Phoenix Market Update - Indepth Look at November 2011 Stats

November sales of 7,146 followed the downward trajectory begun from the high of 11,125 in June. November sales represent a 1.7% drop below October.

 

SALES Year over Year

November sales were 5.3% higher than the same figure in 2010. Sales from October to November dropped in nine of the previous ten years with 2011 as no exception to the typical fourth quarter pattern.

 

NEW INVENTORY

New listings added to the market have been following a downward trend line since April.  November’s new listing figure of 8,428 is the lowest since December of 2004 (7,117). At its peak in March 2006, new listings hit the 16,686 mark. November’s figure falls 50.5% below that high. Declines in new listings added to the market in the Valley’s current climate is seen as a positive metric.

 

TOTAL INVENTORY

Total listings declined a mere 1.7% in November to 26,798. The overall trend line for total inventory in 2011 has been downward characterized by a steep decline from January’s high of 42,881 to July’s 27,655, followed by a more gentle fall between August and November. Most striking is the 41% decline of November’s new inventory total from the same figure in 2010.

 

MONTHS SUPPLY OF INVENTORY (MSI)

Total market wide month supply of inventory increased again in November to 3.75. While this is still under 4 months, often seen as the benchmark for a seller’s market, it continues the upward trend started from a low of 2.62 months in July. Market wide MSI is seen as a barometer of market health and should not be used in predicting MSI in smaller market niches.

 

NEW LIST PRICES

Average new list prices, which fueled optimism in September and October with an upward tilt, turned downward by 3.3% in November to $222,400. The median list price declined only .8% to $137,900 in November. The decline, while slight, is disappointing to those hopeful of a restoration of the Valley’s pricing.

 

SALES PRICES

Sales prices offered more encouragement than list pricing in November. The average sales price rose 4.7% to $161,600, while the median sales price rose 2.7% to $115,000.  

 

FORECLOSURES PENDING

Foreclosures pending continued on this year’s downward trajectory started from the high of 40,641 in January to 22,389 in November. The accelerated rate of reduction experienced from January through July eased from August to November. The Valley’s foreclosures pendings hit its all time high of 50,568 in November 2009, which puts this month’s figure of 44.2% of the high in a positive light. Declines in foreclosures pending foreshadow declines in actual foreclosures and ultimate market recovery. This metric is moving in the right direction.

 

DISTRESSED SALES

Distressed properties, a composite of short sales and lender owned sales, lie at the heart of the Valley’s depressed pricing. Distressed properties as a percentage of actual sales reached a market high of 74.1% in September 2010. In November distressed properties (4,246 ) represented 59.4% of total sales, the first time that its percentage of total sales has fallen below 60% in recent years. Short sales, which had been consistently eclipsed by lender owned sales, appear to be gaining momentum. The decline in actual foreclosures coupled with a rise in short sales indicates that more homeowners are able to dodge foreclosure in favor of short selling. This is positive news for homeowners having difficulty making payments who are caught in homes where the property value is lower than the mortgage amount.

 

AVERAGE DAYS ON MARKET (DOM)

Market wide average days in market fell to 90 days in November, a level not seen since October and November of 2009. Market wide days on market is a barometer of overall health and not indicative of average days on market in smaller market niches.

 

As November marches toward the close of the year we are left with the familiar pattern of two steps forward one step back characteristic of 2011. This month has some positive news in the gain of shorts sales over foreclosures in the distressed property make up, the decline of distressed properties as a percentage of actual sales, reduction in the average days on market, a drop in total inventory and foreclosures pending and a continued reduction of new inventory added to the market. Yet, we saw rise in the MSI, a decline in sales and the continued lackluster performance of the median and averages prices, both listing and sales. Some metrics can be explained by seasonality typical of the fourth quarter.