Archive for the Maricopa County Market Reports category.
CURRENT AS OF Feb 5th, 2008
Summary
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Looks like we’ve hit the peak for listings coming onto the market. There may be some seasonality related to this, but I think overall the total number of listings are going to be dropping somewhat. Notice the momentum lines have crossed each other, and are slowing their downward trend, almost to a flat line. This could indicate an overall drop in listings for the upcoming year. |
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Looks like we’re in a downward trend here. There’s definitely some seasonal factors playing in to this chart, as we’re at the slowest time of the year to sell a house. Feb charts should give us some good indications for the upcoming year. |
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Still seeing a decline in the Avg Sales price- remember, this is for Dec 2007, folks. |
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Median Sales price doesn’t seem to be dropping as drastically as it was previously. It’s still coming to a slowdown, sitting at an 8.1% drop from last year. I’m anxious to see Jan/Feb of 2008’s charts to give us a better idea of the upcoming year. |
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This is to be expected this time of year. Sitting at just above 100 days on market isn’t all that bad for the year end. However, notice the severe drop in the trend lines- this indicates a change is on the horizon. Since the trend is upward in direction, we can expect it to reverse and start giving us a lower Days on Market for the County. |
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As predicted earlier, absorption rates are declining now, which is surprising for the 4th Quarter of a year. Momentum lines are fairly flat, so predicting future direction is difficult. |
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Very odd results going on here. Obviously there’s a decline in the number of permits. However, check out the momentum readings. They’re in opposite directions (remember, one reads ‘faster’ than the other). Taking into consideration the overall directional trend of the data, I would think Building Permits will flat line over the next few months (meaning, remain steady) until the Summer. |
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Still climbing! There’s a ton more ARM’s adjusting now, and the difficulty in the mortgage market is helping defaults hit record highs. Less mortgage programs means less options for homeowners to refi out, or, buyer’s to purchase homes in foreclosure. We won’t see a slowdown or change in this until the Mortgage Industry turns things around. |
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Still sky rocketing here. I’m not surprised, as the Lender’s still haven’t figured out how to deal with all these foreclosures. You’ll notice, the momentum lines are slowing slightly- which, I expect a change in direction sometime in Summer 2008. I am guessing it’ll take the lenders that long to figure out how to work out Short Sales effectively. |
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We’re heading back to the baseline of Investor Activity. The average for our market, in other words. All the wannabe investors have run back to their IRAs and stocks- as they’re losing their homes to foreclosure now. All the guys who know what they’re doing (the smart ones!) are coming back into the market now, snagging all these great deals we have available to us. Momentum is coming to a plateau, which means it’ll remain steady for investor activity. No flood of new investors, and no loss of seasoned investors. |
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Still not the most exciting of charts- however, the faster Momentum line (the pink one) is just barely crossing over the zero line. With the politics going on right now, I believe we’ll continue to see interest rates drop until we get the mortgage markets back on track. |
Here’s an interesting presentation for you. If you don’t know who Elliot Pollack is, then you haven’t lived in AZ for very long. He’s a fairly large and well known Commercial Developer, especially here in the East Valley. He has put out some great data/presentations, as well as his outlook for 2008 and the Greater Phoenix area. Essentially, 2008 might see the bottom of the market- not much different than what we’re already seeing, prices may decline some, etc. However, he also agrees with the long term outlook for Arizona, that we remain strong for job and population growth. It’s a great market for building your net worth and retirement accounts!
Spend some time on his site, www.arizonaeconomy.com, there’s a TON of great info on there!
Here’s yet another study I found a little earlier, documenting my previous claims of a historical average rate of appreciation to be 4-7%. ASU’s PolyTechnic published this article, and although it’s not updated for 2007, still has some great information in here. What surprised me a little is the appreciation rates around the ‘Corporate’ areas in town- Central Phoenix, Camelback Areas, South Scottsdale, all did very well. Notice how much lower the condo/townhome market is compared to single family housing. Just too much supply, not enough demand for those things (but do very well as rentals). Check it out, let me know your thoughts.
Appreciation at a Record Level for 2006.
Arizona State University’s W.P. Carey School of Business has published a new way of measuring appreciation rates here in Arizona. It’s about time someone came up with a solid way to tracking this data! Instead of rehashing out the entire study- here’s the gist of it.
They tracked houses that have sold previous, and compared them to what they’re selling for NOW to come up with a measure of appreciation between the 2 dates. Now, because of the seasonality of the Real Estate market, they compared like months to like months to maintain some consistency. It’s the exact same thing I do in my own analysis on the market.
Now, don’t get confused and freak out when you see these charts! This is the Repeat Sales Index, not where the prices are currently! If you look at the charts and not read the article, you’d freak out thinking your home and other investment property has lost 50% or more of their value. THAT IS NOT TRUE. These charts are the RATES OF APPRECIATION, not home prices. So, during the boom, Chandler had a 48% appreciation. Now, it’s slightly declined in value. When you look at the chart for it, it’s pretty dramatic. Just make sure to keep some perspective and remember, this is the RATES OF APPRECIATION. Check it out here. Finally we have a legitimate and current source to track our appreciation rates.
Repeat Sales Index - ASU W.P. Carey School of Business.
If you have any thoughts or comments, I invite you to post below!
CURRENT AS OF NOVEMBER 14th, 2007
For information on how to read the charts, click here.
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!
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.
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.
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CURRENT AS OF October 31, 2007
Building Permits
Obviously we’re seeing the standard decrease in permits issued for this time of year. However, this is a 38% decrease from last year’s numbers. No surprise here, the builders are holding back until they dump some of the inventory they have sitting around. Interesting point- notice the divergence going on in the indicators. Seems as if they are disagreeing with each other. Typically, this can indicate a reversal of direction in the overall trendline. It will be interesting to see what happens in the upcoming 3-4 months. I’m going to be watching this one closely.
Interest Rates
Not much change from last month. There’s a ton of talk going on within the political world, and with Bush’s new plans on the horizon, we could see some interesting movements here in the future. Again, we have some slight divergence here- notice how the EMA line has already leveled itself out, while the Momentum line has crossed the baseline. I’m hoping in the next month or so all three indicators will start heading for, or, crossing over the baseline in a downward direction. This will reinforce a great buying signal.
CLICK BELOW TO SEE THE REST OF THE CHARTS!
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Every month I compile Residential Housing Statistics for Maricopa County, AZ. The numbers are gathered from a variety of sources, listed below. I include a couple of indicators on the charts, which give me ’signals’ as to what the market is doing, or possibly going to do. These are similar to some of the indicators Day Traders and Stock Brokers use with their market charts. Each chart gives different information, or signs of what state the Real Estate market is in here in Arizona. While some of them are considered to be ‘Leading Indicators’ (Building Permits, Interest Rates), some are considered as ‘Current Indicators’ (Active Listings, MLS Solds, Absorption Rates), the remaining are considered to be ‘Trailing Indicators’ (Mortgage Defaults, Trustee’s Deeds, and coming soon- REOs). How To Read the Charts There are 3 lines on each chart. The raw data (Red line) is exactly that- the real numbers used in the chart. It correlates to the secondary Y-axis on the right hand side. This will tell you the chart’s exact numbers for a specific time period. The Momentum Reading Indicator (Blue line) considers each current month’s data, and the same month’s data in previous years to determine an amount of ‘momentum’ for that chart. It tells you the strength of momentum behind the current chart’s trend or direction of travel. The EMA Momentum Reading Indicator (Pink line) is the same as the blue line, except that it puts a heavier emphasis on the most recent month’s data, a little less emphasis on last year’s, and so on, and so on. So essentially, what happened this year and last year will effect the momentum more than what happened 5 years ago. Overall, the blue line can give you a little faster reading than the raw data, and the pink line can give you an even faster reading than the blue line. If you’re familiar with trading the stock market, these indicators will make much more sense to you. Each chart has a baseline from the left side Y-axis at ‘zero’. This is considered to be a ‘tipping point’ of sorts to show a possible change in the direction of the market. An indicator crossing the baseline in an upward direction may indicate a good trend on one chart (for instance, Solds), while crossing it in the same direction on a different chart may indicate an opposite response (for example, Interest Rates). Due to the nature of the indicators, they tend to ’sway’ a bit after a large surge in any direction, as compared to a market with slow/steady results. The key here is to pay attention to the direction of travel for each indicator, as well as at what point they cross the baseline. If you look at the time around 2002-2004, most of the charts will have seen a cross in the baseline in a specific direction. This would say that it’s a great time to buy property. Look again at the period of 2005-2007- the indicators on most charts would have crossed back over the baseline, indicating a time to sell your property. If you have 3+ charts telling you one signal, you might want to perk up and start listening. Keep in mind that the indicators are swayed pretty drastically right now as our market recovers from the boom/sell off we’ve had in the last 2 years. They still work, you just have to take into consideration what they’re reading, and adjust accordingly to your interpretation. Having such a strong movement for sales before our boom years, and then such a fall off shortly after will yield a really strong drop in momentum in the 2 indicators. As is common in trading the stock market, sometimes when an indicator is moving in a separate direction than the raw data (divergence), it could mean there’s a reversal in direction coming soon. If there’s a way to ‘predict’ the movement in the market, this is it.
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!
Sources: Arizona Regional Multiple Listing Service Maricopa County Recorder Federal Reserve Bank of St Louis US Census Bureau
