But Do Pending Sales Indicate a Leveling Off?
Sales prices rose again in the past 30 days in our Phoenix Metro communities measuring all areas and types of housing. Many are wondering if this recent rise will be a continuous surge or a momentary blip on the proverbial radar screen. Fair question.
With access to what we believe is the best real estate analytics in the nation via Michael Orr and the ASU School of Real Estate, Arizona is in a mostly enviable position to get a glimpse of what the local real estate future holds, at least in the near term. And as always, we continue to preach that “all real estate is local,” meaning whatever may be happening in the big picture of the Phoenix Metro real estate market may not be true of your neighborhood.
For the l0ng term, the Phoenix Metro real estate area seems to be moving in a positive direction. As Arizona strengthens its core job base away from home construction, which we have in years past relied on to grow, our economy could likewise grow in the health industry, bio sciences and the emerging Silicon Desert.
But here in the short term, for the monthly period ending May 15, the Valley is currently recording a sales price Per Square Foot (PSF) of $136.34 averaged for all areas and types within our MLS. This is 2.2% above the PSF of $133.42 measured April 15 and represents the second month in a row with a significant increase in average pricing.
Distressed Property Sales Continue to Decrease
Another real estate bright spot is that REO (Bank Owned) and short sales continue to decrease their market share, while “normal” or traditional property sales increased. The market share of normal sales increased from 93.1% to 93.5% over the last 30 days. REOs lost market share from 3.8% to 3.5%, the lowest since July 2007. Short sales and pre-foreclosures also lost market share from 3.1% to 2.9%.
Pending Sales Prices Slowed Last Month
On May 15 the pending listings for all areas & types showed an average list PSF of $136.08, 1.3% below the reading for April 15. This could indicate a slowing of price increases. In reviewing the average list price numbers for Pending listings, Michael Orr of ASU / Cromford Report is forecasting another slight sales price drop when those numbers are looked at in mid-June.
As Realtor professionals, like Stock market analysts, we can tend to take a micro view of the importance of short term price increases or decreases, but in the end, the most important thing is not that, but our day to day living enjoyment in our “home” rather than our investment.
What are your thoughts? Shoot us an e-mail to let us know or ask any questions.
See you next week!
– Mike Bodeen