Thank you M for the latest Phoenix update!:
ALL MLS
[data from ARMLS]
Sold March 1-24 ’07 3,968
Sold March 1-24 ’06 5,144
Percent change: -23%
Total inventory as of this morning: 49,533
These numbers are not a good predictor of total sales for the month, as many properties close at the end of the month. They are, however, a good indicator of how we are doing year-over-year. Remember, last year numbers were significantly off of 2005 highs. Sales for March 2006 were 25% below 2005 levels.
Sales are running below my expectations. As we are beginning to get reports of tightening lending standards affecting buyers ability to close, we may see this as a significant factor in sales this year.
M’s comment to me this morning:
I,like you thought we would be doing better. Remember, we are not comparing YOY numbers from 05. In late Q1 ’06 we were already in a declining market, so these numbers are quite sobering.
"Sobering" pretty much sums it up.
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Here’s another potential bucket-o-cold-water on the 3,968 sales thus far.
How many of them would not have closed if the subprime / Alt-A / “we want some $$ down” changes we saw in the last couple weeks would have taken place just 60 days ago instead?
As you alluded to, some portion of the 3,968 would be impossible to fund if they started the process today. Dare we say that there may have actually been a “push” to close those sales by now as the credit started to tighten up, and there might NOT be a flurry of closings in the next week?
Thanks to “M” and Twist, I guess we’ll all know the story in a few short days.
Asset Hunter-
I think the jury is still out here on March. Will a push to beat tighter standards rush more homes to closing, or is it too late?
While Lereah seems to be able to predict the future with only one data point, I’m going to need to see a few more months before I can seriously make any guess what the new standard will do to sales.
Some estimates I’ve seen say this will pull 20% of buyers out of the market. We’ll see if that’s how it plays out.
11 months of inventory. Critical mass event horizon passed.
11 Months inventory, but when you look at the higher priced homes ($500k+) it is closer to two years inventory. Prices still aren’t moving as much as I would like them to, but they are moving down gradually.
I live in a small neighborhood (renting) in North Scottsdale. Most of the 75 or so houses are very similar. On my street there are over ten houses for sale that are pretty much the same model with a few different options. Another one went on the market at $700k this week (1998 sqft). The same house down the street is 2423 sqft and priced at $555k (reduced several times) and has been on the market for over a year. I’d really like to know why the seller of the new home thinks they can get $700k when a house 20% bigger, same neighborhood, same quality isn’t selling for $150k less.
At this rate I’ll probably rent for another six months.
Also, off topic, but I did visit some new construction this weekend. The salesperson mentioned that if we didn’t bring a realtor there would be an additional 7% discount off the negotiated price.
“Sales are sobering”
Probably “sobering” enough to drive more than a few Phoenix area realtors to the bottle.
The good news is: the worst is behind us!
NVMike-
Lereah was right- the worst is behind us, and in front of us, and on the sides. Kind of like being in the eye of the storm.
Guys! The Tempe/ East Valley SFR and condo market has turned around dramatically in the last 30 days. Consider these statistics from the Arizona Regional Multiple Listings as of May 29th, 2007: for condominium conversions, sales price ratio is 102.55% for asking to sales price! Yes bidding wars are back to some extent!! Price appreciation in zip codes 85282,85283,85284,and 85285 was 22.89% period of May 06 to May 07.