STAT, the Arizona Regional Multiple Listings Service’s (ARMLS®) monthly statistical newsletter, provides a lucid and timely view of what is happening to the residential real estate market in the Valley of the Sun – The Metro Phoenix Area. Unlike statistics compiled by other entities, it does not rely on data from third parties delivered thirty to ninety days late. STAT’s focus is on SALES and ACTIVE INVENTORY, year over year and month over month, including details on sales prices, foreclosures and short commentary. * The most current version will provide data from the previous month.
STAT October 2013
The October version of the STAT newsletter is ready for review and it covers September 2013 data. The STAT – October 2013 version provides some interesting numbers as it suggests a shift in current market conditions. Total inventory numbers are increasing, up 9.4% for the month and 7.3% year-over-year. With total inventory numbers increasing and pending sales contracts declining, the trend is pointing toward a balanced market. As the supply and demand move toward a balanced state, expect price increases to moderate.
Investor Interest Declining
Overall investor interest in Maricopa County declined 31% and institutional investment activity declined 72% from September 2012 to September 2013. It makes sense that a decline in investor activity would also mean a decline in cash sales. The number of homes purchased with a mortgage increased 18% year-over-year.
Second Home Purchases Down
Just as the number of investors purchasing homes in Maricopa County declined over the past year, so has the number of second-home buyers. In 2012, 916 home buyers indicated they were purchasing a second home while in 2013 this number fell to 707, a decline of 23%. With a significant 31% decline in investor activity and a 23% decline in second-home buyers, this can mean only one thing – an increase in owner-occupied homes.
Final Phase of Housing Recovery
In the STAT September 2013 version, it was suggested that first-time buyers, boomerang buyers and an increase in new home construction would embody the final phase of the housing recovery. September 2012 produced 739 newly constructed home sales, while this September there was 890. Couple a 20% increase in newly constructed home sales year-over-year with the 21% increase in owner-occupied purchases year-over-year and it appears the Valley of the Sun is in the very early stages of the fourth and final phase of the housing recovery.
NEW Home Construction vs Foreclosures
One final indicator of movement into the final phase of recovery can be seen by comparing the number of newly constructed home sales to the number of foreclosures. In January of 2008 the number of home foreclosures each month overtook the number of newly constructed homes sold each month. This trend has finally reversed itself and this summer for the first time in five and a half years more new homes were built and sold than the number of homes sold on the courthouse steps.
Buyers are the focus this month because there is presently an increase in active listings and a decline in pending sales, or in simple economic terms, an increase in supply and a decline in demand. The last two years were seen as a seller’s market where demand outpaced supply placing the listing agent in the stronger bargaining position. As there is movement into a balanced market with fewer investors and cash buyers, the traditional owner-occupant will play a more vital role. It’s time to show the buyers some love