Market Headlines

Supply continues to fall, though rather more slowly in the ranges above $200,000.
Demand is very strong below $100,000 but is weakening above $100,000.
Average sales price per sq. ft. is starting to look stronger below $100,000.
Pricing is stable or slightly weaker over $200,000 with $400,000 to $800,000 looking strongest.
A sharp deterioration in demand is now evident at the top end of the market.
Foreclosure activity is still declining and REO inventory falling, especially at the lower price levels


New notices of foreclosure are running at their lowest level since 2007 and trustee sales are well down from the levels in March. We have fewer homes in foreclosure than at any time since the middle of 2008. Rumors abound that there is a new tidal wave of foreclosures coming. While I cannot comment on other parts of the county, in Phoenix I see no evidence to support that whatsoever.

Homes under $100,000

Demand extremely strong for the season while supply continues to fall. Prices are starting to climb.
Although sales were down 9% over the last month they remain slightly up over the quarter and are now 77% higher than this time last year.
This supply of distressed properties continues to gradually shift away from REO’s (down 13.8% in the last month) towards short sales and pre-foreclosures (down 7.6% and now 61.5% of active listings in this price range).
REO’s constitute 23.2% of the supply, but 62% of the sales in this sector.

Homes between $100,000 and $200,000

Supply down but demand is down too. Pricing has now remained stable for a full twelve months.
Supply has fallen another 6.1% in the past month and is down 21.1% when compared with April and 43.5% compared with July 2010.
Demand continues to decline, but sales are up 23% compared with last year while pending sales are up 4.6%.
Short sales and pre-foreclosures increased from 24% to 27% of sales.

Homes between $200,000 and $400,000

Demand fading although supply continues to decline. Pricing is slightly weaker.
The supply of single family homes priced between $200,000 and $400,000 dropped by another 4.3% between June 26 and July 26, and is now down 16% over the last three months and 32% over the last year.
Sales were down 15% month to month while pending sales dropped 6% between June 26 and July 26 and are now 16% below last quarter and 10.7% below last year.
Short sales gained market share rising from 19% to 25% of sales.

Homes between $400,000 and $800,000

Supply falling but demand weakening. Nevertheless sales prices are holding better than elsewhere.
Single family homes between $400,000 and $800,000 have experienced a 6.7% fall in active listings in the last month, 21% in the last quarter and 32% in the last year.
Months’ supply now stands at 5.2 months the same as June 26.
With prices gently rising and supply lower than at any time in the last several years, this sector remains in long slow recovery mode.

Homes over $800,000

Supply still declining but demand has weakened faster over two months. Sales prices are no longer rising.
The top end of the market is much weaker now than it was two months ago with demand sharply down.
The good news is that the supply of homes above $800,000 fell another 7.6% last month, 22% over three months and 30% since July 2010.
Active REO’s dropped from 45 to 43 over the last month and these represent 3% of total active listings.