Greater Phoenix–Single Family Detached-
Market is very strong below $100,000 but quite weak over $200,000
Average sales price per aq. ft. is rising for homes under $100,000 and stable up to $200,000.
Pricing is weakening for homes over $200,000 with those over $800,000 looking most vulnerable.
A sharp deterioration in demand is now evident at price ranges over $400,000.
Foreclosure activity is declining and REO inventory is falling very fast, especially at the lower price levels.
The market in Greater Phoenix has completely reversed since the fourth quarter of 2010 when the bottom end was over-supplied and getting weaker. Now the strongest demand is below $100,000 and inventory levels are dropping fast even during the late summer when they normally increase. Demand from investors for homes they can turn into rentals is very significant. In contrast the higher price ranges were relatively strong over the past year but are now suffering from a sharp fall in demand.
Homes under $100,000
Demand strong while supply continues to fall. Prices continue to climb.
The sales count was almost identical to July and an amazing 61% higher than August 2010.
Pending sales are down 3.3% over last month but are still 49% higher than last year.
Supply is still falling fast, down 7.9% in the last month and 23.5% in the last quarter.
Homes between $100,000 and $200,000
Supply down but demand is down too. Pricing has now remained stable for thirteen months.
Supply has fallen another 3.6% in the past month and is down 15.6% when compared with April and 46.9% compared with August 2010.
Short sales and pre-foreclosures now comprise over half the active listings and REO’s are less than 15% their lowest share for several years.
Demand continues to decline, but sales are up 13.5% compared with last year while pending sales are up 6.5%.
Homes between $200,000 and $400,000
Supply stable and demand fading. Pricing is stable but could weaken over the near term.
The supply of single family homes priced between $200,000 and $400,000 dropped by only 0.6% between July 26 and August 26, much less than the other price ranges.
However, it is down 8.7% over the last three months and 33% over the last year.
Over the last month REO supply fell by 1.8%, while short sales and pre-foreclosures fell by 0.3% and normal listings fell 0.5%.
Homes between $400,000 and $800,000
Supply now stable but demand is weaker. Sales prices may lose the stability established over the past year.
Single family homes between $400,000 and $800,000 have seen active listings stabilize at at just above 1,900 over the last month, but this is down 31% compared with this time last year.
The sales volume weakened noticeably in August, with monthly sales down 15% compared with July but up 2.6% compared with August 2010.
Months of supply now stands at 6.1 months up from 5.2 last month.
Homes over $800,000
A weak market. Demand is now falling faster than supply and prices are declining.
We have just experienced another poor month for the luxury market.
Admittedly the monthly sales rate was 3% higher than last year, but pending sales are down 18% compared with last August and 14% lower than last month.
Months of supply is at 14.3 months, while days inventory edged downward to 392 which compares favorably with the 497 we measured twelve months ago.