Another Poor Real Estate Report (Phoenix, Maricopa: sales, foreclosure, rent)

[oldtrader]

No it doesn't, in fact Nov 2011 obviously hasn't elapsed yet. What it does mention is data through the 3rd quarter, and this from the Nat'l Assoc of Realtors, a somewhat larger organization with no doubt more resources than any local real estate publication. Will assume the data pulls year over year from Sept '10 through Sep '11.

The figures are from Nov 2010 to Nov 2011. Taking from the first of Nov 2010 to the last day of October, is one year. To being the key word, defining it ends on October 31, 2011.

[rjrcm]

Originally Posted by actinic

...and this from the Nat'l Assoc of Realtors, a somewhat larger organization with no doubt more resources than any local real estate publication. ...

You give NAR too much credence. The NAR is just looking at MLS data, and it's not clear what areas of metro Phoenix they include. The "local publication" (Cromford Report) is much more extensive, including non-MLS sales data, with much more in-depth analysis than provided by NAR.

While NAR undoubtedly is a much larger organization, they are also analyzing data from all states, which dilutes their focus on Phoenix. Cromford Report only focuses on metro Phoenix.

[MN-Born-n-Raised]

Originally Posted by rjrcm

You give NAR too much credence. The NAR is just looking at MLS data, and it's not clear what areas of metro Phoenix they include. The "local publication" (Cromford Report) is much more extensive, including non-MLS sales data, with much more in-depth analysis than provided by NAR.

While NAR undoubtedly is a much larger organization, they are also analyzing data from all states, which dilutes their focus on Phoenix. Cromford Report only focuses on metro Phoenix.

If a person wants to believe that home prices are falling, they will find plenty of articles to reinforce their point of view. See Patrick.net for instance. This site is dedicated to the housing crash.

[Captain Bill]

Originally Posted by actinic

No it doesn't, in fact Nov 2011 obviously hasn't elapsed yet. What it does mention is data through the 3rd quarter, and this from the Nat'l Assoc of Realtors, a somewhat larger organization with no doubt more resources than any local real estate publication. Will assume the data pulls year over year from Sept '10 through Sep '11.

To my knowledge there is no data service that utilizes more resources, nor more compiled data on the Phoenix Metro real estate market than the Cromford Report.

Their data is factual, and their commentary is balanced.

The information that I post here from the Cromford Report is a drop in the bucket compared to the wealth of data that is available on their site through a subscription. Many of their reports are updated daily; others weekly or monthly.

They are currently showing that Phoenix Metro is seeing a significant rise of 2.8% in the single family monthly average price per sq. ft over the same time last month. And this is the time of year that these prices should be decreasing.

People trying to buy bank owned homes will recognize this surprising fact: The average price per square foot for active single family bank owned homes in Greater Phoenix has increased by almost 28% since March, from $69.27 to $88.53.

Of course they shouldn't be surprised because the inventory of bank owned properties have been reported to be declining all year.

• 19,192 Inventory of bank owned homes on May 25, 2011
• 9,917 Inventory of bank owned homes on Nov 25, 2011
• That's a decline of 51.7% in 6 months.

However, the significantly declining bank owned inventory is not information that any other real estate data reporting entities have bothered to gather and publish. The Cromford Report updates that bank owned inventory information on a daily basis. It's actually a separate subscription service from their regular subscription. I subscribe to that additional service because of the importance of having that information available to me and my clients.

And the luxury market has been having more sales, with more being traditional sales. In the first three weeks of November there were 22 single family residence sales in Paradise Valley

• Only 2 were short sales
• No bank owned sales
• The total sales dollar amount is $35M so far with another week to go.
• For the full month of November 2010, there were only 10 traditional sales, plus 6 short sales and 5 bank owned sales.

And the sales are continuing. One of my relocating cash buyers from CA signed a contract on a $729k home (traditional sale) in Chandler on Nov 18. Yesterday I accepted an offer on one of my rehabbed homes at the list price of $229,950 in Seville.

[sunluv]

Especially factoring in seasonality, collective recent real estate news is not bad for Phoenix, Just one example:

Phoenix area housing market slips a bit

[oldtrader]

Median Price:

Definition: Median is a mathematical result that indicates that one half of the group is higher and one half lower. Median price of 101 sold homes would be that price which is lower than 50 of the prices and also higher than 50 of them.

Do not confuse this term with the average. They can be quite different for the same sample group. For instance, if you are doing a sold properties report and the homes are very evenly distributed, the median and average might be very similar. However, if the homes sold were weighted more to one end or the other of the price spectrum, then the median and average could be quite different.

And the luxury market has been having more sales, with more being traditional sales. In the first three weeks of November there were 22 single family residence sales in Paradise Valley

When the luxury home sales go up, the median price per sq. ft. goes up. This can even happen, when the price per sq. ft. is declining on the lower priced homes.

This is why the median price per square foot is a poor guide for the overall market. Movement up or down on sales in the luxury market end of the scale, has too much influence on the median prices.

[rjrcm]

Originally Posted by oldtrader

...When the luxury home sales go up, the median price per sq. ft. goes up. This can even happen, when the price per sq. ft. is declining on the lower priced homes.

This is why the median price per square foot is a poor guide for the overall market. Movement up or down on sales in the luxury market end of the scale, has too much influence on the median prices.

In October, there were over 7500 homes sold in metro Phoenix, of which about 2700 where under $100K. There were 204 sold over $500K. Do you really think that those 204 have any significant impact on median price for all homes sold? The median price in this case is more heavily influenced by the high number of lower priced homes sales. The median price for 7500 homes is the price of home #3750 in the set of 7500 homes sorted by price.

[Captain Bill]

Originally Posted by oldtrader

Median Price:

Definition: Median is a mathematical result that indicates that one half of the group is higher and one half lower. Median price of 101 sold homes would be that price which is lower than 50 of the prices and also higher than 50 of them.

Do not confuse this term with the average. They can be quite different for the same sample group. For instance, if you are doing a sold properties report and the homes are very evenly distributed, the median and average might be very similar. However, if the homes sold were weighted more to one end or the other of the price spectrum, then the median and average could be quite different.

When the luxury home sales go up, the median price per sq. ft. goes up. This can even happen, when the price per sq. ft. is declining on the lower priced homes.

This is why the median price per square foot is a poor guide for the overall market. Movement up or down on sales in the luxury market end of the scale, has too much influence on the median prices.

The Median price can be skewed on the high side by more high price sales, or on the low side by more low price sales.

However, as rjrcm pointed out, in the Phoenix Metro area we have a larger number of low price sales, and that large number of low price sales is actually skewing the Median price low. Therefore, in most cases here, the price per square foot is a better measure of our Phoenix Metro market.

Oldtrader, you probably missed the part in my previous post that showed:

quote = Captain Bill....The average price per square foot for active single family bank owned homes in Greater Phoenix has increased by almost 28% since March, from $69.27 to $88.53.

You also seemed to miss the important part of this statement:

quote=Captain Bill....And the luxury market has been having more sales, with more being traditional sales. In the first three weeks of November there were 22 single family residence sales in Paradise Valley

So please allow me to run through that again.

• Only 2 were short sales (short sales declined dramatically there)
• No bank owned sales (This is to be expected given the drastically declining bank owned inventory)
• The total sales dollar amount is $35M so far with another week to go.
• For the full month of November 2010, there were only 10 traditional sales, plus 6 short sales and 5 bank owned sales.

1)....First of all that 35 million dollars is not going to be enough to skew the Median price.
2)....The number of sales by the end of November will have increased by a few homes, possibly 3 or 4, showing an increase of interest in buying high end homes.
3)....Then a very important factor is this: Of the 21 homes in PV sold this month, 19 of them were traditional sales, compared to only 10 traditional sales there in 2010. There were only 2 short sales, and zero bank owned.

Then I also reported that the number of bank owned homes has declined by 51.7% from 19,192 down to 9,917 in the past 6 months. And it continues to drop.

Today the number of bank owned properties is down further to 9,821.

quote= Oldtrader....When the luxury home sales go up, the median price per sq. ft. goes up. This can even happen, when the price per sq. ft. is declining on the lower priced homes.

However, we all know that the price per square foot is is Increasing on the lower priced homes. They are not declining.

In Greater Phoenix, the price per square foot has Increased by 28% since March of this year.

Here's another bit of positive news, and it also uses Average Sales Price per Square Foot.

$83.33 August 1, 2010 Price per square foot, Phoenix Metro Area
$83.48 November 25, 2011 Price per square foot, Phoenix Metro Area

So, while the Metro Area Median price per square foot is still showing flat, the price per square foot for the past year has shown a .02% increase. Granted this is a small overall increase, but it is not a decrease.

Of course we still have 5 weeks left in this year and anything can happen.

[MN-Born-n-Raised]

After this August's stock market crash, I would have guessed that housing sales would have retreated because consumer confidence took a dive. The Phoenix housing market definitely held in there better than I would have expected. Hence, my gut says it is going to be a very solid Spring. IMHO, the super low interest rates probably has played a part in all of this fall demand. Bill. What percentage of people are paying cash these day in comparison to a year ago?? I'm curious.

[S. Chris Webb]

After this August's stock market crash, I would have guessed that housing sales would have retreated because consumer confidence took a dive.

Take into account many investors have lost faith in the stock market and are further diversifying into the housing market.