Phoenix Market Trends

Below you’ll find some recent insights and trends for the Phoenix real estate market. Instead of spewing the traditional data, I decided to present some information I’m hoping everyone will find enlightening about today’s market condition. Its the stuff, Realtors intuitively know, but reporters often fail to capture in their reports.

Monthly Sales from 2007 to 2010

For the past 3 months, you’ll notice homes sales in Phoenix have been doing their traditional seasonal dip. While the total number of home sales in October is lower than the previous year, the total number of sales is still significantly higher than 2008 and 2007. Keep in mind, there is a good chance last year’s numbers were inflated due to the home buyer tax credit.

Phoenix Home Sales by Listing Type

The chart below shows the number of home sales by listing type. Back in January last year lender owned sales made up a significant portion of the sales. As the chart shows, the number of traditional sales and short sales closing are slowly increasing. Even though lender owned homes are still selling twice as fast as short sales, we can definitely see the trend and proof that banks are working with home owners to short sell their homes.

Homes for Sale vs Homes Sold by Listing Type

Even though we are starting to see an increase in the number of short sales closing, there is a disproportionate number of active short sales compared to the number that sell each month. In October,  23% of the home sold were short sales, however 35% of the homes currently for sale are short sales. Lender owned properties are also similarly disproportionate.  In October, 48% of the homes sold were lender owned, but currently 23% of the active homes are lender owned. Which means, you’ll see a lot more short sales on the market but at the end of the day twice as many of lender owned homes will sell.

Negotiations – Median List vs Sold Price

Just how much negotiation goes on these days? When you look at the median final list price compared to the median sold price, you’ll see there is very little negotiation going on. In fact, with short sales, we’re seeing 0% negotiation on the final sales price. A large reason for the short sale negotiation being so low is because the final list price on a short sale is commonly the bank’s “approved price” which means, “Take It or “Leave It” on the price. Compare the median sales price of a short sale to a traditional sale and you’ll see the “Take It or Leave It” price is still well below the median price on a traditional sale. Given the final price isn’t as low as a lender owned home, but we all know short sales are typically in far better shape.

Fleeting Thoughts

  • Phoenix sales are strong.
  • Lender owned homes sell fast and cheap
  • Short sales are selling, but don’t count on negotiating a lower price