Metro Phoenix home prices are expected to continue climbing during the next few years.
Housing analysts agree that demand for homes in the region is strong, and many don’t appear to be concerned about prices rising too fast and shutting the door on regular homebuyers or investors.
Several experts are looking for metro Phoenix home prices to climb more than 10 percent annually during the next three years.
“We think Phoenix home prices will appreciate 12 percent in 2013, 12 percent in 2014 and 10 percent in 2015,” said national housing analyst John Burns of Los Angeles.
He said the price increases will be driven by “boomerang” buyers who purchase after waiting three years — as required under new credit standards — following a foreclosure or short sale.
“Our major assumption is continued strong economic growth (for Phoenix) and low mortgage rates,” said Burns of John Burns Real Estate Consulting.
The Phoenix area’s median home price has jumped by 35 percent during the past year, boosting the number of sales by homeowners who are not facing foreclosure or a distressed sale. The price gains in recent months have been smaller than earlier this year.
Matt Widdows, CEO of HomeSmart, Arizona’s largest residential-real-estate brokerage, is also bullish on a further rebound in home prices.
“I would say that in the next five to seven years, we will see (home) prices back to levels we saw in 2005,” he said. “Many (Phoenix-area) homes dropped to one-third of their value in 2005, and I have no doubt that we will be right back to those levels.”
These might sound like aggressive forecasts, but even Arizona economist Elliott Pollack, whose forecasts are often conservative, recently projected Phoenix-area home prices would climb 50 percent by 2015-16.
Metro Phoenix’s median home price is currently $150,000, so it would have to increase at least 11 percent annually over the next four years to reach $225,000, a 50 percent increase.
In May 2005, the median existing-home price in metro Phoenix was $228,000.
Other analysts aren’t as bullish.
Mike Orr, an analyst with the W.P. Carey School of Business at Arizona State University, tracks home sales daily but never forecasts home prices more than a month out.
“At the moment, pricing pressure is upwards, but there is always the potential for prices to dip,” he said. His monthly report on prices is due out this week.
An unknown for the housing market is what the handful of large investors who are buying thousands of homes in metro Phoenix plan to do with them.
If they decide to sell around the same time, the supply of homes could jump, dampening prices.
That’s unlikely to happen, at least in the short term, industry experts say.
“We wouldn’t sell now,” said Justin Chang, a principal with one of the biggest residential investors in the country, Los Angeles-based Colony Capital. “We think (Phoenix) home prices will recover more.”
He said the company wants to create a real-estate investment trust next year and put its metro Phoenix rental homes in the trust, then sell shares to individual investors.
Mark Stark, CEO of Prudential Arizona Properties, believes the increase in home prices has slowed and the market has steadied.
“If additional price increases do happen, I feel they will be gradual,” Stark said. “We’re not looking at any dramatic pricing changes.”
Homebuilding in metro Phoenix was a dominant factor in the housing market until the crash. Many buyers once again are opting for new homes so they don’t have to compete in bidding wars for inexpensive existing houses.
New-home building has more than doubled this year, and the price of new houses is climbing.
“We originally forecast 10,000 permits for new homes this year, but we are going to go well past 11,000,” said Greg Burger, co-publisher of the Phoenix Housing Market Letter.
He said he expects the trend of rising new-home prices to continue for the next few years. The median price for a new Phoenix-area home is $222,000.
“Buyers waiting for the bottom of the market missed out months ago,” Orr said.
Source: The Arizona Republic, 10/28/2012
Yesterday, Michael Orr at the W.P. Carey School of Business released his July 2012 Greater Phoenix Housing Report, which includes data from Maricopa and Pinal Counties.
The market continues to evolve and certain trends are clear. In the Greater Phoenix real estate market, we’re seeing increased investor activity (especially in the lower-priced outlying areas), fewer foreclosure completions, more short sales, rising prices (despite a tiny drop between June-July 2012), and continued tight supply.
Here are some of the more interesting highlights:
- Priced dipped slightly in both the single family and multi-family segments between June and July (Avg sales price down $6,000/Median down $1,000)
- Compared to July 2011, median prices are up 31% for single family homes and 17% for Phoenix area condos/townhouses
- Distressed inventory supply (short sales, foreclosures) is down 69% year-over-year
- Total supply of Phoenix real estate is down 26%
- New home sales in the Greater Phoenix area are up 58%
- “Normal” resales are up 68%
- Single family unit sales were down about 7.5% in July 2011 vs July 2012 (likely due to limited supply)
I want to make a comment about inventory supply. In the world of economics, most agree that an unemployment rate of around 4% is considered “full employment,” because there’s a certain number of people at any given time who will never work because they don’t want to or face some condition that prevents them from doing so.
I believe the housing market has a similar dynamic. I don’t pretend to know what a “zero housing level” looks like, I do believe there are a certain number of properties that will always be for sale. The specific properties themselves will change, but at any given time X percentage of “available” inventory is considered unsellable. Location, property condition, defects in title, silent marketing, unrealistic seller expectations, Realtors who neglect to update listing status in the MLS, etc., can all contribute to this condition.
I don’t see any options to change this dynamic because it’s tough (impossible?) to isolate the properties that fall into this category, but the implication to real estate buyers (and sellers!) is that your true competition is greater (or less, for sellers) than the inventory numbers might imply. When Phoenix real estate inventory dips to 10,000, perhaps 10% of that number is actually unsellable…
When it rains, it pours.
Though I’m not featured as prominently (or with a photo!) as I was in my recent interview with the Phoenix Business Journal, I was contacted out of the blue by The Globe and Mail (Toronto, ON) to comment on rising investor participation in the Greater Phoenix real estate market. Pleasant surprises like this are uncommon and I am privileged by the opportunity. I do not advertise in either publication, so this was truly “earned media coverage.”
Read the full article here or below. They saved the best comments for last… 😉
In hard-hit cities like Phoenix, the home market rises
Foreclosures are down and bidding wars are back as U.S. real estate begins to bounce back in areas like Arizona, Miami and southern California
The Phoenix real estate market is suddenly experiencing something it hasn’t seen in years: Bidding wars.
Phoenix used to represent just about the worst of the U.S. housing market, with suburbs full of empty homes and foreclosures running so high that investors gathered like vultures at the county courthouse to snap up distressed properties.
But like its namesake, Phoenix’s housing market is rising. Foreclosures have dropped 20 per cent in the past year and the median house price has climbed about 25 per cent, making the city one of the hottest real estate markets in the U.S. But perhaps the most telling sign of a recovery is the return of heated bidding that has been a long time coming for agents like Maureen Porter.
“A good house in a good neighbourhood will go on the market for two days and they’ll already have five or 10 offers,” Ms. Porter said. “When I started my business [four years ago]there were around 56,000 homes for sale in Maricopa County [which includes Phoenix] Now there’s about 12,000 homes for sale.”
Ms. Porter said she recently took two clients from Vancouver to look at a 70-lot housing development in Goodyear, a community outside Phoenix.
“It was all dirt, there were maybe two homes built,” Ms. Porter recalled. “We walked into the presentation centre and everything but two lots were sold out.”
The housing market is showing signs of life across the U.S., with existing home sales and the median price up about 10 per cent year-over-year, hitting levels not seen since the summer of 2010. Sales and prices have been rising steadily for months, proof that the long-suffering real estate sector may have finally turned the corner. Buyers are returning thanks to an improved employment picture, record-low mortgage rates and near-bottom prices.
Housing is a critical component to the U.S. economy and improvements in the sector usually lead to a boost in consumer confidence, employment and spending. All of which is good news for the Canadian economy, as well.
The real impact of the recovery can be seen in places like Phoenix, Miami and southern California, which were among the hardest hit during the recession. The supply of homes for sale has dropped in all three locations as banks move quickly to unload troubled properties, often through “short sales” where mortgage holders get permission from lenders to sell their property for less than the amount owed. Banks often prefer short sales to foreclosures because they are a faster way to deal with borrowers.
In Miami, the median price is up 15 per cent from a year ago and the occupancy rates in downtown condominiums is 94 per cent. Southern California has a four-month supply of homes for sale, roughly two months less than what is considered a healthy market, and foreclosure sales have reached a four-year low.
Phoenix offers some of the most dramatic evidence of the turnaround. This is a city where house prices fell by up to 50 per cent during the recession and people walked away from their homes in droves, leaving vast stretches of empty neighbourhoods. Today the number of homes listed for sale has dropped by 64 per cent in the last year and foreclosures have fallen by 20 per cent. The market has tightened up so much that prices are jumping 5 per cent each month and buyers are competing fiercely for just about anything that’s available.
“We’ve now got a fully fledged buying frenzy going on while people try to buy something before they miss the boat,” said Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University.
Last week there were roughly 12,000 homes listed for sale across the city. That compared to more than 50,000 around the same time last year.
Despite the current boom, the market still has a long way to go. The median price is now about $135,000 (U.S.). That’s still well below the peak in 2006, when it reached $265,000, and it puts prices at about the same level as in 2000. And although the number of existing homes sold in April across the country rose to an annualized rate of 4.6 million, economists say a healthy U.S. housing market would see almost 6 million sales of existing homes a year.
Much of the activity is also being driven by outsiders, many from Canada, eager to snap up investments. In Phoenix, the number of “investor flips,” people who buy houses and then re-sell them quickly for a profit, has increased 31 per cent year-over-year, according to Mr. Orr.
But with prices rising quickly, good deals are harder to find. Three years ago, dozens of investors lined the steps of the courthouse in downtown Phoenix to bid on foreclosed properties, many going for well below $100,000. This week only a handful of bidders showed up for the auction and just four houses sold.
“The days of getting a property under $125,000 are slim to nil,” said Diane Olson, a real estate agent who caters largely to Canadians.
The question for many agents like Justin Lombard is whether this is a blip or a real recovery. He is cautiously optimistic.
“We’ve seen such steady progress in the way of inventory absorption that I’d be really surprised if we took a big backward step,” he said. “We hit bottom a long time ago. It’s just that a lot of people didn’t realize it because our bottom was so bad.”
Every now and then I have a media opportunity that’s too exciting not to share.
Recently, I was interviewed by the Phoenix Business Journal, complete with photo op. The Phoenix Business Journal is the leading business publication in the state with wide readership and I do not advertise in the Journal, so this was a great honor. Unfortunately, full online access to the story is limited to subscribers, so I can only include the preview.
Investors returning to Phoenix housing market, driving prices up
Real estate investors and short-term flippers are back in town — for better or worse — and once again they’re dominating the housing market for sales of less than $250,000.
Investors are buying those homes with cash, which is pushing up prices in the long-downtrodden local market, tightening inventories and squeezing out traditional home buyers.
Justin Lombard, owner of Stone House Realty of Arizona, says cash sales are starting to dominate the local housing market, preventing many buyers from finding homes.
“It’s very much like 2005 all over again at the entry-level segment,” said Justin Lombard, owner of Stone House Realty of Arizona in Phoenix.
Lombard said cash sales are starting to dominate the market for less expensive homes, as some sellers are looking specifically for …
Only subscribers can read the remainder of the article…click here if you’re a subscriber.
There are few absolute certainties when it comes to Phoenix real estate, and the debate about the so-called “shadow inventory” is no exception. If you’re not aware of that term, it refers to real estate that the banks have already acquired via foreclosure and are holding onto for the perfect moment to dump them back on the market.
Many real estate aficionados believe that the shadow inventory is not only going to quell our current market recovery, but is actually going to lead to a double-dip housing bust.
The truth will only be borne out in time, as it is impossible to accurately determine numbers of properties being held across all the different lending institutions, as well as the status of negotiations with existing homeowners in default.
A number of details seem to indicate that the Phoenix area housing market won’t be subject to a shadow inventory effect.
- Mike Orr, real estate analyst at ASU’s W.P. Carey School of Business, recently reported, “There is still no sign of any significant new supply of homes coming onto the market, and those who anticipate a flood of bank-owned ‘shadow inventory’ are likely to be very disappointed.“
- The Mortgage Bankers’ Association reported last week that Arizona’s mortgage delinquency rate fell from 6.5% to 6.2% since the start of 2012, placing Arizona 35th in the nation in delinquency rates.
- Filing of Notices of Trustee Sales in Maricopa County fell again to 3,219 in July 2012. It was 4,328 in May and 3,711 in June.
- Bank owned sales as a percentage of total monthly sales has also fallen steadily, despite a very tight inventory supply. Here’s a graphic from R.L. Brown Reports that illustrates the trend:
At the moment, most indicators point towards the fact that there will not be a shadow inventory dump in the Greater Phoenix housing market, but only time will tell. If the banks are holding significant inventory, with a 25% rise in the median sales price in the last 12 months and continued tight inventory levels, now would be a good time to start selling it off.
What do you think? Are we going to see a shadow inventory release in the upcoming months?
This article from FoxNews.com highlights one of the main attractions to the Greater Phoenix area real estate market — even as our supply dwindles, prices remain low relative to “the boom years” of the mid-2000’s. For those who qualify for financing, interest rates remain close to all-time lows. Neither of these dynamics will last forever.
Here’s the article:
It’s hard to make any firm categorical statements about today’s economy, but recent data and anecdotal evidence suggests that the battered housing market is finally on the rebound.
Homeowners, if they’re still fortunate to own a home through the past few years, have endured precipitous drops in valuation, and many still have homes that are worth less than what is owed to the bank. Nonetheless, in places across the country there’s evidence that prices are on the rise.
Analysts report that historically low interests rates, foreign investors and natural market forces are driving home prices back up. This week’s report by S&P/Case-Shiller showing prices in the nation’s largest metropolitan areas up by 2.2 percent gives credence to the sense that at least in some places the housing market is on an upward trend.
After delaying her retirement by a year because of the economy, Sheri Gingerich is now a new homeowner in one of the hottest places in the country–Phoenix. The housing market there is heating up, too.
“To find [a home] on a golf course that was affordable compared to five years ago was to me astronomically the exact thing that worked out to our benefit,” Gingerich said while taking a break from moving into her new home outside Phoenix. The Minnesota native paid $240,000 for the home far enough from the fairway–she hopes–not to attract wayward golf balls. She says the house would have cost considerably more a few years ago and that she wouldn’t have been able to afford it then. But now, the perfect retirement home fits perfectly into her budget.
Gingerich’s realtor says business really picked up at the start of the year and has kept on going strong even into the usually slow summer months. “Oh my God, it’s just been a really great experience the last couple of months with people coming in and really feeling like this is the time to buy,” Kathleen McMullen said. “So I think [buyers] attitudes are all upbeat and I think the economy is taking a shift and Phoenix is really coming back–bouncing back quickly.”
McMullen’s data shows homes that once were on the market for nearly a year are now selling in a month or two and that Gingerich is part of a trend. “Right now, the good news is, in the Phoenix area — all the cities around Phoenix — all of the home values have increased up to 3 percent. And in other places [too]. So, this is not a unique experience at all.”
The chief economist for the National Association of Realtors says while Phoenix may be a hotter market than other places it’s not too far out of line from the national picture. “The market is showing improving signs,” Lawrence Yun recently told Fox News. “We have seen the home sales rise roughly 10 percent higher this year compared to last year. And it looks to close out the year at a five-year high. So we are beginning to see a much improved condition after some tough years in the prior years.”
Yun attributes the rise in prices to an influx of buyers from overseas or investors with lots of cash who are able to buy homes as investments. Nonetheless, he added, “the first time buyer still comprise about one-third of the market. So you are seeing a very broad-based recovery. Everything from New England, Florida, middle America to the Western coast, the sales are improving.”
As for the rest of the year, Yun predicts a modest increase in home prices and bases that on historical trends of supply and demand about inventory.
“Historically, the supply and demand balance has been about a six month supply of inventory. Now in the past few years it’s been in the double digit months of inventory so there are too many sellers in relation to the buyers. Now the market is roughly in balance and historically when that is the case home values rise roughly three to five percent annually.”
This article from CBS News discusses the fact that the Phoenix real estate market is serving as a “beacon of hope” for other housing markets that were crushed by the real estate bubble. Much of the success of the Arizona housing market in rebounding so quickly is being credited to the streamlined non-judicial foreclosure process, which has helped the inventory absorption rate.
Here’s the article:
PHOENIX — The Phoenix metro housing market is seeing a rise in home prices and a decline in the number of houses on the market, putting the area ahead of most other U.S. cities on the road to recovery, according to real estate experts.
Economists say the upward trend in the Phoenix area may serve as a beacon of hope for other cities across the nation that suffered when the housing bubble burst.
“The Phoenix market will be a benchmark city to monitor for residents in Las Vegas, the Inland Empire of California and … the Florida market,” said Lawrence Yun, chief economist with the National Association of Realtors.
The median price for Phoenix-area homes in May was about 30 percent higher than it was the same time last year, according to a monthly report released by the W. P. Carey School of Business’s Center for Real Estate Theory and Practice at Arizona State University. The report also shows there are about half as many houses on the market as there were the same time last year.
The Phoenix area market was one of the hardest hit in the nation in terms of distressed properties, but the state’s foreclosure system allows it to work through the backlog more quickly than states in which foreclosures have to go through the judicial process. Banks and mortgage companies have the power in Arizona to foreclose homes without a judge’s approval.
Nevada’s foreclosure system is largely the same. Nasser Daneshvary, director of University of Nevada, Las Vegas’s Lied Institute for Real Estate Studies, said speedy foreclosures are healthy for the market. Too many foreclosures can sink home prices, as happened in both Phoenix and Las Vegas, but Daneshvary said a return to the depths experienced during the housing collapse isn’t likely in either city.
Arizona’s job market, with an unemployment rate that’s down to 8.2 percent from its March 2010 peak of 10.8 percent, is also a factor in real estate improvements. Yun said other areas that have sluggish job markets are likely to see slower real estate recoveries, with fewer people able to buy homes.
Michael Orr, director of the Center for Real Estate Theory and Practice at ASU’s Carey school, said dwindling housing inventory, coupled with prices that are still relatively low, means sellers now hold the power in the Phoenix-area market, and receive multiple offers, many of which come from investors who are looking to buy and rent out houses.
“Now we’ve got too few homes. Everybody’s wishing the investors would go away and stop buying, but the investors are still here buying everything they can with cash, which makes it pretty difficult for ordinary home buyers to compete,” Orr said.
Sandy and Luis Solis said they found that to be true. The couple, who moved from Los Angeles to Scottsdale last year, said the rapid decline in homes available in their price range made them feel hurried to buy. They made offers on three homes but were outbid by cash offers twice, the second time by an investor. They’re in the final stages of closing on a house in Phoenix.
“We were kind of losing hope that we were going to find the right home for us,” Sandy Solis said.
Las Vegas and some cities in California are seeing similar situations. Daneshvary said investors who buy housing for the purpose of renting are better for the market than others in the past who have purchased houses just to flip them. He said by the time investors stop buying, the market will be healthy enough to remain stable.
With houses in short supply, the construction industry will step in to fill the void. Orr said home building in the Phoenix area is slowly beginning to pick up, but it will likely be stifled by a shortage of construction workers in the state. He said Arizona has lost “80 to 90 percent of that skilled workforce” in the last six or seven years because workers have gone elsewhere or left the industry altogether.
Orr said the Phoenix-area’s home market recovery will likely level out over the next few months.
“I just don’t want people to think the next quarter is going to accelerate at the same rate,” Orr said. “That’s not likely to happen.”
That, Yun said, is a sign that the market will recover in a more healthy way.
In the long term, some city’s housing markets may end up in better shape than they were before the housing market crash. Yun said parts of Texas, Oklahoma, Nebraska and the Dakotas didn’t experience huge housing market losses but are benefiting from widespread improvements in economies.
Record tight inventories are making it increasingly difficult for growing numbers of buyers, who are creating multiple bid environments in markets that haven’t seen buyers battle over homes in six years.
Buyers are back but sellers aren’t, especially in Western markets recovering from large volumes of foreclosures. The result is that inventories are still tightening as the spring buying season ends. Buyers are fighting over what’s available, often to the benefit of those sellers who took a risk in this year’s evolving marketplace.
Prices are reported to be on the uptrend with 62 percent of Realtors reporting constant or increasing prices compared to the same time a year ago in the National Association of Realtors’ Realtor Confidence Index for May29 -June 8, 2012 that was released yesterday.
Buyer demand is reported to be growing faster than supply, and many Realtors are reporting multiple offers. However, buyer foot traffic slowed in May compared to last year, perhaps as buyers grew discouraged by slim pickings.
However, buyer traffic is still well above the moderate level, but seller traffic is flat, according to the NAR survey. First time home buyers accounted for 34 percent of total buyers. Normally first-time buyers are in the neighborhood of 40 percent of total residential sales, according to NAR’s Profile of Home Buyers and Sellers.
A majority of the 145 markets monitored by NAR Research experienced slower foot traffic in May of this year relative to the same time in 2011.
The data, provided by SentriLock, LLC., is based on the total number of visits to properties as recorded on electronic clock boxes. Foot traffic was lower over the 12 months ending in May in 60 percent of the markets, while 35 percent expanded and 5 percent were unchanged.
This moderating pattern suggests a broad based decline in the late spring following an equally broad-based expansion in the last spring/summer of 2011 and early spring of this year
Multiple bids are changing the playing field in a number of markets this spring and summer. Many agents new to the business who have little experience with them are dealing with a sudden and unexpected competition for homes brought about by inventors more than 20 percent below those of a year ago.
“Remember the “Roaring 90’s”….. Those days when you could list your house on Friday and on Saturday people would be parked in your driveway writing offers and good faith checks on the hood of their cars? Multiple offers were the norm and offered sellers a generous selection of offers from which to choose.
Believe it or not we are experiencing a trend toward multiple offers even in this still difficult market and there is evidence that this trend will continue as buyers compete in a market with limited inventory,” reported Realtor Noel Crider of Auburn, CA on the Active Rain blog.
“The Phoenix Metro Area Housing Market faces multiple offers even in the higher end and luxury market as buyers try to snag homes before the market rises further. We have seen multiple offers for quite some time in the lower price ranges, but now as the market is returning, and returning strong, we are seeing multiple offers in the higher price ranges. We are now seeing multiple offers on homes in the move up and luxury home market. We are seeing offers that are $50,000 over asking that are not the winning bid. This is causing quite a bit of frustration as buyers are trying to get into a home before the market prices go up further,” reported Brenda & Ron Cunningham of Phoenix Metro Homes for Sale.
In Seattle, multiple offers on beginner houses in Seattle are common again reports Phil Leng of Kirkland, WA and in Austin, broker Gwynn Teal Carpenter reports, “It’s happened again! We are in one of those real estate markets where we are seeing homes with multiple offers. In Austin Texas, the market is so sizzling hot that it isn’t unusual to have more than 2 offers on a fantastic priced and conditioned home.
Even in Tulsa, a market that experienced neither the housing boom nor the bust, buyers are “scratching their heads because a Tulsa home for sale with which they fell in love wound up in a multiple offer situation – while we are in a Buyer’s market!!! How could this happen?? Any area with more than a six month inventory of homes for sale is considered to be a buyer’s market. But, just as the prettier girls get asked to dance before the less attractive gals, the same goes with Tulsa homes for sale. The more attractive and updated homes will receive offers quickly, while the less attractive homes will remain on the market,” said Lori Cain or Midtown Tulsa Real Estate.
Source: Steve Cook, Real Estate Economy Watch
This article from Bloomberg today reports that the Phoenix real estate market was up 2.3% from March to April 2012, which was the highest reported. Is the Phoenix residential real estate market in recovery? With month after month of price gains and inventory drops, I personally believe we are. With 5-6 more months of similar trends under our belt, it will be official.
Interested in detailed Phoenix real estate market statistics? Check here: https://www.trust-in-justin.com/phoenix-real-estate-update-062112/
Here’s the article from Bloomberg:
Home Prices In U.S. Cities Fall At Slowest Pace Since ’10
Residential real estate prices fell in April at the slowest pace in more than a year, adding to signs the U.S. housing market was firming.
The S&P/Case-Shiller index of property values in 20 cities dropped 1.9 percent in April from the same month in 2011, the smallest decline since November 2010, after decreasing 2.6 percent in the year ended March, the group said today in New York. The median forecast of 28 economists in a Bloomberg News survey projected a 2.5 percent drop.
A turnaround in prices is a necessary step toward luring more buyers and sustaining demand for housing, which is starting to stabilize after precipitating the last recession almost five years ago. Record-low borrowing costs, due in part to Federal Reserve efforts to hold down long-term rates, may keep promoting home sales in the presence of an 8.2 percent unemployment rate.
“Housing has picked up since the middle of last year,” saidRyan Wang, an economist at HSBC Securities USA Inc. in New York, who correctly forecast the monthly gain in prices. “Sales have improved and the inventory of homes for sale has been falling, which has brought a bit more balance into the market and fed into a bit of stabilization of prices.”
Estimates in the Bloomberg survey ranged from declines of 1.7 percent to 3.1 percent. The Case-Shiller index is based on a three-month average, which means the April data was influenced by transactions in March and February.
Another report showed consumer confidence in June fell to a five-month low as Americans became less sanguine about the outlook for jobs and incomes. The Conference Board’s indexdropped to 62 from a revised 64.4 in the prior month.
Stocks fluctuated after yesterday’s selloff in global equities. The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,314.52 at 11:37 a.m. in New York.
Home prices adjusted for seasonal variations climbed 0.7 percent in April, matching the prior month’s gain, which was revised up from a previously reported 0.1 percent increase. It was the best back-to-back gain since mid 2009. Unadjusted prices increased 1.3 percent in April as 19 of 20 cities showed gains.
Phoenix showed the biggest adjusted monthly increase, with prices rising 2.3 percent from March. Detroit showed the biggest decrease at 2.1 percent.
The year-over-year gauge provides better indications of trends in prices, according to the S&P/Case-Shiller group. The panel includes Karl Case and Robert Shiller, the economists who created the index.
Ten of the 20 cities in the index showed a year-over-year decline, led by a 17 percent drop in Atlanta, the only city to show a double-digit decrease.
Phoenix showed the biggest year-over-year increase, with prices rising 8.6 percent in the 12 months to April.
“We finally saw some rising home prices,” David Blitzer, chairman of the S&P index committee, said in a statement. “While one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign.”
Prices may be on an upward trajectory as the glut of unsold houses that went on the market after the recession shrinks. There were 2.49 million existing homes for sale in May, down from an average supply of 2.93 million in 2011 and 3.22 million in 2010, data from the National Association of Realtors show.
The same NAR report indicated the median price of an existing home climbed 7.9 percent to $182,600 last month, the highest since June 2010, from $169,300 in May 2011.
“Nobody feels like prices are going down anymore,” Larry Nicholson, president and chief executive officer of homebuilder Ryland Group Inc. (RYL), said during a June 13 investor conference. “Everything we see now would tell us the second half of the year will be better than last year. We’re seeing the quality of the traffic pick up. We’re seeing new traffic. The business has gotten better and moving back towards a normalized process.”
Even so, Federal Reserve Chairman Ben S. Bernanke said last week the economy wasn’t getting a typical boost from a real estate recovery. To spur faster economic growth and more activity in housing, the central bank announced last week it would buy securities to extend the maturities of assets on its balance sheet, thereby lowering longer-term interest rates.
Greater Phoenix Real Estate Update – June 21, 2012
The following stats are sourced from the Arizona Regional Multiple Listing Service (ARMLS) as of 6/21/12.
The data includes Greater Phoenix residential properties (houses, patio homes, town homes, and patio homes). It excludes land, new construction, multi-family properties (2+ units), commercial properties, mobile homes, and timeshares.
The search area covers a 40-mile radius centered downtown on Phoenix Sky Harbor Airport, creating a circle with an 80-mile diameter.
The red number in “(brackets)” represents the results from the last report that I posted to this blog. It’s important to note that the bracketed numbers will reflect Phoenix and Scottsdale real estate data from 1-3 weeks prior, depending on the frequency of my postings. To help interpret the significance of the changes relative to time, I’ve added a field at the top that indicates the number of days since the last status update.
This reporting period covers the past 16 days. Since last reporting, we’re seeing a small bump in available inventory, but just a small bump (just over 1%). After several months of declining inventory, this is a welcome sign. Hopefully we’ll continue to see the number rise to a historically-healthy inventory level in the mid-20,000’s of units. One report does not constitute a trend, so time will tell.
During the last reporting period (end of early May into June), the average sales price of Phoenix real estate rose less than 1%. This 16 day reporting period shows an increase of 2.32%. Still a lower growth than we have seen in previous sessions.
The median price of Phoenix real estate held steady this period.
Is the Phoenix real estate market leveling out again? Are we starting to shift back to a more balanced market? Stay tuned for future updates…
Days since last stats update posting: 16
Total Active Inventory: 10,133 units (9,914)
Single Family Homes: 8,354 units (8,152)
Patio Homes: 190 units (189)
Condos/Town Homes/Other: 1,589 units (1,570)
Total AWC/Pending Inventory: 18,726 units (18,763)
Single Family Homes: 16,505 units (16,544)
Patio Homes: 197 units (207)
Condos/Town Homes/Other: 2,024 units (2,012)
Trailing 30-Day Sales Data
Total Sales: 8,054 units (7,712)
Single Family Homes: 6,997 units (6,631)
Patio Homes: 106 units (106)
Condos/Town Homes/Other: 951 units (975)
Average Sales Price (sold properties): $210,986 ($206,209)
Median Sales Price (sold properties): $150,000 ($149,900)
While our market is showing definitive signs of strengthening and competition for properties is fierce, it’s always possible to find great opportunities with the right Realtor on your side. For help with your search, call or email me directly.
If you have any questions about these stats or about the Greater Phoenix real estate market in general, feel free to post them below.