Mav Realty

WELCOME TO THE NEW YEAR! I wish you the best for 2009.  For many, it is hard to imagine that it couldn’t be better than 2008.  Many people have experienced hard times this past year, and as a Realtor I have seen it first hand.  I won’t be so bold as to make predictions for the coming year, but I am going to tell you where we have been and what that might mean for the coming year. 

I have said it before; statistics can be used to prove just about any point, no matter what side you are on.  With that in mind, I am trying to keep this as simple as possible.  I could tell you about the differences year over year for the last month as that would be the most up to date.  But that still won’t show the whole picture. 

All of the following statistics represent the full year 2008 vs. the full year 2007.  All statistics are drawn from the Arizona Regional Multiple Listing Service (ARMLS).  The first group represents only single family detached homes.

The total number of new listings to come on the market remained flat year to year.  This is a somewhat positive sign given the number of foreclosures and distressed properties.  The total number can be distorted though, as it doesn’t recognize the same property being re-listed more than once.

A positive sign shows that the total number of closings increased 19% from 2007 to 2008, from 43,921 to 52,522.  The dollar volume of those sales decreased by 16% however, reflecting the overall decrease in pricing.  The average sale price decreased 30% year over year, while the median price declined 24%.

The following statistics reflect all residential listing data in ARMLS, including lots, condos, single family etc.  The total number of listings as of 1/1/09 sat at 56,658, a decrease of about 3% from the same time last year.  Total sales in the month of December increased by 66.4% year over year.  Total sales for the year increased 10.1% year over year.  The large gains in the last half of the year were mitigated in the losses of the first half.  The bright spot is that activity picked up later in the year. Inventory levels in terms of months supply decrease approximately 40% for December year over year.  Median sale prices dipped 24% year over year, while median list prices dipped 26.4%.  Sale price as a percentage of list price remained steady at 96%

 Much of the increased sales activity of the second half of 2008 comes from investors who realized that there are some tremendous bargains available, especially for cash flow properties.  The first ones back into the market are the investors.  The average homebuyer should pick up on this as well.  Combine aggressive pricing with historically low interest rates, and it makes a perfect time for the first time buyer to move forward.  No one expects that 2009 will be much better than 2008, but unless the US falls into a true depression, the expectation is that pricing will stabilize.  There most likely won’t be a true recover before 2010.  For the average homeowner that will stay in a property for a few years, the current climate of low prices and low interest rates makes this a good time to buy.  There are those who are concerned about buying because of the possibility of further decline in pricing.  There is no solid data to show with certainty that they will move either way.  A home is an investment, any way you look at it.  It must be weighed for its risk and return, even if it is your primary residence.  But unless your employment status is in question, it may just be the best choice.

A new round of foreclosures is anticipated with numerous special loans resetting this year.  The question will be whether the lenders will continue to be willing to re-negotiate these, as some have started to do.  If so, we may be able to see a small decline in inventory for 2009. 

Once again, all the best for the New Year.

Adam Tarr, ABR, RSPS, e-PRO
RE/MAX Excalibur
Scottsdale, AZ
480-236-7374

adam@WeAreAZRealEstate.com