Mav Realty

May has come and gone and summer will be here soon.  In these difficult economic times many people are happy to see the time fly fast, as it means we are that much closer to recovery.  Even better, the statistics for the Phoenix area real estate market provide some very much needed good news.  Not only are the temperatures heating up, but so is the market.  May continued the upward trend that we have had going all year.  Sales were up, inventory is down, and an even better number…the median price went up for the first time in many, many months.

The information below is sourced from ARMLS data and reflects status as of May 31(9AM). All data reflects only residential real estate, not lots, land or commercial.

Total = entire ARMLS area, SFD= single family detached

Median pricing, which is the statistic most quoted in the media had some fantastic news.  The Median for May was up 4% over April at $119,900.  While this figure is 42.6% lower than May of 2008, it is also the first time this year and well into 2008 that the decrease year over year was lower than the month before (April year over year decrease was 46.3%.  This is a huge market regarding the pricing trend.  You can certainly expect to hear from many media sources that we have hit the bottom when they see this statistic.  I won’t be so bold as to say that myself, as we still have a long road ahead of us, but I do feel that all of these stats and what I am seeing in the day to day market do bode well.  I have been telling clients that, in my opinion, I think we have seen the bottoming of prices.  That doesn’t mean we won’t see any more negative statistics, but I feel that in most parts of the market, we won’t see prices go lower than where they are now.

 The strongest segment of the market at this time seems to be the under $100K property.  These are being snapped up at a furious rate, mostly by investors looking at the tremendous upside potential for the long haul.  In fact, bidding wars are a common element in this segment.  It is very common to see a couple dozen offers submitted with prices being bid up substantially from the list price.  Don’t think that the lenders aren’t taking note.  They are no longer so willing to just take the first bid.  As prices rise there is less competition, but prices are remaining firm.

Inventory levels also decreased again, with all residential inventory down under 35,000 in ARMLS, and Single family detached down under 27,000.  These numbers are starting to approach what would normally be considered a balanced market.  There are too many variables with the economy to say its balance yet, but the rules of supply and demand will take hold if we continue to go lower. May 2009 inventory report ARMLS

On the other hand, there have been a couple changes recently that will also affect the market, and it will be interesting to see how things play out.  We should see a spike in inventory levels in Early June, as Fannie Mae’s self imposed moratorium is over and they are releasing a lot of REO properties to the market.  Additionally, they are trying to increase true homeownership to individuals, and won’t look at investor offers for a few days, to give every opportunity to owner occupying buyers. This will be interesting on many levels, as one goal of any company is to maximize the profit (or in this case lessen the loss).  What will happen if they see that they can sell them for higher prices to investors?  I don’t know that would be the case, but what if?

If there any specific statistics you would like to know about, just let me know at adam@WeAreAZRealEstate.com.

Have a great June!