CURRENT AS OF NOVEMBER 14th, 2007

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NOTICE! I have added 4 new charts and stats to the reports! The first thing you’ll notice are new charts for both ‘Average Sold Price‘ and ‘Median Sold Price‘ for Maricopa County. Next you’ll notice the ‘Average Days on Market‘ stats for homes on MLS. Last, you’ll see an ‘Investor Activity‘ chart. This is an exclusive chart ONLY to REI Pipeline.com! This works much like the Absorption Rate, but solely for the foreclosure sales. It tracks how much ‘activity’ is going on between the Notice of Foreclosure Sales and the actual Trustee’s Deeds being issued from those sales issued.

The ‘Investor Activity Chart’ can be interpreted in various ways. Some might look at it as a measure of how many investors are out there picking up deals BEFORE they go to the foreclosure sale auction at the courthouse steps. This would also indicate the home owner’s ability to save their home on their own (either by filing Bankruptcy, working it out with the bank and bringing their loans current, selling it either with a Realtor® or to a private investor, etc). Conversely, some might look at it as a measure of how much activity is going on at the foreclosure auction. I anticipate adding in an ‘REO’ variable to the stats here very soon- this will tell us how well the banks are responding to the market, and will most certainly be the slowest trailing indicator out of the bunch. More to come on that later…

If you notice the movements in the Investor Activity Chart and it’s indicators, you’ll see some interesting data around the time of our boom/bust, which leads me to believe the effectiveness of this indicator.

Only REI Pipeline.com brings you the most accurate and effective data for investing in our market! If you like what you see, please feel free to post a comment below!

MLS Active Listings

We’re still 25% more than the same month last year, however, it is a 2.5% DECREASE from last month. This is to be expected as seller’s take their homes off the market for the Holiday season. Notice how the divergence in the indicators took place at the beginning of this year. That CAN mean a change in direction of the overall trend. We just might start seeing an overall decrease in listings coming into the beginning of 2008. The indicators have moved closely to the baseline, showing a much lower ‘momentum’ than previous months, and is continuing to slow down. That’s a great sign for our market. Let’s keep a close eye on this one.

MLS Solds

No shocker here. 3.9% decrease from last month- again, an expected slowing for the holiday season. The EMA indicator is still pointed downward, signaling even less sales in the near future. I anticipate this to level out and possibly start picking back up in Feb/Mar of 2008, our high sales season.

Avg Sale Price

We’re seeing a 1.9% decrease from last month, sitting at $319,000 for the entire county. Notice the steady incline in price over the last 6 years. If you had this data in 2002 when the pink indicator crossed the baseline, you would’ve known to start buying every rental property you can. Looks like the indicators are showing a complete loss of momentum for that upward trend in price. We may be heading into a decline, or, just a temporary ‘relaxing’ of the market for a month or two. Don’t panic and assume that because the indicators are about to cross the baseline, the prices are going to tumble. Remember the indicators measure MOMENTUM of a trend. We could just be sitting at a plateau in pricing, and if that’s the case, we’ll see the indicators round out at the bottom and level off. This just may be the ‘bottom’ of the market everyone is anticipating. We’ll have to see how the next month or two goes.

Median Sale Price

Not completely different than the Average Sale Price chart. Seems as if overall, we’re holding pretty steady, with a slight decline in process. It’s not nearly as bad as the media makes it out to be, huh? The indicators in this chart have crossed the baseline, stating that there could be a change in direction of the trend ahead. Nothing too exciting otherwise.

Average Days on Market

This is exciting to me. The indicators are showing a nice decline in momentum of the upwards trend. The raw data is already pointing downwards, and we could start seeing the Days on Market decline as we head into 2008. In the grand scheme of things, 3 months on market is not all that horrible. We also saw a nice decrease in holding time to the tune of 1.2%. Not bad considering the time of year. This says of the houses that are selling, they’re selling a tad bit faster than they were before. Again, notice where the indicators crossed the baseline back in Jan 2004. This was the ‘beginning’ of the boom. This was a very strong BUY signal. Now notice the position and direction of the indicators now- heading South. If they cross the baseline again, and the days on market are declining, we’ll see confirmation for yet another BUY signal from this chart.

Absorption

I’m a little hesitant with this one. We’re seeing an uptick in the data. The indicators could be just leveling out for now. The uptick could be caused by the seasonal slow down in home sales. Again, not making assumptions until Feb 2008 on this one.

Building Permits

Again, we’re seeing a seasonal slow down, and an overall market slow down from the previous years. Builder’s obviously have too much inventory that they need to get rid of before applying for more permits. I also believe they may be waiting somewhat for land prices and materials to come back down. The indicators are completely separated on this, but they might be heading to a plateau as well.

Mortgage Defaults

Up 2.6% from last month, and 138% from last year. However, look at the charts, they’re showing a turn over in the momentum indicators, and the raw data is slowing slightly. Could we be peaking out here?

Trustee’s Deeds

Down slightly from last month, still up over 400% from last year. Basically this means 2 things. First, less and less home owner’s are able to save their homes before the foreclosure sale. Obviously that’s a result of stricter bankruptcy laws, much less loan programs out there for them to refi into, a slowdown in sales from the MLS, and less newbie investors knocking at their doors trying to buy their home direct. Second, it shows that less investors are able to buy them at the foreclosure sale itself. This is because most banks don’t have a clue yet about working out the short sales more eagerly, and setting their opening bids low enough for investors to bid on the property. You’ll see some interesting things in this chart coming in 2008…

Investor Activity

A 55% slowdown from last year, however, nearly a 5% increase from last month. Look at how crazy things got during our slowdown in ‘05-06. Insane! Seems as if it’s dropped back down to normal levels now. The EMA indicator (pink) has turned up slightly, and the blue momentum indicator is slightly slowing as well. We could be leveling off here for now. This is an interesting indicator to me because you can use it a few ways.

First, to show the amount level of ‘capability’ a homeowner has to save their home BEFORE the auction. This would indicate a decrease in Trustee’s Deeds. However, with the stricter Bankruptcy Laws, very few loan options, a slow down in MLS Home Sales, and every newbie investor running back to the stock market, seller’s don’t have many options left for them. So, they let their home go to auction. Second, it could indicate how many investors are out there picking up homes out of pre-foreclosure (not many right now!). Third, you could use this to judge how many investors are buying at the foreclosure sale. Fourth, you can interpret how well banks are responding to the market and working out a solution with the home owner or via short sale BEFORE the foreclosure sale.

This is the first month using this indicator, so we’ll see how well it does heading into 2008.

Interest Rates

Nothing too exciting and new here. We’ve all heard about the rates getting cut again. Seems that we’re hanging steady, which is good news for our entire economy. The EMA indicator has just about hit the baseline, and seems to be fairly steady at that point. The momentum line is also holding steady just under the baseline. This is to be expected as they both measure the strength of the trend, which is also remaining level overall.