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Phoenix Real Estate Market Report ~ February 2014

As you can see from the first chart above, Position Realty Market Index, the first time home buyer tax credit created a great deal of demand in the market similar to the real estate boom from 2004 to 2006. Currently the numbers of transactions are slowing down as a result there is an increase in inventory because the number of listings is not being purchased at a fast enough rate.

Since March 2013 (12 months ago), the average sold price has increased approximately +6.9% (up from last month), the average days on market have increased approximately +22.5% (up from last month) and the number of transaction has decreased approximately -29.5% (down from last month). The month of November showed signs the average sold price was starting to decrease and this trend has continued throughout the month of February. The current average sold price is approximately $242,000 which is down -2.3% from last month at $247,000. Also, the current number of transactions at 4,651 in the month of January has never been this low since April 2008. If this trend continues throughout the year it could be very bad news for real estate prices. Hopefully the average sold price, average days on market and the number of transaction will reverse with the spring / summer buying season.

The volume of REO purchases since March 2013 (12 months ago) has decreased approximately -41.4% and the volume of short sales have decreased approximately -75.4%. Since October 2013 the volume of REO purchases has increased approximately +18.3. The volume of REO purchases is rising again because Fannie Mae and institutional lenders have been holding onto inventory and they are starting to release their inventory at a faster rate. The volume of short sales are still down but REO purchases are back on the rise.

Since March 2013 (12 months ago), the number of homes for sale on the market have increased approximately +37.1%. This increase in the number of listings is caused by investors leaving the market and sellers that purchased during the real estate boom are putting their homes on the market to break-even or sell with a small amount of equity. Real estate prices have reached a point where sellers are listing their homes at a faster rate than buyers are purchasing. This may cause a decrease in real estate prices but hopefully buyers will resume their buying trend as we enter the spring / summer buying season.

As more and more sellers enter the market and as more of the supply of residential homes increase, real estate prices may start to decrease (more supply and weaker demand causes prices to decrease). The best time to buy real estate is when there is more supply than demand (buyer’s market). It might not be too late to sell so give us a call to discuss your best selling strategy before it could be too late!!

Position Realty
Office: 480-213-5251

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