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Current Market value is the price of a property that is arrived at by comparing several of the same type homes in the same size/age/condition, with some adjustment for certain amenities, that have sold within the past 3 months (Today we use 3 months) In a regular market where prices move slower, we will use 6 months
So if a house is priced at the current market value then it could be said that is it's "market price".
I got this definition by practical experience in Toronto. Whatever textbook definition you're using to define the Phoenix market, doesn't overwrite what the reality is. I can quote ton of economic textbook definitions to describe what's happening in the U.S. economy and based on those theories perdict what's supposed to happen in future but we both know that doesn't mean much.
Toronto for the past 2 years has been a sellers' market. I bought a house last year while I sold my old one when for every house sale in the Greater Toronto Area (GTA) there were multiple offers. I had my house appraised by the bank last week and it has appreicated 38% since last year. The inventory is very low and there's more demand than supply.
In Phoenix on the other hand, there are tons of houses for sale at various prices. Even if there are multiple offers on one house, I can just simply walk away and find another house at the price I like, that's not a Sellers' market no matter how you try to justify it.
I got this definition by practical experience in Toronto. Whatever textbook definition you're using to define the Phoenix market, doesn't overwrite what the reality is. I can quote ton of economic textbook definitions to describe what's happening in the U.S. economy and based on those theories perdict what's supposed to happen in future but we both know that doesn't mean much.
Toronto for the past 2 years has been a sellers' market. I bought a house last year while I sold my old one when for every house sale in the Greater Toronto Area (GTA) there were multiple offers. I had my house appraised by the bank last week and it has appreicated 38% since last year. The inventory is very low and there's more demand than supply.
In Phoenix on the other hand, there are tons of houses for sale at various prices. Even if there are multiple offers on one house, I can just simply walk away and find another house at the price I like, that's not a Sellers' market no matter how you try to justify it.
My definition is the industry standard, not just in Phoenix, but the real estate industry.
You are quite welcome to have your own definition, along with the definitions that others have come up with.
And if you believe Phoenix is not a Sellers market right now, then walk a couple week in my clients shoes who are having a difficult time buying a home because of being out bid by multiple offers. You may change your mind.
Next week it may not be a Sellers market, but my disappointed buyers can definitely tell you that today it is.
I don't think you can use the old 6 month rule to determine if it is a buyer's or seller's market. While that was the norm for many years; things are anything but normal now. The realtors love to talk about the multiple offers, but they are overlooking the tremendous amount of bloodshed. If I had a used Toyota, and priced it low enough (below market) on CL, the rats would come out of their cages, and I would get 30 calls before 7 am on a Sunday morning. OTOH, if I listed it at KBB full retail, I might get one call for the whole week. Now, more than ever, listing agents are pricing properties low enough to try and get the bidding going--they just love that sense of urgency BS.
Also, don't forget that even with a 3 or 4 month supply reported, that doesn't factor in the shadow inventory. Anybody in a neighborhood that has been hit hard, and bought at or near the top, has at least considered mailing in the keys--those who have lost their jobs, have no choice.
I now see people that bought in 2008, that are seriously under water. The guy behind me paid 140,000 in June 2008....I'm sure it would get multiple offers too--at 29,000. An educated person can pretty easily avoid the hardcore con-artists, who seem to be busy going after the elderly. However, it is much more difficult to avoid the well intentioned, enthusiastic, ignoramuses that our families and this country are populated with. Go ahead, go buy a nice new Chevy Volt, and a stucco monstrosity out in the exurbs. Enroll in U of Phoenix, get your MBA and become a bank VP.......problem is you might be paying for these horrendous decisions for the rest of your lives.
I don't think you can use the old 6 month rule to determine if it is a buyer's or seller's market. While that was the norm for many years; things are anything but normal now. The realtors love to talk about the multiple offers, but they are overlooking the tremendous amount of bloodshed. If I had a used Toyota, and priced it low enough (below market) on CL, the rats would come out of their cages, and I would get 30 calls before 7 am on a Sunday morning. OTOH, if I listed it at KBB full retail, I might get one call for the whole week. Now, more than ever, listing agents are pricing properties low enough to try and get the bidding going--they just love that sense of urgency BS.
Also, don't forget that even with a 3 or 4 month supply reported, that doesn't factor in the shadow inventory. Anybody in a neighborhood that has been hit hard, and bought at or near the top, has at least considered mailing in the keys--those who have lost their jobs, have no choice.
I now see people that bought in 2008, that are seriously under water. The guy behind me paid 140,000 in June 2008....I'm sure it would get multiple offers too--at 29,000. An educated person can pretty easily avoid the hardcore con-artists, who seem to be busy going after the elderly. However, it is much more difficult to avoid the well intentioned, enthusiastic, ignoramuses that our families and this country are populated with. Go ahead, go buy a nice new Chevy Volt, and a stucco monstrosity out in the exurbs. Enroll in U of Phoenix, get your MBA and become a bank VP.......problem is you might be paying for these horrendous decisions for the rest of your lives.
Use what you like. Make up the most sophisticated formula to determine your definition of what constitutes a balanced, buyers or sellers market, and have fun with it.
There are several other theories on this thread on how to determine what constitutes a balanced, buyers or sellers market. Put them all together and come up with a fantastic new market gauge.
However, the fact is, whether it's a buyers market or a sellers market does not take into account "how it got there". That doesn't matter.
It only depends on the current "supply and demand" at the current price levels.
If there is a 3 months supply of $200,000 homes in one city, and there are multiple buyers making offers on those properties. It is a Sellers Market.
It doesn't matter if the house was a $5 million dollar property last year. Today, at the market value price of $200,000 it is having buyers compete to buy the house. Therefore, today it is a Sellers Market.
I don't think you can use the old 6 month rule to determine if it is a buyer's or seller's market. While that was the norm for many years; things are anything but normal now. The realtors love to talk about the multiple offers, but they are overlooking the tremendous amount of bloodshed. If I had a used Toyota, and priced it low enough (below market) on CL, the rats would come out of their cages, and I would get 30 calls before 7 am on a Sunday morning. OTOH, if I listed it at KBB full retail, I might get one call for the whole week. Now, more than ever, listing agents are pricing properties low enough to try and get the bidding going--they just love that sense of urgency BS.
Also, don't forget that even with a 3 or 4 month supply reported, that doesn't factor in the shadow inventory. Anybody in a neighborhood that has been hit hard, and bought at or near the top, has at least considered mailing in the keys--those who have lost their jobs, have no choice.
I now see people that bought in 2008, that are seriously under water. The guy behind me paid 140,000 in June 2008....I'm sure it would get multiple offers too--at 29,000. An educated person can pretty easily avoid the hardcore con-artists, who seem to be busy going after the elderly. However, it is much more difficult to avoid the well intentioned, enthusiastic, ignoramuses that our families and this country are populated with. Go ahead, go buy a nice new Chevy Volt, and a stucco monstrosity out in the exurbs. Enroll in U of Phoenix, get your MBA and become a bank VP.......problem is you might be paying for these horrendous decisions for the rest of your lives.
This is a great post. I don't understand why certain concepts are so difficult to understand for some people. If you price a home low enough, of course it's going to receive multiple offers. The whole "inventory is dropping with a follow-up implication that home prices will rise" is old hat. They've been preaching that line for the last 3 years. If people had listened to the realtors who preached that, they would have lost a lot of money.
Quote:
Originally Posted by Speedian
In Phoenix on the other hand, there are tons of houses for sale at various prices. Even if there are multiple offers on one house, I can just simply walk away and find another house at the price I like, that's not a Sellers' market no matter how you try to justify it.
There were 6,098 distressed property sales (HUD, REO and Short Sales) during April 2011 which represented 64% of sales and does not include the investor Fix and Flip properties estimated to be 40% of the remaining sales.
Only 25% of sales, are homes owned by private sellers selling their own home (not short sales).
When 75% of all home sales are what are considered distress sales, people are going after bargains. They are making offers, where they think they can steal the property. Multiple offers are coming in, only when the people think they have found a property that is a real steal.
Median Sales Price $85,000 -19.2%y-o-y
Average Price/sqft $79 -44%y-o-y
April 2011 Compared to April 2010 - Single Family Detached Home Sales are UP 4% from a year ago, Time to Sell has increased to 86 days. Time to sell is computed on how long the homes has been on the market from day 1 to sale date. That does not show how long homes owned by private owners that are not selling have been on the market. In other words, it averages 86 days to sell foreclosed homes and short sales, flip homes the owner wants to dump, and a few private sales.
Average Home Sales Price is DOWN 6% to $181,002.
Phoenix Real Estate Market is considered a Seller's Market based upon a 2.9 month supply of unsold Phoenix homes and foreclosed Phoenix homes on the market in the MLS based upon March 2011 residential resale rate of 9,479 homes per month with a current inventory of 27,076 ACTIVE properties for sale.
CAUTION: Metro Phoenix has a "shadow inventory" of nearly 100,000 homes, the kind that market watchers sometimes fear could flood the region's long-suffering housing market and drive down prices.
These homes are either in foreclosure or the owners are behind on their mortgage payments, signaling that the houses could eventually join the supply of properties offered by lenders for sale at a deep discount. Foreclosures have been going down lately, while regulators and lenders rewrote the rules for foreclosure and how they had to be conducted. The foreclosure rate is expected to greatly pick up shortly, and this so called shadow inventory can decimate the Phoenix real estate market.
Phoenix MLS Residential Sales DECREASED 5.2% in April 2011
Arizona Regional MLS data shows there were 9,479 residential sales during April 2011 which is 520 fewer sales than during March 2011, but this is also 3.8% more sales than a year ago during April 2010!
Phoenix MLS Median Price - 58% Decline from our Sales Peak in June 2006
There have been substantial New and Resale home price reductions. The median home price for all residential properties has declined 58% from our all time high of $264,800 in June 2006 to $110,000 in April 2011 - where is has been for the last 3 months.
TRUE DEFINITION OF THE MARKET VALUE OF ANY REAL ESTATE IS: What a ready, willing and able buyer is willing to pay for the property.
THE BUYER SETS THE ACTUAL SELLING PRICE NOT THE SELLER: The seller sets the asking price, the buyer sets the actual selling price.
FACT: When a seller turns down an offer, they are in essence buying the property themselves. Many a seller, has turned down several offers over the past 5 years on Phoenix real estate, and the offers keep getting lower, and lower, and lower. When they gave up and finally accepted an offer, it was far lower priced than they had turned down a couple of months, or a couple of years earlier.
What we are seeing on these threads, are some Realtors trying to talk the market back to good again, using the same tactics that got the area into the crazy period that led to the crash. It is the old, Buy Quick before the prices go up, sales pitch. Hurry up and buy. You have to compete and get the home, before someone beats you to it. Only let them have 4 hours or less to accept the offer, or someone else will offer more and beat you to the property.
Last edited by Kimballette; 06-05-2011 at 04:13 PM..
Reason: discuss the facts, NOT each other
My definition is the industry standard, not just in Phoenix, but the real estate industry.
You are quite welcome to have your own definition, along with the definitions that others have come up with.
And if you believe Phoenix is not a Sellers market right now, then walk a couple week in my clients shoes who are having a difficult time buying a home because of being out bid by multiple offers. You may change your mind.
Next week it may not be a Sellers market, but my disappointed buyers can definitely tell you that today it is.
I'm going to take that challenge. In fact, in 2 weeks I'm coming to Phoenix to buy investment properties, I guess I would have first hand experience and let you know if you're right or not.
I'm going to take that challenge. In fact, in 2 weeks I'm coming to Phoenix to buy investment properties, I guess I would have first hand experience and let you know if you're right or not.
Speedian, you don't have to let me know if I'm right. I know I'm right. But you can share your experience with the rest of the forum. My buyers and I have been experiencing it since the beginning of the year. Other buyers on the forum have also expressed the same experience.
I sincerely wish you much success. There are a lot of buyers picking up what I consider to be great bargains. But then again, I'm just a biased Realtor trying to talk up a market; so what do I know.
It has gotten so difficult for my buyers that I've developed an offer strategy to help my buyers that I never thought I would have to use, especially my investment buyers to counteract the multiple offer situation.
I can use it on traditional and REO's, but out of respect for the sellers of a short sale seller, I won't use the strategy on them.
As I've said before, a market can be on one side today and on the other side tomorrow. We're nearing the summer slow season and I'm hoping the multiple offer situation goes away.
Last edited by Captain Bill; 06-05-2011 at 05:30 PM..
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But you can share your experience with the rest of the forum. My buyers and I have been experiencing it since the beginning of the year. Other buyers on the forum have also expressed the same experience. 
