PHOENIX REAL ESTATE MARKET REPORT - PRICES UP!
Phoenix Arizona real estate sales increased over July, but sales are way down from a year ago while prices are up! Check out interactive graphic for more details. August 2012 closed sales of Phoenix Homes were up 5% over July 2012 by ~371 properties. But compared to a year ago, August 2012 sales are down 14% while inventory declined 47%. The upside, due to high demand and limited inventory, is the average home price over the last year is up 26% to $190,812!
Foreclosures were always a low percentage of the total inventory. But the low foreclosure prices had the greatest attraction for buyers and foreclosures were a large percentage of sales. Investor large bulk purchases at foreclosure/trustee sales have left fewer REO/Bank Owned homes to be listed and sold in the MLS. Investors lucky enough to purchase homes at Trustee Sale will resell the homes as Fix and Flips or Fix and Hold the homes as rental properties. Additionally, rising home prices make it possible for a home to be sold as a traditional sale that would have been sold as a short sale earlier. The net effect is we have fewer distressed sales. Don't expect our "shadow inventory" to be dumped on the market. By all accounts there is no shadow inventory of consequence... if it exists at all.
A balanced market with 6 months of inventory does not favor either the buyer or seller. More inventory favors the buyer, less inventory favors the seller. The breakdown of months of metro Phoenix East Valley inventory as follows: 3.2 months of Chandler homes for sale AZ, 2.9 months of Gilbert homes for sale AZ, 3.5 months of Mesa homes for sale AZ, 3.5 months of Phoenix homes for sale and 3.1 months of Tempe homes for sale.
Inventory of Scottsdale homes for sale AZ is higher at 4.7 months because they have a large inventory of expensive North Scottsdale homes. Scottsdale needs to be evaluated as two markets. One is homes priced under $1M and the other for homes priced over $1M. Under $1M the inventory of Scottsdale homes with a median list price of $499,000 is just as tight as the rest of East Valley at 3.5 months. Inventory of Scottsdale homes for sale AZ priced above $1M with a median price of $1.75M is at 15 months.
Builders are competing to buy ready-to-build lots and home prices will increase to reflect higher land prices in new subdivisions. Builders are starting to build in the same outlying areas they could not flee fast enough just a few years ago. Yes, the Phoenix housing market has changed and clawing its way back to normalcy.
If you have been waiting for lower prices, you missed out. Prices are still way off our highs and now is your best time to buy now versus in the future.
Call Sam Elam at (480) 213-1799 to learn more about buying or selling homes and investment properties in metro Phoenix East Valley.