Here is a mid-September 2009 update on the Phoenix real estate market. This post is for Phoenix only.
The news is generally good for the Phoenix market. As our readers know, I am a supply and demand guy with an emphasis on the foreclosure market. Supply and demand tells us a lot about market health and gives good short to mid range market predictions. The foreclosure market tells us a lot about pricing and appreciation.
A number of factors indicate demand is outpacing supply. Both Days on market (DOM) and the months of supply have been falling. According to Micheal Orr of Cromford Report fame, Phoenix has about 3.5 months of inventory. This is a rather low number since normal figures would be in the 4-6 month range.
The lowering of DOM and low number of available homes suggests a sellers market and we are seeing some appreciation of lower priced homes.
The image on the right details the price per square foot sales price info on Phoenix home sales. $/sq.ft. is the dominant factor when valuing homes. You can click on the image to enlarge for easier viewing. As you can see, monthly values appear to be coming back from the dead.
Lender owned homes are still dominating the sales. Sixty-three percent of home sales in the past month were REO's. We do not expect too much change on this front as bank owned homes generally offer the best value for buyers and are pretty easy to negotiate. In addition, the number of trustee sales (when the bank takes back the property) rose steadily through August and is only showing a small decline this month.
In addition to bank owned homes, short sales are seeing a rise both in numbers for sale and actual closed escrows. This is good news on many fronts. Short sales tend to sell for higher prices than bank owned and can help stabilize neighborhood values. In addition, the rise in closed sales indicates the banks are getting their act together by working with homeowners prior to the home going into foreclosure... a win win for all in most cases.
In general, we see some optimistic numbers going into Fall. Once again, we have to say, most of the good news centers around homes priced under $200,000 with the sub $125,000 market seeing the best results. If tradition means anything is this crazy market, the stability/appreciation we're seeing on lower price homes should work its way up to the mid-price market during the coming year.
Thanks again for your support of Urban Life... our readers are the best!!
Gene Urban
The Urban Team at Realty Executives
602-234-5777
