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I disagree with the OP's approach. He or she pasted an article and tried to draw conclusions from it. You cannot draw conclusions based on an increased number of home sales. As Phoenixxx and others correctly pointed out, if your decline was sharp then your recovery will similarly be sharp. And sales will naturally increase as housing prices continue to decrease as the median decreased in the last month. I like to make decisions based on facts and not headlines. If I'm a buyer, there is no way I'm rushing to buy a home as I have yet to see any conclusive evidence that states the housing market has bottomed out.
I think too many posters, including you, live in a world of extremes and miss the central messages of posts. When some of us posts an article showing a good trend or encouraging sign DOES NOT MEAN that all is well and that rash fianancial judgments should be made based on ONE article; this is a continuum of information and will continue to be posted in the future either through thick or thin in order to discuss important factors contributing to our city's financial (real estate) situation. I find it interesting that when someone posts an article with some good news or indicators, Phoenix naysayers and bashers are the first to fly off the extreme end.
As for the marketer with "research" history in real estate, a red flag came up immediately when you omitted the median price for averages that Phoenixxx posted that do not match monthly averages for the city of Phoenix in 2006; one reason could be data manipulation or a sampling of a specific area or inventory where homes did average somewhere well over $300,000.
As a researcher, that should have flagged some questions immediately. The median price can be an ideal, better, indicator of overall market conditions especially in a city like Phoenix and the metro because a representation of property values as a whole are on display and representative of the data. In a city like Phoenix, where home values tend to cluster in large tracts and communities sharing similar values, a median can be a better indicator of market conditions.
No one encouraged disregard for average home prices, but one must consider more carefully how those averages are reached; no time in history has the average price for homes in Phoenix surpassed $300,000! Calling Phoenixxx' conclusions more accurate or "superior" to other posters is concerning, and again the numbers don't add up...
Besides all those mentioned above Phoenix in general was passed the bottom point which was last April-May.
I keep hearing there are huge shadow inventory of houses for almost a year now and it didn't happen..... So when ?????
According to a recent (Dec 17) study by First American Corelogic the shadow inventory increased 55% year over year (sept 08- sept 09) from 1.1M to 1.7M units. http://www.facorelogic.com/uploadedF...ory_121809.pdf
There's also a Nov 10 article on cnbc discussing a coming wave of foreclosures, which banks are holding off on executing. Shadow Inventory Dwarfs Loan Mods - CNBC
Quote:
Foreclosure inventories continued their upward climb. The nation's September 2009 foreclosure rate stood at 3.12 percent - a month-over-month increase of 2.6 percent and a year-over-year increase of 88.9 percent. Among individual states, Florida posted the most troubling results with 10.4 percent of loans in foreclosure, and more than 22 percent of loans reported as non-current. LPS' October Mortgage Monitor also cites large "shadow" foreclosure and REO inventories. The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of troubled loans in an already clogged loan pipeline. Nearly one-third of foreclosures remain in pre-sale status after 12 months - twice as many as the year prior. The six-month average deterioration ratio has risen the past two months to 300 percent, showing that for every loan thatimproves in status, three more deteriorate further. It's that second part I find really disturbing. I know the banks are holding off on putting all those REO properties on the market A) so they don't flood the place and push prices lower, B) so they don't have to sell the properties at the bottom of the market (if you actually believe this is the bottom).
So, to bring this back and relate it to the OP topic, I don't get any confidence from that article citing a 70% year-over-year increase in units sold. There were/are a lot of tax incentives in place spurring sales, there is a lot of inventory on the market, there is a lot more waiting to come on, and prices are still falling.
According to a recent (Dec 17) study by First American Corelogic the shadow inventory increased 55% year over year (sept 08- sept 09) from 1.1M to 1.7M units. http://www.facorelogic.com/uploadedF...ory_121809.pdf
There's also a Nov 10 article on cnbc discussing a coming wave of foreclosures, which banks are holding off on executing. Shadow Inventory Dwarfs Loan Mods - CNBC
So, to bring this back and relate it to the OP topic, I don't get any confidence from that article citing a 70% year-over-year increase in units sold. There were/are a lot of tax incentives in place spurring sales, there is a lot of inventory on the market, there is a lot more waiting to come on, and prices are still falling.
BUT the central question and the reason for the article is for how long and which regions will bare the brunt of those national figures? Since Phoenix has fallen off the top foreclosure lists, sales are up ( by a large figure no less), tax incentives exist through April, prices at lows we've not seen in some time, and unemployment down slightly things can be on a gradual increase for the better (again, not overnight). Since the real estate market is cyclical, all these articles can give insight for future trends based on some historical real estate figures for comparison and new financial trends for differences in situations.
I disagree with the OP's approach. He or she pasted an article and tried to draw conclusions from it. You cannot draw conclusions based on an increased number of home sales. As Phoenixxx and others correctly pointed out, if your decline was sharp then your recovery will similarly be sharp. And sales will naturally increase as housing prices continue to decrease as the median decreased in the last month. I like to make decisions based on facts and not headlines. If I'm a buyer, there is no way I'm rushing to buy a home as I have yet to see any conclusive evidence that states the housing market has bottomed out.
I agree! Thanks to you and the others for jumping in.
As anyone can see, although I am real estate broker I am not out here pining for business telling you to buy homes and visit my blog. My mission in posting the data was to light up the dark corners so everyone can get a firm grasp on reality. I plan on being in the Valley awhile and don't want to live in house of cards stacked by irresponsible journalists and the NAR (and I don't think you guys would want to live that way either.)
Nothing I was posting was intended to be a prediction. The future will inevitably arrive and come to fruition. If I were to sell a home to a client today by nudging them, "we are at the bottom, it says so in the AZ Republic" - I am aware that years will go by and my "commission breath" (LOL MNborn) may be proven wrong. If it is, they won't be calling me in the future - my credibility will be forever in question. I would not have survived over 15 years in this business if thats how I handled myself.
Its important to understand that the lowered sales prices is the ONLY reason the homes are selling. Nothing else has occurred. Things aren't getting BETTER, they are getting CHEAPER! If you don't understand this you could buy a home under the assumption that things are BETTER now, and this is the #1 way to get messed up.
You need to be sure the price you are paying has taken the hit already and that its not a home priced by way of a desperate home seller trying to break even. If there are 2 homes priced at $300K, one used to be worth $575-$600K, while the other was purchased by someone who overpaid 6 months ago. You need to pick the ones that have taken the hit and not the ones priced to clear a mortgage. This is where an honest realtor becomes critical. If anything I find ways to succeed in this market with honesty more than I would by telling people to buy whatever they think is "cute" and "fun" followed by an "I'm sure you'll be fine".
I will clarify that I posted averages not medians because this is the information that was easily visible to me. I do not have a way to calculate the median as quickly as I can calculate the average. I am going to post a new thread and minimize accuracy loss by grouping sales together by price ranges. Such as Under 200K, then 200K-400K, 400K-800K, etc. This way we don't have a few 10 million dollar estates or a glut of $15,000 mobile homes corrupting the whole picture.
Never did I expect to be called a flat out liar and have to debate medians vs. averages. I had never given much thought to which was better until I was put on the spot. I was under the impression that both figures would be so close as to be neglible, but as SolarPicasso points out, they can be far apart when the data is polarized, lopsided and extreme. I personally find the data I post to be right on target to how my own home fits into the picture. It has steadily lost value year after year. I'm in the upper end of the market and expect to lose more.
I take comfort in being able to see pure data and thought some others on here would too. The only other sources on here thus far are polluted by NAR or whoever else doesn't want their preconceived notions disrupted. In no way do I feel that by sharing the average sales prices that I am writing a doom blog to destroy valley home sales. It would benefit me to have things pick up BUT I won't stoop so low as to spread misinformation. I didn't create the average sales prices so don't shoot the messenger.
no time in history has the average price for homes in Phoenix surpassed $300,000! Calling Phoenixxx' conclusions more accurate or "superior" to other posters is concerning, and again the numbers don't add up...
Says who, You? My conclusions were never called superior. The data source was called superior. You posted data specifically to say that I'm lying which came from a 3rd party public spin source that lags far behind ARMLS. This data is up to the minute and live.
I can't believe I took the time to do this, but I posted screen shots of the data I pulled. The number for ARMLS is 602-955-1707. Call them as well and ask them to plug in the same information and they will read you the same results. Its time for you to stop standing in the way of truth. The criteria I used is clearly displaying at the bottom and any realtor can see how to plug in the same values to cross check my work.
If I find a way to post median, I'll do that too. If it shows there is a huge difference between the two, then it can be assumed more correction are in order and its logical to assume that the corrections will go in the same direction it has been until it flattens out.
Last edited by Phoenixxx; 12-26-2009 at 09:59 PM..
I agree! Thanks to you and the others for jumping in.
As anyone can see, although I am real estate broker I am not out here pining for business telling you to buy homes and visit my blog. My mission in posting the data was to light up the dark corners so everyone can get a firm grasp on reality. I plan on being in the Valley awhile and don't want to live in house of cards stacked by irresponsible journalists and the NAR (and I don't think you guys would want to live that way either.)
Nothing I was posting was intended to be a prediction. The future will inevitably arrive and come to fruition. If I were to sell a home to a client today by nudging them, "we are at the bottom, it says so in the AZ Republic" - I am aware that years will go by and my "commission breath" (LOL MNborn) may be proven wrong. If it is, they won't be calling me in the future - my credibility will be forever in question. I would not have survived over 15 years in this business if thats how I handled myself.
Its important to understand that the lowered sales prices is the ONLY reason the homes are selling. Nothing else has occurred. Things aren't getting BETTER, they are getting CHEAPER! If you don't understand this you could buy a home under the assumption that things are BETTER now, and this is the #1 way to get messed up.
You need to be sure the price you are paying has taken the hit already and that its not a home priced by way of a desperate home seller trying to break even. If there are 2 homes priced at $300K, one used to be worth $575-$600K, while the other was purchased by someone who overpaid 6 months ago. You need to pick the ones that have taken the hit and not the ones priced to clear a mortgage. This is where an honest realtor becomes critical. If anything I find ways to succeed in this market with honesty more than I would by telling people to buy whatever they think is "cute" and "fun" followed by an "I'm sure you'll be fine".
I will clarify that I posted averages not medians because this is the information that was easily visible to me. I do not have a way to calculate the median as quickly as I can calculate the average. I am going to post a new thread and minimize accuracy loss by grouping sales together by price ranges. Such as Under 200K, then 200K-400K, 400K-800K, etc. This way we don't have a few 10 million dollar estates or a glut of $15,000 mobile homes corrupting the whole picture.
Never did I expect to be called a flat out liar and have to debate medians vs. averages. I had never given much thought to which was better until I was put on the spot. I was under the impression that both figures would be so close as to be neglible, but as SolarPicasso points out, they can be far apart when the data is polarized, lopsided and extreme. I personally find the data I post to be right on target to how my own home fits into the picture. It has steadily lost value year after year. I'm in the upper end of the market and expect to lose more.
I take comfort in being able to see pure data and thought some others on here would too. The only other sources on here thus far are polluted by NAR or whoever else doesn't want their preconceived notions disrupted. In no way do I feel that by sharing the average sales prices that I am writing a doom blog to destroy valley home sales. It would benefit me to have things pick up BUT I won't stoop so low as to spread misinformation. I didn't create the average sales prices so don't shoot the messenger.
No one called you a liar, but I question your calculations and data. For one, if you were my agent/broker and I was new to Phoenix from a place like Seattle, Portland, or Boston and I saw your "City Of Phoenix" average home price calculation at over $300,000 for 2006 I would question your information and conclusions quickly...That average home price, even at Phoenix' peak, is way too high and more closely resemble homes prices in much pricier locales.
Also, as a real estate broker, you should know that there are almost NO areas in the Valley where a $10,000,000 estate would be next to a trailer park/slum with a "glut of $15,000 homes"...corrupting" the data. Because of that I question the data used to find "comfort in being able to see pure data."
You implore us to believe that "[you] didn't create the average sales prices so don't shoot the messenger" yet you say you "do not have a way to calculate the median as quickly as I can calculate the average." Therefore, perhaps you are not lying but calculating your averages with some misinformation.
No one called you a liar, but I question your calculations and data. For one, if you were my agent/broker and I was new to Phoenix from a place like Seattle, Portland, or Boston and I saw your "City Of Phoenix" average home price calculation at over $300,000 for 2006 I would question your information and conclusions quickly...That average home price, even at Phoenix' peak, is way too high and more closely resemble homes prices in much pricier locales.
Also, as a real estate broker, you should know that there are almost NO areas in the Valley where a $10,000,000 estate would be next to a trailer park/slum with a "glut of $15,000 homes"...corrupting" the data. Because of that I question the data used to find "comfort in being able to see pure data."
You implore us to believe that "[you] didn't create the average sales prices so don't shoot the messenger" yet you say you "do not have a way to calculate the median as quickly as I can calculate the average." Therefore, perhaps you are not lying but calculating your averages with some misinformation.
Wow, this is getting out of control. You are a serious detriment to this thread. I have posted concrete screen shots and displayed they are computerized calculations. I give you the phone number to ARMLS. I encourage other realtors with the same access to cross check it and this is what you have to say now?
I never said that trailer parks were physically next to estates. I said I would group the data by price range in a future thread I intend to create so we don't have the 2 extreme ends of the market included in one set of data. Did anyone else get the idea that I was suggesting Phoenix is a land of trailers next to mansions?
Says who, You? My conclusions were never called superior. The data source was called superior. You posted data specifically to say that I'm lying which came from a 3rd party public spin source that lags far behind ARMLS. This data is up to the minute and live.
I can't believe I took the time to do this, but I posted screen shots of the data I pulled. The number for ARMLS is 602-955-1707. Call them as well and ask them to plug in the same information and they will read you the same results. Its time for you to stop standing in the way of truth. The criteria I used is clearly displaying at the bottom and any realtor can see how to plug in the same values to cross check my work.
If I find a way to post median, I'll do that too. If it shows there is a huge difference between the two, then it can be assumed more correction are in order and its logical to assume that the corrections will go in the same direction it has been until it flattens out.
No, says historical data. With the information you just posted, we can now discuss how you may have come to the conclusion that the "city of Phoenix" average home prices in '06 were over $300,000. First of all, the statistical analysis of the information you have is representative of what inventory is listed under that specific inventory and NOT an analysis of the average price in 2006 for homes in the city of Phoenix. The highest average price for a home in Phoenix peaked in June of 2006 with an average home value under $260,000 that was only realized for a month before beginning a downward trend...2005 was a year in which Phoenix homes saw unsustainable price increases due to investor speculation and sub-prime loans.
No one called you a liar, but I question your calculations and data. For one, if you were my agent/broker and I was new to Phoenix from a place like Seattle, Portland, or Boston and I saw your "City Of Phoenix" average home price calculation at over $300,000 for 2006 I would question your information and conclusions quickly...That average home price, even at Phoenix' peak, is way too high and more closely resemble homes prices in much pricier locales.
Also, as a real estate broker, you should know that there are almost NO areas in the Valley where a $10,000,000 estate would be next to a trailer park/slum with a "glut of $15,000 homes"...corrupting" the data. Because of that I question the data used to find "comfort in being able to see pure data."
You implore us to believe that "[you] didn't create the average sales prices so don't shoot the messenger" yet you say you "do not have a way to calculate the median as quickly as I can calculate the average." Therefore, perhaps you are not lying but calculating your averages with some misinformation.
He just pasted screen shots from the ARMLS so he didn't make up that information. Which of his information are you specifically disagreeing with? It seems like he has provided evidence to support the information he has posted.
Wow, this is getting out of control. You are a serious detriment to this thread. I have posted concrete screen shots and displayed they are computerized calculations. I give you the phone number to ARMLS. I encourage other realtors with the same access to cross check it and this is what you have to say now?
I never said that trailer parks were physically next to estates. I said I would group the data by price range in a future thread I intend to create so we don't have the 2 extreme ends of the market included in one set of data. Did anyone else get the idea that I was suggesting Phoenix is a land of trailers next to mansions?
It is not getting out of control, however, I would implore you, as a broker to verify your information and calculations with a simple google search. Enter maybe, "highest average home price Phoenix 2006" to verify your calculations for future threads and clients. Also, the census bereau gathers such information for tracking trends, you could have easily found that a $300,000 average Phoenix home price did not exist.
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