Mythology has it that the Phoenix would consume itself with fire every 500 years then be reborn to another 500 year life. To those with exposure to the Phoenix real estate market, the last couple of years have probably felt like 500 and surely are ready for a rebirth. The good news is that there’s some consistent data coming out of the Phoenix real estate market that it may indeed be showing signs of resurrection.
Here’s the good news in the data:
Relists are down. Relisting a property is usually a tactic that sellers take when they’re getting little activity on their home. This is subsequently followed by price reductions. Fewer relists along with lower days-on-market indicates sales activity is rising.
Fewer and smaller price reductions. Fewer sellers are reducing their price, down from about 60% in the early Spring to about 40% now, with magnitude of the price reductions down from about 18% in the Spring to 12% presently:
Prices have stabilized. Weekly price levels of new listings and exits have flattened out after consistent declines since 2007:
Inventory and Days-on-Market are down:
The obvious question is whether or not these gains are sustainable with the ongoing increases in foreclosure rates and the “shadow inventory” on bank balance sheets. There’s a bit of chatter about the release from Amherst Securities Group estimating over 7 million units in the shadow inventory count. (There’s a link to the entire Amherst report available at Multi Family Investor.)
Recent activity in the REO and foreclosure market argues that banks will proceed to drip out properties into the market, but the sheer numbers reported in the Amherst report are alarming. We’re definitely keeping tabs but inventory levels have yet to show signs of increasing from their current levels.
[Author's note: After posting this article, I came across another article posted byTom Lindmark that looked at the Pheonix real estate market using the same analogy. Lots of good insight in his post - worth a read for sure. Nice work Tom!]
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as an investor in the phoenix market working short sales I am absolutely realizing a rising as I’m getting higher than asking price cash offers on my properties that I list for sale either at or just above ARV. REO’s are being bid up by cash buyers and from my vantage point its seeming harder for FHA buyers to get in without being beat out by the cash guys/gals.
Good post on “The Phoenix Real Estate Market: Out of the Ashes?”. I did come across a blog WGCommunities.com. It has wonderful information on community building and investing in real estate. Hope it will be helpful for you guys too.
Thanks,
Roy Peter – Realestate Marketing
Real Estate markets always have Ups and Downs but eh one who survives who always accepts the challenges and serves better..
Phoenix’s home resale inventories stayed the same, with a 0 percent change since September 2009. Distressed properties such as foreclosures and short sales increase as a percentage of the total market in October. For more information, http://www.movoto.com/statistics/az/phoenix.htm
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