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Phoenix Residential Real Estate Market Report ~ March 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 April 2013 (12 months ago), the average sold price has increased approximately +10.6% (up from last month), the average days on market have increased approximately +19.1% (down from last month) and the number of transaction has decreased approximately -23.6% (up 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 but in the month of March the average sold price and number of transaction went up. This is not an indication of a market reversal until there have been two to three consecutive months of upward pressure on average sold price, DOM and number of transactions. The current average sold price is approximately $257,000 which is up approximately +6.3% from last month at $242,000.

The volume of REO purchases since April 2013 (12 months ago) has decreased approximately -50.2% and the volume of short sales have decreased approximately -75.4%. Since October 2013 the volume of REO purchases has increased approximately +8.2%. 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 April 2013 (12 months ago), the number of homes for sale on the market have increased approximately +45.2%. 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).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. Give us a call to discuss your best investment strategy, TODAY!!

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