Real Estate Market Home Sales Update June 2012
Here we are at the beginning of July half way through the year already. How have home sales been progressing so far, you ask? Let’s take a look.
Current Statistics as of July 12th, 2012… There are 43,652 homes of all types on the market (this number does not take into account listings in the AWC or Active with Contingency category).
There are 9,859 homes currently in Pending status (with a contract on them and in escrow).
June saw 3,666 closings.
There have been 43,652 closings since the beginning of the year. That is 7,275 per month or on pace for a 87,304 total closings. Down from last year.
The average sales price of a home went from $86,978 to $124,556. That is a 43% increase.
Wait. What did I just say? A 43% increase. Mmm. Do you see much about this in the news? I haven’t. Do you think clients are skeptical when I tell them that average home prices in the valley have gone up 43%? You bet they are. Why? Because not too many people are talking about it.
Are we seeing buyers put contracts on homes without even seeing them?
Yes. Are we seeing buyers waive the inspection? Yes.
Does it feel a little like 2005? A bit… but with a few twists. Even though I paint a picture of increase in the preceding paragraphs, we are seeing much more caution than we did in the run up of 2006 and on. Yes, we are still seeing multiple contracts on homes, but we are seeing them in a tight group as far as the offer prices go. Occasionally, a buyer has to make a great leap in price in order to “win” the home they so much desire, but they have to pay cash (or at least cash over appraisal).
So, those that have the cash can play this game. This is how markets change. At least in the up markets. Cash is always king. Kash… Sorry, Cash is what drives the market faster than an appraiser will appraise a property for on the increase.
If a property does not appraise for the offer price the buyer can (with the lenders approval) put more cash in the deal. Thereby driving up prices.
Ok, now put yourself in my shoes for a moment. How do you tell your client that average prices have risen 43% since last year. And, that multiple offers are common for the day. And, that buyers are making greater leaps in offer price to get the home they want. And, that inventory remains very low and therefore is considered a sellers market? How do you do that? Well, honestly, I do it directly. It may sound strange since the news is not saying much. It may sound like a sales job, but then numbers are the numbers. The experiences we are having in the “trenches” are the experiences we are having in the “trenches.” We must tell it like it is.
Buyers still think they can sit back on their heels and wait for the perfect home, because they feel the market is soft and slow to recover. Not here in Phoenix metro area.
I always say that real estate is “local” and therefore a specific analysis of a particular neighborhood is needed to see exactly how it stacks up to these average numbers. Two homes can be side by side and yet be in different HOA’s and therefore be quite different as just one example. We do a thorough analysis for our home buyers and sellers before ever talking specifics, believe me.
What I’m writing about today is simply market impressions. How a buyer needs to be nimble and loan ready. Loan ready is having all your paperwork into your lender. Know your buying power. Know what documents you need. The cleaner or simpler the deal is the more appealing it will be to the seller. Remember, they may be looking at multiple offers. How will your stand out?
Sellers – how do you make your home garner multiple offers? It does not just happen because there are few homes on the market for sale. You must make your home appealing. We cover this in several other blogs. A few tips: Get rid of 50% of the “stuff” you have sitting around. Clean. Clean the carpets, get rid of pet dander and smells. Repair. Fix all those items on the honeydo list. Buyers don’t want to plot a bunch of money down so they can have a long honeydo list of their own. That is just a short list.
So, get the word out. 1) The market has changed. 2) The change is steady. 3) The change is driven by those with cash. 4) Investors and first-time buyers dominated the market and are now being helped by those that were sitting on the sidelines as renters. Believe your agent when they tell you that if you like a home you will need to act quickly. So, if you are in the market for a new home be ready to act quickly.
Remember, there are only 10,331 homes on the active market. The market is averaging 4k to 6k home sales a month. We are still in a two months worth of inventory range. This makes it a sellers market. I personally would like to see a more balanced market with approx. 4 to 6 months of inventory on the market. That would put it above 16k homes on the market.
Watch words for the day: Be steady, be nimble.
Let us help you analyze the area you are looking in. We will get very specific, so you can make an informed decision. Knowledge is power, especially in real estate.
We stand ready to help you with all your real estate home buying or selling needs in the Phoenix metro area.
Scottsdale, Phoenix real estate sales and purchases email: scott@scottsdalescott.com
Scott & Sandy Farmer, REALTORS®, GRI
Remember, when it comes to real estate: “It’s A Farmer’s Market”
Realty One Group, LLC, Scottsdale, Arizona
ScottsdaleScott: Scott Farmer, Scottsdale Real Estate Home Sales
Scott Farmer ©2012 All rights reserved.
