Pending Sales Hit 13K- high for the year.
Listings fall again
Sales to be less than last April due to lack of acceptable inventory
Pending Sales: 13,022 ( +256 from last week)
Pending Sfam: 11,253 ( +217 from last week)
AWC: 7,950 ( -54 from last week)
AWC Sfam: 6,916 ( -48 from last week)
Active Listings: 13,446 ( -164 from last week)
Active Sfam: 10,420 ( -137 from last week)
Closed 4/16-4/22: 1,964 ( +280 from last week)
Closed Sfam: 1,626 ( +228 from last week)
Listings This month: 7,420
Median Price through April 24: 137,000 (+7,100 from March 2012, +27,000 from last April)
Ryness Report Index: .87
Pending sales rose past 13,000 for the first time this year, as sales gear up for May and June. Sales continue to show good strength in the Phoenix market. Sales are trending less than last year, but the median price is up 24.5% from last April. It is likely that we will continue to see rising prices for homes through the summer, at least.
Its also being noticed nationally. This week, Case Shiller noted that Phoenix prices have risen 5 straight months, counter to the overall US market continuing to fall for the past six. This is even more telling in that context; national weakness, yet Phoenix is improving rapidly. Might we have our mojo back?
More evidence that the nation is taking note: The economist for Zillow is forecasting Phoenix to lead the nation in price growth over the next year. He is forecasting a growth of 6.5% from March 2012 to March 2013. His guess is in fairly safe harbor, seeing as how we have gained 5.4% from March to April ((137,000-129,900) /129,900= 5.4% )
As I already noted, pending sales are still rising; they might peak out at just over 13,000, but that is a very strong indicator of good sales in the next few months. We are starting to see that active listings is starting to hit a floor; it is still falling, but the principle of elasticity is coming into play, and you just can't expect the inventory numbers to continue to fall to zero. The number of new listings should start to increase to meet the demand as prices rise high enough for discouraged sellers who can maybe make a buck or two at these higher prices.
The other release valve for this much stronger demand is in new home sales. Sales were a little softer this past week in the index, but overall it is still much stronger than it has been in the past 5 years week over week. .87 looks pretty good compared to the past years. The last 5 readings for the index for this past week:
 |
| Wittmann Active Listings |
2007: .70 2008: .37 2009: .30 2010: .41 2011: .37
New home sales are getting stronger, and as they do, the land market is also improving. One of the areas that we follow a lot made some national news last week, when CNBC interviewed Michael Ripson of Ripson Homes, about his Sonoran Acres development in Wittmann/Surprise. You can see the interview here. Diana Olick, who covers real estate for CNBC, also wrote an article about the Phoenix housing market, in which she quoted Mike. Here that article is.
I think Ripson was being fairly truthful about the conditions, and not just being a salesman. The number of homes in Wittmann that are available has fallen by about 80 percent over the last few years, and increased sharply in price, back to over $200,000 for a nice custom on an acre. Here is a map representing the available listings in Wittmann of homes on an acre. Not a deep bench of homes if you want an acre of land in a rural setting, and traditionally, that is a popular kind of home in this market.
We are following Ripson closely as wee have naturally had a lot of interest in the Sonoran Acres project over the last several years, as we have a lot of inventory of lots in the area. We are fortunate that we have a lot less money into the lots that Ripson does, but we want him to be very successful there, as it will attract other builders to the area if they see him selling homes. For what he paid for the lots, which I believe was around $80,000, he was looking at a price range in the $300,00+ plus range. He has re-calibrated, and is now going to be selling starting at $200K, and he said traffic is good. He also stated he would be putting up a few more spec homes on the property, so we wish him well. He is having an open house at the subdivision site at 219th Avenue and Patton Road Thursday, April 26th, if you are interested, from 3pm-7PM.
That was not the only bit of interesting news on the land side this week. There was a nice deal for the investor for a project in Pinal County, formerly called Silverado Ranch, near the San Tan Valley. It was already approved for 1800+ lots on 556 acres. It sold for a bargain at $3,100,000. A year or so from now, we will look back in amazement that such a property was available for that price. That is under $1700 per lot for this property! Yet here it is. Granted, you had to buy the whole thing, but it is a steal at that price. They are likely to turn around and make ten times their investment back on that deal, maybe more if they wait it out for more than 5 years.
I know of nothing that good right now, but for the small investor, I do know of a couple of properties that I think are excellent bargains. I am not going to give them away here, but contact me if you want something even $30-$50K for a property with good potential to rise in value over the next few years. I know of a few that I have already checked into that I haven't found a home for yet that I think are really nice. That is not always going to be the case. We are going to wake up one day, and there will be a land market again, and there will be no cheap deals to get into. Right now, like housing was last summer, prices are very cheap as no one has yet realized that as Steve Forbes said, there is a housing shortage in this country. Well, all indications are that nowhere is that more true than in Arizona. He may have been off by one year, but he was right on the money, at least for Arizona.
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