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July 2006 MLS Listings and Sales Stats

August 5, 2006 By Jay Thompson

Homes (Data includes Single Family Homes, condo/Townhomes, 2 – 4plex, mobile/mfg and timeshares):

As of August 5, 2006 at 5:51pm:

Current Active Listings: 46,346 (39,086 SFH’s)
Active With Contingencies (AWC): 923 (what does AWC mean?)
Pending: 6,348
Sold (July 1, 2006 – July 31, 2006): 6,103
Sold (June 1, 2006 – June 30, 2006): 7,212

Land:
Active: 9,930
AWC: 45
Pending: 377
Sold (July 1 – July 31): 327

Most expensive current listing: $15,000,000. Nine bedroom, 13 baths, 18,000 square feet in Paradise Valley.

Number of homes listed over $1,000,000 = 2,316
Number of homes listed over $10,000,000 = 12

For more Phoenix Home Sales stats visit the Statistics Page at http://www.ThompsonsRealty.com

Data is extracted from the Arizona Regional MLS (ARMLS) and compiled by yours truly

The Law of Gravity Trumps Speculation

August 1, 2006 By Jay Thompson

Jay’s Opine: Sorry, I haven’t had time to really disect this latest one from the Republic. I see it’s actually time-stamped as being released 26 minutes from now, which seems kinda odd… So here at The Phoenix Real Estate Guy you can actually get some news stories before they are even written. I’ve been trying to tell you people how amazing this blog is!

Last year we sold home houses to investors site unseen, much like the article mentions. Investors are a big reason there are now over 46,000 homes in the MLS, as opposed to 4,000 in January 2005. More on that later (and July stats are coming SOON, I promise!). I’ve just been insanely busy lately. I apologize to those avid readers who come here to find something new. I’ve neglected you lately.

So here’s a tidbit from the Republic. Not my favorite paper, by a LONG shot. But at least they are good for the occasional gem like, “Buyers need to do their homework before entering into a contract for a new house. ” Well duh. I believe 90% of the population has enough sense to know that. OK, 70%. Regardless of the dumbing down of a lot of the Republic’s articles, they do at least offer some local insight…

The law of gravity trumps speculation
(article link)
Aug. 2, 2006 12:00 AM

News flash: The law of gravity wasn’t suspended in the Valley. In last year’s sizzling real estate market, home prices and sales kept going up.

And up. And up.

At least one of four sales was to a speculator. Prices skyrocketed 55 percent in 2005. Sellers raked in profits as bidding wars drove up prices.

And now, an astonishing number of people are startled to find that the law of gravity still applies to the Phoenix area.

They’re stunned that prices are leveling off. Amazed that houses take nine weeks to sell instead of flying off the market in three. (Jay adds: actually in the height of the boom, houses were flying off the market in three hours, not three weeks. And MANY take more than nine weeks to sell now, largely due to over-pricing. There ARE buyers out there….)

For some, the market came down with a loud bang.

Those who treated the Valley’s housing market like a casino, buying homes sight unseen and expecting to cash in a big winner every time, deserve no pity if their gamble isn’t paying off.

Average buyers who got caught in the middle – rushing to trade up to a more expensive house and now unable to sell their old home for enough to swing the deal – are a more sympathetic case. But some of them, too, have been caught up in a risky round of flipping property, letting greed overcome good sense.

Good sense was also missing among homeowners who rushed to tap equity and will owe more than their houses are worth if prices decline.

The truly sad tales are home buyers left in the lurch by construction companies that stop projects in midstream because of rising costs, cash flow or other problems. Turner-Dunn Construction Inc. abruptly halted work on some 200 houses in Casa Grande and Maricopa.

It may be a cold comfort for buyers left holding the bag, but at least the state Department of Real Estate and the Registrar of Contractors are investigating Turner-Dunn.

And Arizona, unlike some states, has a recovery fund in case customers are stiffed by licensed contractors. But there are a lot of hoops, including getting a legal judgment, and payouts are capped at $30,000, with a $200,000 limit per contractor. A lot of Turner-Dunn home buyers stand to lose thousands in earnest money or pay out big bucks to get other companies to complete the construction job.

The boom-bust cycle is so much a part of the Arizona landscape – and real-estate history has repeated itself so often – that it’s unlikely any lessons will sink in.

But here are a few things we should learn:

”¢ The definition of a good market depends on your point of view. The run-up in prices last year, which pushed the median home past the quarter-million-dollar mark, was great for people in the real estate business and buyers who could cash in.

But it jacked up the price of housing in a place where affordable rents and mortgages used to offset relatively low wages.

Two years ago, the typical metro Valley household had more than enough income, 114 percent, to buy the average existing house. Now, that household earns just 84 percent of the amount needed for an average home. (Jay adds, I wish these reporters would cite their sources. I believe this one, I’d just like to know the source)

”¢ Buyers need to do their homework before entering into a contract for a new house. That includes looking into a company’s track record with the Registrar of Contractors, the Better Business Bureau and other projects, as well as carefully reading the public statement. The down payment should be paid out in several installments as work progresses. But it’s hard not to be swept away when the market is so hot that builders hold lotteries for their next phase. And a relatively new company may be hard to check out.

”¢ The Valley is tied into worldwide trends. (wow, how profound!) The innate value of our housing market wasn’t driving prices here. Favorable interest rates, low returns on other investments and demographic changes have fed a wave of speculation in places like Dublin, London and Singapore, according to Jay Butler, director of the Arizona Real Estate Center at Arizona State University.

”¢ The next time around won’t be different. (Jay adds–THAT is indeed a fact!)

June 2006 Phoenix Sales Stats

July 13, 2006 By Jay Thompson

Jay’s Opine: Home sales data for June was just released, and of course the media is all over it, proclaiming doom and gloom for the entire Phoenix market. Sales are definitely down, to 2000 levels, and that gets the majority of press. What doesn’t get nearly as much focus is yet another record has been set for median home value. The market can’t be imploding as the media would like you to believe if prices continue to rise (generally speaking). Yes, the RATE of rise has slowed, but as blogged here a long time ago, the appreciation rates we experienced in the past CAN’T continue .

June resale home sales fall to near 2000 levels
The Business Journal of Phoenix – 1:32 PM MST Wednesday
by The Business Journal

Another sign of the weakness in the local resale housing market, with June sales dipping to a six-year low.

The Arizona Real Estate Center reported Wednesday 5,460 recorded sales for June. This is the weakest amount since June 2000, when 5,020 sales were recorded.

June’s activity is down from the 6,870 sales recorded in May.

So far this year, there have been a total of 36,290 sales, while year-to-date sales stood at 58,030 at the same point in 2005.

However, Arizona Real Estate Center Director Jay Butler noted that the current level of activity is very comparable to year-to-date recorded sales in 2003, at 34,880 sales and 2004 year-to-date, 48,220 sales.

The primary news of last year’s housing market was the rapid rise in the median home price from $194,000 in January to $260,000 in December.

Although the median resale price in June set a new record at $267,000 compared to $249,900 for a year ago, the growth rate has been disappearing, with the median price being up slightly in May at $265,000, and $264,900 in April.

For June 2006, 14 percent of all recorded sales were for homes priced from $125,000 to $199,999, 44 percent for $200,000 to $299,999 and 39 percent for homes priced at more than $300,000.

Here is the city-by-city breakdown for June 2006 resales and prices, compared with June 2005:

* Phoenix resales dropped by 1,325 sales over the year to 1,725, as the median sales price held at $225,000 over the month, yet rose from $190,215 in June 2005.
* Scottsdale’s resale home market declined from 920 recorded sales a year ago to 465, however the median sales price jumped from $559,000 a year ago to $640,000.
* The Mesa resale housing market fell by 755 sales to 585, while the median price increased from $220,000 to $247,600.
* Glendale decreased from 880 to 430 sales, but the median sales price increased from $220,000 to $253,000.
* Peoria’s resale market fell from 560 sales to 250 sales, while the median price moved from $255,000 to $272,900.
* The Sun City resale market fell from 200 to 75 sales, as the median sales price increased to $215,000 from $186,200. Resale activity in Sun City West also fell from 90 to 45 sales, but the median sales price increased from $235,000 to $258,950.
* Gilbert’s resale count fell from 795 to 330 sales, but the median sales price increased from $291,500 to $330,000.
* Chandler’s resale market slowed from 760 recorded sales for a year ago to 380, while the median sales price increased from $275,000 to $295,000.
* The resale market in Tempe dropped from 270 to 160 sales, with the median sales price increasing to $298,500 from $245,000 a year ago.
* Avondale’s resale market fell from 265 to 120 sales with the median price moving from $238,000 to $259,050.
* El Mirage sales dropped by 100 to 85 sales, while the median home price went from $196,000 to $215,000.
* Goodyear declined from 215 to 90 sales, while the median price increased from $262,000 to $290,000.
* The Surprise resale market decreased from 535 recorded sales a year ago to 175 sales and the median sales price rose by $14,900 to $254,900 The Arizona Real Estate Center is associated with the Morrison School of Management and Agribusiness at Arizona State University’s Polytechnic campus. The center collects and analyzes data concerning real estate in the greater Phoenix metropolitan area.

More stories from the media. Note the negativity in the headlines…
http://kvoa.com/Global/story.asp?S=5144394&nav=HMO6
http://www.azcentral.com/arizonarepublic/news/articles/0713resale0713.html

Jay’s Opine: Says a fellow Realtor in the Republic article, “I’m not saying we are out of the woods yet,” he said. “There is so much property on the market that it is a very strong buyers market. It has done a 180 turn to what it was a year ago.” Sigh…. yes, the market is totally different than last year. But sorry folks, we are NOT in a “very strong buyers market”. There’s about six months of inventory on the market right now. By almost all experts definition, that is a NEUTRAL market. It FEELS like a “strong buyers market” because it has CHANGED so much from a insanely strong seller’s market.

Land Prices Increasingly Drive Housing Markets, Fed Study Says

June 27, 2006 By Jay Thompson

Jay’s Opine: Really not all that surprising. Do you think the value of your home increases as the structure ages and deteriorates? Generally speaking, older homes are in more need of repair, have higher maintenance costs, and aren’t as energy efficient as newer homes. Yet home values tend to increase over time”¦. Hmmm. Is it the actual structure that increases in value, or is it the LAND the structure is sitting on that increases in value? It’s all (well mostly) about the land”¦

Land Prices Increasingly Drive Housing Markets, Fed Study Says
By Campion Walsh
From The Wall Street Journal Online (June 22. Article Link)

WASHINGTON — Housing prices in big U.S. cities have increasingly reflected underlying land value rather than building value since the mid-1980s, and that trend is likely to continue, according to a Federal Reserve study released Tuesday.

In the 46 biggest metro housing markets, land’s share of property prices increased on average to 51% in 2004 from 32% in 1984, according to the study authored by Michael Palumbo, chief economist in the Fed’s flow of funds section, and Morris Davis, a former Fed economist now at the University of Wisconsin.

The increase was especially sharp during the 1998-2004 housing boom, when land’s share of property values gained 11 percentage points, the study said.

“With residential land having appreciated so significantly over the past 20 years around the country, the future course of land prices is expected to play an even more important role in governing home prices — in terms of average appreciation rates and volatility — in the next two decades,” according to the study.

The report concludes that land’s increased share of property values “could mean faster home-price appreciation, on average, and possibly larger swings in home prices.”

Even if land appreciation returns to the slower pace seen before the 1998-2004 boom, cumulative gains in land value mean that house prices might rise more quickly on average than they did before the boom, it said.

Regionally, relatively expensive housing markets have seen somewhat bigger increases in land’s share of prices in the 1998-2004 period, but the current housing boom has been marked by rapid appreciation of residential land “just about everywhere,” according to the report.

The Fed study also found that at some point since 1984 most large U.S. cities have gone through one pronounced price cycle in which residential land lost value for several years, usually after several years of rapid appreciation.

“In real terms, land prices have generally taken several years to go from peak to trough, and the subsequent recovery from these price declines has generally occurred at a more gradual pace,” the study said.

And Jay adds: Land values in and around the Phoenix area have exploded in the last couple of years. We recently listed and sold several 5 acre parcels inan area northwest of Phoenix called Whispering Ranch. As recently as two years ago, these parcels were selling for $8,000. Today’s prices? $60,000 – $100,000. Don’t you wish you’d bought a dozen two years ago? Another real life Phoenix land story…. an Air Force Sargent calls and says, “I’m looking for a couple of acres in Queen Creek. I lived near there about 10 years ago and am moving back. Can you help me?” I thought this guy might not understand the BOOM Queen Creek has gone through in the last couple of years. I asked him roughly how much he wanted to spend. He said $4 – $5,000 tops. Then I had to break the news to him that two acres in Queen Creek would probably cost him over $200, 000…

Phoenix Area MLS Listings & Sales Stats

May 7, 2006 By Jay Thompson

Homes (Data includes Single Family Homes, condo/Townhomes, 2 – 4plex, mobile/mfg and timeshares):
Active Listings: 39,055 (32,805 SFH’s)
Active With Contingencies (AWC): 1,263 (what does AWC mean?)
Pending: 8,262
Sold (April 1 – April 30): 6,793

Land:
Active: 8,602
AWC: 97
Pending: 733
Sold (4/1 – 4/30): 482

Most expensive current listing: $19,900,000
Number of homes listed over $10,000,000 = 11

For more Phoenix Home Sales stats visit the Statistics Page at http://www.ThompsonsRealty.com

Data is extracted from the Arizona Regional MLS (ARMLS) and compiled by yours truly

July 2006 MLS Listings and Sales Stats

The Law of Gravity Trumps Speculation

June 2006 Phoenix Sales Stats

Land Prices Increasingly Drive Housing Markets, Fed Study Says

Phoenix Area MLS Listings & Sales Stats

Who is The Phoenix Real Estate Guy?

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