
What does this mean? – It means that the supply of active listings for sale is now slightly lower than in a normal market. So the “glut of homes on the market” that we keep reading about in the news no longer exists.
If the index falls below 90 sometime in the next several weeks then we can conclude that supply has fallen well below normal and we will then have a shortage of homes on the market, That is not unlikely given how quickly supply has fallen since November 2010. The drop from 110 to below 100 took less than 6 weeks.
If we include Active with Contingent Contract (AWC) listings in our counts then the following changes have occurred since November 21:
All Areas & Types – down 30.1%
Greater Phoenix, all types – down 31.1%
Greater Phoenix, single family detached – down 31.4%
Greater Phoenix, townhouse – down 31.7%
Greater Phoenix, apartment style – down 32.2%
Greater Phoenix, mobile home – down 18.0%
The figures are even more startling if we exclude the AWC listings:
All Areas & Types – down 39.2%
Greater Phoenix, all types – down 40.7%
Greater Phoenix, single family detached – down 41.8%
Greater Phoenix, townhouse – down 41.7%
Greater Phoenix, apartment style – down 37.4%
Greater Phoenix, mobile home – down 20.2%
Market pricing has not yet reacted to this change in the balance between supply and demand. Pricing is always a trailing signal.
Source: The Cromford Report May 30, 2011
Stephanie Weiss Moves (480) 273.7472
Seville Golf and Country Club, Gilbert, AZ
If you’re looking for a top of the line premier golf course and country club community in Gilbert, check out the Seville Golf & Country Club located between Chandler Heights Blvd and Riggs Road on the north and south and Higley and Power roads on the east and west.
This gorgeous master planned community built by Shea Homes from 2001 to current, has a Tuscan style architecture throughout the entire community with lots of water features, orange groves and views of the San Tan mountains. Seville has something for everyone, from starter to custom luxury homes! The amenities at Seville Golf
& Country Club, owned by ClubCorp, the largest owner of private clubs in the world include golf, tennis, swimming at the gorgeous olympic size pool, dining, a fitness center and spa.
Seville Golf & Country Club has 3 types of non-equity, private club memberships, two of which include unlimited golf and use of the practice facility/driving range. There are no assessments or food and beverage minimums. Contact Ryan Barmore, Membership Director at (480) 279.3040 Seville Golf & Country Club for more detailed information about memberships.
There are 47 active listings ranging in pricing from $100,000 to $750,000 and square footage of 1,628 to 4,590. There are currently 61 pending transactions of which 18 are short sales. Within the past 3 months there were 52 closings ranging from $97,000 to $1,300,000 and square footage of 1,421 to 7,486. The closings breakdown to 40% cash transactions, 40% loans with conventional financing and 20% with FHA financing. These closings averaged 99% of list price and $93 per square foot.
If you’re thinking of making a move whether buying or selling, why not check out Seville Golf & Country Club and then give me a call.
Stephanie Weiss, REALTOR®
480.273.7472 Stephanie Weiss Moves
