Pending Sales continue to Rebound
New listings off 25% from last January; inventory declining precipitously
Median Pricing up strongly over January 2011
Median Listing Price rising rapidly as well.
Pending: 10,756 ( +427 from last week)
Pending Sfam: 9,342 ( +348 from last week)
AWC: 7,157 ( +156 from last week)
AWC Single Fam: 6,183 ( +120 from last week)
Active: 18,220 ( -236 from last week)
Active Sfam: 14,294 ( -144 from last week)
Closed 1/16-1/22/12: 1,279 ( -69 from last week)
Closed sfam: 1,059 (-51 from last week)
Median Price YTD: $119,900
Listings YTD: 7,173 (-2,470 from same day last year)
Median Listing Price: $144,900 (up from $119,000 in Jnauary of 2011)
Sales are on pace to be off from January of 2011; not unexpected given the relative lack of inventory, especially at lower price levels, where inventory is quickly drying up. The lower number of sales will likely be modest, maybe 400 less or so less, but the median price is also going to be much higher. We can see that right now it is up about 9% from last year at the same time, and I would expect that to rise over the next several months; possibly a slight hiccup in February, but the overall trend is going to be higher. I do expect the raw number of sales to be lighter in 2012, as more people will be opting for new homes as prices rise for resale, and also just because there are not as many "too cheap to ignore" assets for investors to pursue. Phoenix is not done with the foreclosure market by a long way, but as a force inflicted on the housing market, its impact is going to become negligible in 2012. Even a wave of foreclosures now would only likely flatten the price increases that are coming based on a whole year's worth of inventory and listing data. We see it showing up even in the listing data; listing prices are 21% higher than they were a year ago; sellers are more optimistic, and the low priced stuff has already sold.
We are also seeing a strong rebound in Pending Sales in January; we are up another 4.1% from last week. That is a fairly significant increase, and if it foretells what is going to happen in the Spring Buying season, Buyers will need to be prepared to fight for the home they want. Right now, sale prices are still historically ridiculously low, and many homes are being bid up over asking price. I have written 8 offers in the last few months that have been lost to other buyers who wanted the property more. It is the nature of things right now, and competition is only going to get sharper in the next few months.
Another quick note on inventory: I would have expected all of January to build inventory, but we are instead seeing sharp reductions. If March is only a mediocre sales month at 90% of last year's sales, we will still see our market at less than 2 months worth of inventory. If we have a blowout month, which I don't expect due to this very lack of inventory, but let's just say it is up to the 10K in Sales, we will be dangerously low on inventory, and prices could jet quickly. Builders are unprepared for this, and we also have to realize that most construction occurs at the edges of town, which doesn't help the bulk of buying pressure. There will be some who are happy to move to the outer suburbs, but more likely prices will shoot up.
Expect inventory to keep falling; expect prices to continue rising, and a sea change in what people say about real estate in Arizona.
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