Your monthly statistics for Phoenix Metro – ARMLS-STAT August-9-2013

 

 

 

 

 

 

 

 

If you don’t read the newspaper you are uninformed, if you do read the newspaper you are most likely misinformed.
– Mark Twain

 

GRAPHS – Your monthly statistics for Phoenix Metro – ARMLS-STAT August-9-2013

 

 

COMMENTARY  by Tom Ruff of The Information Market

July sales volume came in higher than expected with a year-over-year increase of 14.9% at

8,216 compared to 7,148. Month-over-month numbers were nearly identical with June numbers only

0.1% lower, 8,216 compared to 8,228. The median sales price rose again in July reaching $185,000

compared to $180,000 in June, which is a 2.8% increase for the month and 27% higher than at this time

last year. Total inventory numbers remain low, down 1.6% from last year at 20,049 compared to

20,384 and only 2.8% higher than 19,511 in June. The long term forecast, as our imbalance between

demand and supply continues, is for upward price pressure. However, in the short term a summer lull

is quite likely. It is not uncommon for prices to move sideways or slightly downward in the summer

months, but then pick up again as temperatures return to pleasant. The Pending Price Index forecasts a

median sale price of $183,000 for August, down slightly from July. Median sales prices are a great indicator of affordability, however the median can be weak as it tends to gravitate to rounded price points and monthly movements can exaggerate monthly price gains and declines. If the median sales price does fall as expected, it is best explained as temporary. The biggest changes in our market continue to be in declining distressed inventories as we quickly transition to a normal market. Normal sales now account for 80% of sold properties. In July we saw 941 short sales sold, 55% below last year at this time and 10% lower than June. President Obama’s choice of Phoenix for his economic speech on housing was not by chance, Phoenix is quickly becoming the poster child for the housing recovery.

 

Home buyers looking for bargains are going to have to work harder as added focus is given to

the smaller inventory of distressed properties. The total number of distressed single-family residences

in Maricopa County is now below 10,000. In this context distressed inventory is defined as the number

of homes with an active notice of trustee sale combined with the number of bank/government owned

homes. As of today there are only 9,915 total homes comprising the distressed property inventory,

6,588 with active notices and 3,327 are bank held. Of the 9,915 distressed homes, 1,362 of these properties are listed for sale, 1,277 have pending contracts and 227 are showing as closed on the MLS but have not yet publically recorded the conveyance. Our distressed inventory is even smaller than it appears. In July, 834 homes were sold at foreclosure auction, 374 reverted to the beneficiary and 460

were purchased by third parties. Of those 460 third party purchases, 30% were purchased at a price

higher than the original mortgage. Bargain hunters looking to acquire property and agents looking to

list distressed properties will increase their marketing efforts as the notices are recorded and doorknocking will be coming back in vogue. Defaults from the bubble mortgages will still be solicited as

short sales, but defaults from 2009-forward will most likely have equity and will be solicited as normal

sales. Early adapters not wanting to get lost in the shuffle with those soliciting notices as soon as they

ARMLS STAT AUGUST 2013

 

 

COMMENTARY

by Tom Ruff of The Information Market11 ARMLS STAT AUGUST 2013

are recorded will move their focus upstream by obtaining the names and addresses of people with

mortgages in the early stages of delinquency.

prices upwards.

Shiller is correct, there have been dramatic home price increases in Phoenix, but this is where the similarities to the bubble years stop. In 2005, new home construction was taking

place at record levels and credit was easy as the bubble was July sales volume came in higher than expected with a year-over-year increase of 14.9% at 8,216 compared to 7,148. Month-over-month numbers were nearly identical with June numbers only 0.1% lower, 8,216 compared to 8,228. The median sales price rose again in July reaching $185,000 compared to $180,000 in June, which is a 2.8% increase for the month and 27% higher than at this time last year. Total inventory numbers remain low, down 1.6% from last year at 20,049 compared to 20,384 and only 2.8% higher than 19,511 in June. The long term forecast, as our imbalance between demand and supply continues, is for upward price pressure. However, in the short term a summer lull is quite likely. It is not uncommon for prices to move sideways or slightly downward in the summer months, but then pick up again as temperatures return to pleasant. The Pending Price Index forecasts a median sale price of $183,000 for August, down slightly from July. Median sales prices are a great indicator of affordability, however the median can be weak as it tends to gravitate to rounded price points and monthly movements can exaggerate monthly price gains and declines. If the median sales price does fall as expected, it is best explained as temporary.

The biggest changes in our market continue to be in declining distressed inventories as we

quickly transition to a normal market. Normal sales now account for 80% of sold properties. In July we

saw 941 short sales sold, 55% below last year at this time and 10% lower than June. President Obama’s

choice of Phoenix for his economic speech on housing was not by chance, Phoenix is quickly becoming

the poster child for the housing recovery.

Home buyers looking for bargains are going to have to work harder as added focus is given to

the smaller inventory of distressed properties. The total number of distressed single-family residences

in Maricopa County is now below 10,000. In this context distressed inventory is defined as the number

of homes with an active notice of trustee sale combined with the number of bank/government owned

homes. As of today there are only 9,915 total homes comprising the distressed property inventory,

6,588 with active notices and 3,327 are bank held. Of the 9,915 distressed homes, 1,362 of these properties are listed for sale, 1,277 have pending contracts and 227 are showing as closed on the MLS but

have not yet publically recorded the conveyance. Our distressed inventory is even smaller than it appears. In July, 834 homes were sold at foreclosure auction, 374 reverted to the beneficiary and 460

were purchased by third parties. Of those 460 third party purchases, 30% were purchased at a price

higher than the original mortgage. Bargain hunters looking to acquire property and agents looking to

list distressed properties will increase their marketing efforts as the notices are recorded and doorknocking will be coming back in vogue. Defaults from the bubble mortgages will still be solicited as

short sales, but defaults from 2009-forward will most likely have equity and will be solicited as normal

sales. Early adapters not wanting to get lost in the shuffle with those soliciting notices as soon as they

ARMLS STAT AUGUST 2013

 

COMMENTARY

by Tom Ruff of The Information Market11 ARMLS STAT AUGUST 2013

are recorded will move their focus upstream by obtaining the names and addresses of people with

mortgages in the early stages of delinquency.

prices upwards.

Shiller is correct, there have been dramatic home price increases in Phoenix, but this is where the similarities to the bubble years stop. In 2005, new home construction was taking

place at record levels and credit was easy as the bubble was

 

Shiller is correct, there have been dramatic home price increases in Phoenix, but this is where the similarities to the bubble years stop. In 2005, new home construction was taking

place at record levels and credit was easy as the bubble was

inflating. In June of 2005, we actually saw the median sales

price of a resale home exceed the median sales price of new

construction, as a 6-9 month time lag existed between the

signed contract and the completed construction. Credit was

easy and a new home could be ordered with minimal down.

Prices were rising, but so was supply. Today we have a supply

shortage, strict credit guidelines requiring a 770 credit score

and a building industry responding slowly to our lack of inventory. The median price for a newly constructed home in Maricopa County for the month that just ended is $285,524,

$100,000 greater than our current median sales price.

 

 

Whenever asked about our sudden rise in prices and why, my response is, it has a lot

to do with how far our prices fell. The percentage increases we’ve seen have as much or more to do

with the denominator as the numerator. We saw the median sales price peak in 2006 at $264,800,

and bottom in 2011 at $108,300. Our current median sales price is $185,000. Yes, we have had dramatic price increases, from the bottom of the market. The plunge in median sales prices from the top

to bottom showed a nearly 60% decline. When prices fall by 60% you don’t get back to the top by

increasing 60%, prices need to increase 150%. Could our current increase in prices, in part, be attributed to a normal economic rebound where prices over corrected going down and are now seeking

balance?

 

 

Wall Street is an easy  target. Unfortunately, this  dog doesn’t hunt. Our data in  Maricopa County shows 11,700 single-family residences owned  by institutional investors, or  roughly 1% of all single-family  residences. Their interests in  condos have been minimal and  their footprint in Pinal is small,  acquiring less than 500 homes.  Since January 1, 2012, institutional investors have purchased 10,500 homes in Maricopa County through three basic channels: MLS, trustee sales and bulk/other investors.  One portfolio of approximately  300 properties was acquired  via a onetime Fannie Mae auction. The Wall Street investors  have been driven by undervalued assets and an abundant  rental pool created by homeowners displaced by foreclosure. Since the institutions purchase with cash and focus on  distressed single-family properties, they are buying at a discount

 

 

Of the 10,500 homes purchased in Maricopa since the beginning of 2012, roughly 4,200 were sold on the MLS, 3,000 were purchased at trustee’s  sale and 3,000 were purchased by acquiring the portfolios or individual assets of other investors (as previously mentioned 300 were acquired directly from Fannie Mae). While the 3,000 purchased at auction have  had a dramatic impact on competing local investors,  the 4,200 MLS purchases have had less of an impact on MLS pricing. Remember, our median sales price calculations have been based on MLS sold activity. One of the biggest factors driving our current market is the imbalance between our population growth and the number of new homes being built, not institutional investors.  Maybe the best argument I’ve read countering Shiller’s  hypothesis appeared in the daily comment section of The Cromford Report on July 28th. “One more confirmation of how silly the idea of “another bubble” is. The monthly average price per square foot is today standing at $119.79 for all areas and types. The average for the period January 1, 2001 to July 28, 2013 is $119.40. Whoever heard of a bubble in which prices were almost the same as a 13 year average?

GRAPHS

 

 

 

 

a little about me and my expertise – video

LAND SPECIALIST – LAND EXPERT – INVESTMENT BROKER – ARIZONA

https://www.youtube.com/watch?v=PPs3kpKR4nY

 

 

Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Investment Properties in Phoenix.

 

 

View my listings and my profile at:

http://www.loopnet.com/profile/14101172900/Walter-Unger-CCIM/Listings/

 

www.Walter-Unger.com

www.KLCommercialGroup.com

 

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Please go to my web-site and get all the newsflashes and updates in Commercial Investment Real Estate in Phoenix and Commercial Investment Properties in Phoenix daily

 

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Walter Unger CCIM, CCSS, CCLS

I am a successful Commercial Investment Real Estate Broker in Arizona now for 15 years and I worked with banks and their commercial REO properties for 3 years. I am also a commercial and  Landspecialist in Phoenix and a Landspecialist in Arizona.

 

1.

WHETHER YOU LEASE OR OWN

NOW IS THE TIME FOR YOU TO EXPAND, UPGRADE OR INVEST.

 

In my opinion we are at bottom of the cycle in Commercial Real Estate in Phoenix, so there is only one way and it’s called we are going up again and now is the time for you to expand, upgrade or invest in Commercial Properties in Phoenix.  The prices on deals I may get you will not be around forever.

 

2.

IF YOU OR ANYBODY YOU KNOW IS IN TROUBLE WITH YOUR BUSINESS, AS MANY AMERICANS ARE IN THE MOMENT, AND ARE ABOUT TO LOSE YOUR COMMERCIAL PROPERTY, PLEASE CONTACT ME.  IF YOUR BANK IS BEHAVING BADLY I MAY BE ABLE TO HELP YOU GET OUT OF SOME OR MAYBE A LOT OF FUTURE HEADACHES.

 

3.

WAITING TO SELL YOUR LAND ? TIMES CHANGE / IT’S TIME

  We barely could give land away the last few years, but times are changing.  Even in those meager years, I sold more land across the state than most other brokers. Before the real estate crash I was a land specialist in Arizona with millions of dollars of transactions, but then I had to change and also sell other commercial investment properties, which was fun, but I am a Commercial Landspecialist in Arizonal, a Commercial Land Specialist in Phoenix and love to sell land, one acre to thousands of acres.

Since I was a Land Specialist in Arizona and a Land Speciaost in Phoenix many of my clients, Sellers and Buyers remember me and now they are calling me again, so this is the time to get back into land and none of my clients, including future clients, will miss out on getting their best deal.

Also, if you are up-side down on your land, like many Americans, and the lender is giving you a hard time, now is the time to put your land on the market. Lenders are making deals now with short sales.  I have been working with banks for many years – I learned how to work with them.

 

If you have any questions about the 1 to  3 above, about Commercial Investment Properties in Phoenix or Commercial Investment Properties in Arizona,  I will gladly sit down with you and share my expertise and my professional opinion in Commercial Properties in Phoenix or Commercial Properties in Arizona with you.Obviously I am also in this to make money, but it could be a win-win situation for all of us.

 

Please reply by e-mail walterunger@ccim.net or call me 520-975-5207 (cell)  602-778-5110 (office direct).

 

www.Walter-Unger.com

 

 

 

Thank You

Walter

 

Walter Unger CCIM

Associate Broker

Kasten Long Commercial

2821 E. Camelback Road, Suite 600

Phoenix, AZ 85016

Cell:      520-975-5207

Direct:   602-759-1202

Office :  602-445-4141

Fax:      602-445-4188

walterunger@ccim.net

 

Delivering the New Standard of Excellence in Commercial Real Estate

 

www.walter-unger.com

www.KLCommercialGroup.com

 

 

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