Phoenix Metro Market Report – February 2012

As a Realtor living and working in the Phoenix Metro Area  I am often asked what parts of the Valley are selling well? What areas are seeing price increases or decreases and where will buyers get the best deal: Lender Owned (REO), Short Sales (SS) or Traditional (Norm)?

Below is an example of research that I supply to buyers and sellers. It can be narrowed or expanded to meet the needs of the client. Here’s an overview of the entire Phoenix Metro Market between December 30th 2011 and January 30th 2012.

This is longer and more detailed than my normal “matrix at a glance” market report, so you might want to pour your favorite beverage and find a comfortable chair. Let’s get busy.

Total Sales fell 17.7 percent from December 2011 to January 2012 however historically December to January sales have fallen 17.9% each year for the past 11 years so the valley is off to a typical seasonal start to a new year.

New Inventory increased 34% in January with 9,833 new listing added to the market. However, over the last 10 years December  to January New Inventory has risen by more than 60% so this month is less than typical.

Although there was a rise in New Inventory of 34 % Total Inventory only increased 1.3% in January. Total Inventory has remained almost level, (fluctuating between 24,000 and 28,000) from July 2011 to January 2012. This seven month leveling of New Inventory mirrors the Valley’s last “Normal” market in 2004.

Months Supply of Inventory increased slightly to 3.88 in January over December’s 3.15 but the total Valley market remains under 4 months and is considered to be a seller’s market. However, it should be noted that some of the most popular communities in the valley have less than 2 months of inventory.

The New Median List Price rose 7.8% to $140,000 and the Average New List Price increased by 21.5% to $243,200. While these prices are still substantially lower than those of 2005 and 2006 they are significantly higher than 2010 and 2011. And while higher List Prices don’t always translate into higher sales prices January Sales Prices followed the new listing prices.

Average sales prices rose 3.3% to $167,500 and median sales prices  rose 2.6% to $120,000. These price levels haven’t been seen since the second quarter of 2010.

Foreclosures Pending continued to decline dropping from 40,000 in February 2011 to 20,000 in December 2011 to 18,287 in January 2012 if the decline continue at it’s current rate we could see foreclosures pending fall below 10,000 by June 2012.

Distressed Properties reached a high of 74.1% of total sales in September of 2010. November 2011 saw Distressed Sales fall below 60% of total sales and in January 2012 Distressed Sales dropped to 57.7% of total sales. Short sales passed foreclosures in December 2011 and again in January 2012 with a total of 1925 short sales to 1,801 foreclosures.

Average Days On Market has been on a steady decline for all of 2011 with a slight uptick in December but fell by 4 days in January 2012.

This all sounds like good news, however, “All Real Estate Is Local” and that is particularly true in the Phoenix Metro Market. Phoenix is made up of many individual communities all of which need to be evaluated individually before buying or selling a property, this is best accomplished with the help of an experienced REALTOR®.

Having said that there are things we can learn by looking at the big picture, for example, the overall health of the market, and overall the news is good.

  • All four pricing metrics are up with the largest gain in average new list price up 21.5%.
  • Foreclosures continue to decline and from February to December Foreclosures dropped by 50%.
  • Short Sales passed Foreclosures in total numbers, the first time that has happened since the bubble.
  • The Census Bureau estimates a positive net migration of 23,000 for the Phoenix Metro Area.
  • And finally U of A’s EB Eller College of Management reported that Phoenix Metro unemployment rate has dropped to 7.85%.

So what does this news mean to buyers and sellers?

If you are thinking of buying a home in the next 6 months do it now. Prices will be going up and interest rates have no where to go except up. This is one of those years people will be talking about in the future. “Remember 2012, wish I’d bought back then”.

If you are thinking of selling your home in the next 6 months list it now. Inventory is low so there will be more potential buyers for your home.  Work with an experienced REALTOR® to price your home correctly and it will sell quickly.

Whether you’re buying or selling I offer a free, no obligation, consultation. As an informed buyer or seller you’ll make better decisions. Call me today at (602) 793-1627.