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 due to the increase in inventory since June 2013 but real estate price are continuing to increase.
Since November 2012 (12 months ago), the average sold price has increased approximately +22.5% (up from last month), the average days on market have increased approximately +1.6% (up from last month) and the number of transaction has decreased approximately -11.7% (up from last month). The current average sold price is approximately $254,000 which is back to the average sold price experienced in 2008. Since August 2013, the number of transactions has been decreasing and the number of home for sale has been increase. If this trend continues it could be bad news for the Phoenix real estate market but let’s hope it is just due to the holiday season slow down.
The volume of REO purchases since January 2013 has decreased approximately -51.8% and the volume of short sales have decreased approximately -51.9%. The volume of REO purchases are shrinking because the increase in real estate prices are causing consumer to stop letting their homes go into foreclosure and the existing supply of REO properties are getting purchased at a faster rate.
Since November 2012 (12 months ago), the number of homes for sale on the market have been fairly stable with approximately a +10.1% increase in homes for sale. Since August 2013, the number of home for sale on the market have increased approximately +21.3%. As real estate prices increase, more and more 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 it could be from the holiday slow down.
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).Real estate prices are still at an all time low (near 2008 prices), mortgage rates are still at a historical low and the market is improving both in terms of prices and the overall economy. Time to sell is NOW!! Give us a call to discuss your best selling strategy, TODAY!!