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Why You Should Invest in the AZ Real Estate VS Stock Market

Written by Mackey Martin

Market Index

I looked at my son today and asked him a question, “Who is the hottest baseball player in the game right now?”  His answer was short and sweet, “That’s easy, Bryce Harper.”  I spent many of my summers cheering on my two sons who were chasing their dream of becoming professional baseball players, and let’s face it, what little boy doesn’t at one point or another have this dream?  It was different at my house, as two of my kids actually lived out their dream of playing Professional Baseball. They both left the game and unfortunately never made the Major Leagues, but this led them to come join me in Real Estate.  I don’t seem to have the same passion for the game like I use to, but still have great memories of bases loaded, three balls and two strikes and participating in great nail biters, remember “It’s not over till the fat lady sings”  and that is case in point how the real estate market works.  We cycle in and out of bull and bear markets and right now we are in a bull market; as you can see from the “Market Index” above, its running at a solid pace.  It doesn’t matter how you slice or dice it, Arizona makes sense as we are still a very affordable state.   Arizona has many other reasons for being hot other than the weather. . .trust me I remember today why I own a second home in Northern AZ.  When we moved to Arizona in 1991 my husband was an Oil Trader, and I always found him looking at the Weather Channel.  Finally one day I asked, “Why are you so tied to watching this channel” and he responded that living in a state that literally had no weather inclement forced him to look for information nationwide that would help him in trading product.  We were always sunny and it gave him a false view of the weather.  I look at the recent news headlines that Central Texas and parts of Oklahoma are literally floating from the rains that have plagued these states recently, and in Phoenix, AZ we generally get an average rainfall of seven inches a year.  When compared to our neighbor to the west, California, one can imagine why so many people leave that state to come to Arizona for our weather, affordable housing, the Sonoran desert, stimulating mountain views, a small town feel in a big place and let’s not forget the burden of taxes that the Californian shoulder.  Now that is an experience I can live without, how about you?  Let’s just finish by saying how do you rank a state that has the majestic Grand Canyon?

So many times my clients ask me why I feel the AZ Real Estate is a better investment than the stock market.  I have studied and been involved in both throughout my adult life.  My husband was a Financial Advisor and then there was me that “always” wanted to own dirt, thus becoming a Real Estate Agent (go figure that opposites attract).  Let me explain why I have a strong preference for Real Estate over stocks.

Reasons Why AZ Real Estate is better than Stocks

  • Owning a Home Gives You More Control – Look at real estate this way, every piece of property you own gives you a chance to be a CEO. You are able to market the property, raise or lower rent, make any necessary improvements and cut costs as you see fit.  Being an investor in a public or private company means that you will be a minority investor, who has no say in what will be the correct path for the company.  You are required to trust people you have never met.  Overall you still have to deal with the economic cycle, but owning a home allows you more room to adjust when making crucial decisions.  There is not one person who cares about your home more than you do.
  • More Palpable – Real Estate is something you can feel, see and utilize. When everything comes crashing down, you will always have your home.  Real Estate provides you with shelter, and theoretically one could presume sustenance like food and water that is tangible in helping one survive the worst Stock Market crashes.  Also, if inflation happens, buyer beware, land is where you want to be positioned.
  • Tax’s – You are able to deduct interest on up to $1.1 Million in mortgage indebtedness on your primary home; you can also sell your primary home for tax free profits up to $250,000 for singles and $500,000 for married couples if you live in the home for the last two of a five year period. If you are in the 28% or higher tax bracket, it will only help you to own property.  All expenses associated with managing your rental properties are also deductible towards your income.  Limits do apply however, so think of $166,000 a year total as the magic number.
  • Less Volatile – Your home value is constantly cycling, and yes at times you are aware of how the meter is moving be it up or down just due to local or nation news; however there is no daily ticker update like the stock market. You’ve got to live somewhere so decide are you going to pay someone else’s house payments, or are you going to own your own castle to enjoy and create memories.  During the crash of 2009, I held on to my main home in Arcadia (an area in Phoenix/Scottsdale with dominance to larger irrigated lots) which is about as centrally located as a homeowner can get.  It sits just south of one of our more famous mountain ranges, Camelback Mountain.  From the position of my home running east and west along the Camelback Corridor, you will hit every hot button for the consumer from the Biltmore at 24th and Camelback moving east to Camelback Mountain, and then two or three minutes into Scottsdale and the most desired shopping mall in the state, Scottsdale Fashion Square.  I raised four kids in this house, heard the snap of the ball from our batting cage, picked citrus from our 15 plus trees, and experienced a son’s wedding in the backyard under our over sized mesquite tree that my husband planted.  What is the cardinal rule in real estate, location, location, location? I own location and when the market started its rebound, my property recovered quickly and with great strength.  Since the AZ Real Estate Market is primed for success, don’t be a buyer sitting on the sidelines, you’re going to put your money somewhere so why not Real Estate.
  • Analyze and Quantify – If you can calculate realistic expenses and rental income that’s all you really need when it comes down to valuing a piece of property. If you can borrow at 4% or less and rent out for a 6% yield, you’ve likely found yourself a solid real estate investment.  There’s not only the cash flow component but the underlying equity element that helps investors build their wealth.  Stocks require you to trust what the company reports.  There are many ways for companies to massage their numbers and make things look better than they really are.  You as the consumer have access to all kinds of real estate sites like Zillow, Trulia, Realtor.com that assist one in understanding value.  We operate a family practice, the Mackey Martin Group and pride ourselves in being able to help you position your portfolio for success through your fixed asset investments, be it a primary, second, or investment property.    You hire all kinds of professionals around yourself, and your real estate agent can be that integral part of helping you establish how you invest.
  • More Insulated – Real Estate is local. If you’ve made a good decision to buy in an economically strong region (i.e. Phoenix), you will be more insulated from the national or global economy.  A natural disaster in China is not going to affect the rent you charge.

“Historically the largest real home price decrease is on the order of 5% in any given year,” says Jonathan McCarthy, senior economist at the Federal Reserve Bank of New York.  “Whereas you talk about a real stock-price decline, you could probably see 20% or even more.”

In closing I thought you might like to see the Great Phoenix – ARMLS (Arizona Regional Multiple Listing Service) Residential Resale chart.  I think one would say dramatic!!

Information taken from “The Cromford Report”

Monthly Average Sales Price

May 12, 2015 | Market is on a Run! Are You Still Sitting on the Curb Without a Real Estate Agent?

TO GO BACK IN TIME AND REVIEW WHERE THE “MARKET INDEX” HAS GONE, HOVER OVER DROP DOWN MENU “ABOUT” AND YOU WILL FIND ACHIEVED BLOGS FOR YOUR CONVENIENCE. 

Market Index

What an Experienced Real Estate Agent Can Tell You About the Housing Market…

I use to have what you would call a normal real estate career and then the last housing crisis came into play and nothing has seemed normal since then.  People have seemed since the last elections when there was a call to get rid of some dead weight.  The American people decided they have had enough and took back their power in the voting booth.  “No man is good enough to govern another man without the other’s consent” Abraham Lincoln.  All of that said, people seemed to come out in 2015 with renewed spirit, having confidence to move forward and take action when purchasing real estate.  The start of 2015 shows great enthusiasm and the market has renewed confidence, not to mention historical low rates, posting today 05/12/15 at 3.92 % conforming, and Jumbo at 4.04%.  

I always comment to people that they will call a friend and ask for a referral of a dentist or a Financial Planner with much more care than they do when picking a Real Estate Agent to fill out their team of players.  Let’s face it, your Real Estate Agent is guiding and helping you with your largest fixed asset, don’t you want the best?  We are a family business with over 30 years’ experience and over $163 million in closings, don’t hesitate to call us as we want to be your real estate agent.

The Daily Market Snapshot gives you a good view of the market to date and measuring back 2-years to 2013, and how the Average Sales Price, Units in UCB (Under Contract taking Back-ups) and Pending Sales, Appreciation on a Monthly $/SF basis is pushing up and showing Buyer Confidence hopefully has returned.

Data gathered from “The Comford Report”

Daily Market Snapshot

snapshot2

Monthly Average Sales Price for Greater Phoenix Area

Look at the price in an upward movement since October, 2011

Sales Price

April 25 – New listings have started to arrive faster than they did last year and are up 2.1% for the quarter to date. They are up 5.4% quarter to date compared with 2013. Because we are at the height of the buying season, the additional supply is not increasing the total number of active listings. However they are not declining as they were in February and March and this will moderate the market in some areas. Unfortunately for both sellers and buyers the new supply tends to be arriving fastest in the areas that need it least. The West Valley remains very short of supply while the Northeast and many parts of the Southeast are starting to look a little better from a buyer’s perspective.

 

April 29 – Yesterday the S&P/Case-Shiller® Home Price Index® report came out for the sales period December 2014 through February 2015.

Ranking the top 20 cities by the most recent month to month change in pricing we see:

  1. San Francisco +2.00%
  2. Denver +1.42%
  3. Seattle +0.89%
  4. Charlotte +0.88%
  5. Los Angeles +0.75%
  6. San Diego +0.71%
  7. Dallas +0.71%
  8. Portland +0.68%
  9. Miami +0.64%
  10. Tampa +0.39%
  11. Washington +0.36%
  12. Phoenix +0.30%
  13. Detroit +0.29%
  14. New York +0.15%
  15. Minneapolis +0.08%
  16. Atlanta +0.05%
  17. Chicago -0.04%
  18. Boston -0.18%
  19. Las Vegas -0.25%
  20. Cleveland -1.04%

For 18 out 20 cities the change was less than 1% and there is very little to comment on here, except that the West Coast remains popular.

Phoenix’s prices will start to show more significant increases in real life during the period March through May which means we won’t see much interest for us from the HPI until this period gets reported by S&P/Case-Shiller at the end of July. By then it will be very old news. This illustrates the main drawback with the HPI. It is a reasonable guide to what has happened in the past, but it is painfully slow to tell us what is happening here and now.

April 30 – The Cromford® Market Index for the single-family market in the 14 largest cities looks as follows:

A pattern is becoming clearer. Most of the west valley cities, including Glendale, Avondale, Surprise, Goodyear, Buckeye and Peoria are still seeing a significant rise in the CMI compared with this time last month. Tempe is also showing a similar trend. However, most of the east valley cities are showing very little upward movement over the past month.

The difference is in the supply. Supply in much of the west valley continues to be very weak, while supply in several of the east valley areas is stronger. In Chandler and Gilbert, the number of active listings has risen 3% to 4% over the past month, while Surprise, Peoria and Goodyear are all down 7%.

Is this enough data to give you brain freeze?  It can become overwhelming when one tries to read and understand this blog.  One thing I have found in my daily walk as a Real Estate Agent is that people really require data, nothing more, and nothing less.  I hope we have satisfied your thirst for updated Real Estate data with this posting and if you still have questions, contact me and I will supply you with the answers!

Update for the Phoenix Real Estate Market | February 2015

This is the time of the year when I watch the Phoenix real estate market to see how it will reveal itself.  From the first of February to mid-March I wait in full anticipation for the market to make its big announcement.  You might say this is like Ground Hog day and we are hoping he won’t see his shadow so that this market can take off and give us some insights to 2015.  This watching of the market is similar to how my husband use to track politics. . .he also could give you an opinion who to watch for the teams to watch for the World Series, Super Bowl.  Sports have always played a role in our family system but whoever you are you watch those things that have meaning to you.  The typical person today watches their liquid assets and they now track the value of their largest fixed asset their home.  You might comment right now that you don’t own a house but the reality is that each of us either owns a home or has a family member or friend that is vested in real estate and we all wait with great anticipation for a strong, healthy year to appear.  In my career I have never seen that if February and March are flat in the Phoenix real estate market that the year is historic in recordings or growth; however I have seen an active February and March and watch equity and recordings hit highs from a comparison stand point.

Watch below as you will see that the market is raising its head the first part of February and showing us that this year may yet become a definitive marker year for the Phoenix market.  

Also note the housing formations and the complete turnaround in this data.  This has been a huge concern over the past couple of years, but with the new Census data, presto, shazzam we topped two million in December, 2014 which is the highest since 2005.

This is a graphical analysis of the Phoenix real estate market for February 2015.

What does this mean to you and me?  One would anticipate that housing prices will continue up.  Our numbers held well in 2014 and now would be the time to purchase if you are sitting on the fence.  The market is still very much behind the 2005-2006 market(s) and we can see that there is another 30-40% growth (dependent on area of the Phoenix metroplex) still to come.

Phoenix Real Estate Market Information below from The Cromford Report

February 1 – The initial sales total for January was unimpressive – 4,790 for all areas & types across ARMLS, which compares unfavorably (1.7% down) with January 2014 when we saw 4,862. However I see a few slightly more encouraging signs in the leading indicators:

  • pending listing counts 5,631 versus 5,723
  • under contract counts 8,776 versus 8,595
  • contract ratio 36.64 versus 33.65

this is a graphical comparison of different cities within the Phoenix real estate market.

January 31 – The local housing market might be pretty quiet right now, but we are seeing dramatic action in the numbers just released by the Census Bureau. Household formation shot through the roof during the fourth quarter. THIS IS BIG NEWS, despite there being little reporting of it in the media at large.

The annual household formation numbers for the fourth quarter were as follows:

  • October 2014 = 1,435,000
  • November 2014 = 1,618,000
  • December 2014 = 2,001,000

These are colossal numbers, especially compared with 12 months ago:

  • October 2013 = -110,000
  • November 2013 = 103,000
  • December 2013 = -205,000

The December number of just over 2 million is the highest we have seen since June 2005, almost 10 years ago and at the height of the housing bubble.

The growth rate for houses under $500,000 in the Phoenix real estate market is gradually increasing.

At the moment this household formation rate is translating into demand for rentals, but in every up cycle this is the first stage and it is usually followed by an upturn in demand for homes to buy. Household formation is usually a leading indicator of both upturns and downturns in the housing market, especially when examined as a 12-month rolling average.

New Listing Activity Slowing which is a good sign for Sellers, Mackey Martin, April 21, 2014

new-smd-index1

The heat is starting to accelerate upwards and we are reminded that summers in Arizona are here but for a brief time period of approximately 4-5 months. Those of us that love this state and its wonderful weather wait in anticipation for the moderate weather to return which typically appears somewhere in October. At least we don’t have the issue of ice and snow, but with the aide of air conditioning both in cars and houses we find the dry Arizona weather to be very acceptable.

New listing inventory is on the decline and as you can see from the Market Index above we are in a very good position on total inventory. The Market Index has continued to improve for several weeks now.

We continue to encourage everyone that wants to purchase to move forward with the historic rates that we are experiencing. Please see rates below:

Nick Heth with EverBank, nick.heth@everbank.com, 602-321-1684:

Conforming 30-year fixed 4.375%
Jumbo 30-year fixed 4.25%
Jumbo 7/1 arm 3.25%
 

Origination News

FICO plans to release a new broad – based scoring model this summer that helps lenders analyze a consumer’s credit risk with greater accuracy. This product launch will represent FICO’s first changes to its scoring model in six years, said Anthony Sprauve, senior consumer credit specialist at FICO.

In an interview, Sprauve could not provide specific features of FICO Score 9 at this time, but said the fundamental way the San Jose, Calif., analytics firm looks at data typically found in credit bureau reports is the same. For example, the product will still review a consumer’s length of payment history and balances.

However, FICO Score 9 will analyze post-recession data in terms of how a person’s spending and credit habits have changed now compared to six years ago. Consumers who previously had good credit scores will see slightly better scores in the new product model, Sprauve added, while people with scores that need work will perhaps score a little lower.

Overall, lenders will know the risk assessment pertaining to any individual looking to receive a loan or manage their account and whether they are ready to take on debt.

“For lenders, the FICO Score 9 is a good thing because it gives them a more laser-focus on where a person is in that spectrum of being able to repay debt because it’s in nobody’s interest to give credit to someone who’s not ready to take on credit,” Sprauve says. “The score is about being able to accurately assess that risk.”

The FICO Score 9 is a broad-based score. FICO plans on rolling out industry-specific scores for all major credit product lines such as mortgages, auto loans, credit cards and personal loans later this year, Sprauve said.

Lenders purchased more than 10 billion FICO scores last year and nearly 30 million U.S. consumers received access to their score for free. Furthermore, the 25 largest credit card issuers, top auto lenders and thousands of other businesses rely on the FICO score for consumer credit risk analysis and federal regulatory compliance.

Furnished by Nick Heth with EverBank

Below is data extracted from “The Cromford Report” which as you can see is as
of April 20, 2014

ave-sales1

April 19 – In just the last 2 weeks, the rate of arrival of new listings has dropped noticeably. Until April 6, the 7-day rate has generally been about 10% higher than in the same period of 2013. Last week the difference dropped to about 5% and this week it is has plunged to 5% below.

We have seen 2,335 new listings in the last 7 days. This is the lowest total since the first week of January. If this trend continues for some time it could prove to be significant good news for sellers.

April 18 – The annual sales rate for all areas & types in ARMLS stands at 80,775 today. This is just a shade above the long term average for 2001 onwards. It is also the lowest level since August 2009 and a long way from the peak of 106,821 which was measured in October 2005. Given that the population is much larger now than it was in 2005, this represents a fairly low annual turnover rate.

Along with many other signals, we are watching for the turning point in the annual sales rate. Once it starts increasing we know the cooling off that has been developing since July 2013 has come to an end.

The lowest rate we have seen in recent history was 48,493 which occurred in June 2008 and the gradual increase during the following 12 months was the sign that falling prices were staring to stimulate higher demand.

In 2014 prices are unlikely to fall enough to stimulate higher demand. Instead it is more likely to be the greater availability of purchase money loans that starts to turn the tide and generate more buyer activity. A combination of higher rates and easier underwriting rules would do it. At the moment there is more talk of easing underwriting than measurable action. But the trend is building and it is likely that many lenders will be unwilling to tolerate the current extremely low level of mortgage applications. We anticipate lower limits on credit scores, smaller down payments and greater acceptance of short sale and foreclosures in borrowers’ history. All this will be subject to restrictions in the Dodd-Frank Act. However now the rules are clearly laid out, lenders will probably find multiple new ways to live within the rules while growing their business effectively. If this does indeed materialize we are likely to see the turning point in the annual sales rate as an early indicator of the new trend.

April 17 – A little more improvement for sellers has taken place over the last week, but the emphasis is on the world “little”. The change is so slight as to be only just above imperceptible. Demand is increasing slightly faster than supply (when adjusted for seasonality).

When we look at the rate of arrival of new listings they are still higher relative to last year at this time, but the gap is narrowing.

Knowing when to exit the game, Mackey Martin, March 17, 2014

The news continues to be dismal and according to the data you will see to follow we continue to gather inventory.  Gauging from the “Market Index” above our numbers are still moving against the sellers and all indications are that they must have their numbers realistic to close and record their properties, or the end result will be that they will be yet another “failed” listing to be documented within MLS data.  A seller told me yesterday that “they needed a specific number”, yet all data indicates that their “need” and real market value do not line up.  If you’ve ever watched a good craps table in Las Vegas you will notice that when everything is going well all players typically choose to stay in the game, however when the energy changes at the table and the house starts winning. . . trust me ”MANY” feel their luck will change so they stay in the game.  When people see the energy pattern switch, they decide to take their money off the table and move onto another game within the Casino. You can apply that same thought process to the emotional thinking of the seller and the reason our inventory is growing so profoundly is simply the sellers feel their luck will change.  If a seller is sitting on equity in their home, then fold your cards and take your money off the table if indeed you need to exit the market of this investment.  Many sellers will hold and miss this season for liquidating this asset.  During a good majority of my career one could go out and project a market, but there are too many variables to wager one’s equity on a market like this.  With the continued turmoil nationally and internationally none of us has a crystal ball as to where we are headed.

This blog is written concerning preservation of one’s estate.  Whether you put on the hat of a buyer or a seller, ultimately both want to protect their portfolio be it fixed or liquid. Accurate pricing is the goal for the seller, and we believe this continues to be a good time to list if priced to the market.

Rates as of March 14, 2014

Jumbo 30 year fixed 4.25%

Jumbo 7/1 Arm 3.125%

Conforming 30-year fixed 4.375%

Below is data extracted from “The Cromford Report” which as you can see is as of March 13, 2014

March 17 – The National Association of Home Builders published their Housing Market Index today. The top line number advanced slightly from 46 to 47 indicating a slight improvement in home builder confidence at the national level. However readings below 50 suggest that more builders think conditions are poor than think conditions are good. The improvement was entirely in the mid-west and south which advanced from 49 to 52 and from 46 to 48 respectively. The northeast fell 5 points from 34 to 29 while the west also fell 5 points from 58 to 53.

The west has fallen 18 points in the last 2 months from 71 to 53. This is far more than any of the other three regions.

March 16 – Last week was another record week for price cuts – 3,232 in the last 7 days. Only 237 price increases.

For the same period in 2013 we saw 1,495 price cuts and 300 price increases. These numbers are for Greater Phoenix (excluding out of territory) and suggest that sellers are meeting a lot of competition from each other because of the unusually low demand. With only just over 29,000 active listings in Greater Phoenix this wouldn’t normally be necessary.

March 15 – We are now in mid-March yet the number of active listings continues to grow. Although the total number (all areas & types, including UCB) is quite normal at 30,314, we would usually be seeing declining numbers by now because March through May is the peak season for active listings going under contract. If the number of active listings manages to grow even slightly during March then it is likely to soar during the second half of the year, unless there is a major change in market direction. If we exclude UCB listings, the total today is 27,056 which is the highest we have seen since April 2011 and 60% higher than March 15, 2013.

New listings continue to arrive much faster than last year, but not in excessive numbers. We have seen 26,353 year to date, 11% more than the 23,813 we counted last year. This would normally not be considered excessive, but the shortage of buyers means there are more new listings than market needs.

The date on which the number of active listings peak is one of the things that indicate the strength of the market. Here is what we have seen since 2001 (all areas & types):

The date for 2014 is not yet determined. March 15 is our best candidate so far, but March 22 could still be higher. Nine of the thirteen years above had earlier peak dates than March 15. However six of the thirteen had more active listings at the peak than we have now.

February 18, 2014

“Did We Just Enter a Buyer’s Market?”, Mackey Martin

We continue to watch the marker month of February but to date the market is raising it’s ugly head to declare that growth for the moment is non-existent, infact watching the Market Index below shows that we are losing ground in the Phoenix Area.

Seller’s will be pressed from every direction to think with logic based on statistical data, versus the emotion of the past year of 2012 to mid-2013 where we saw signigicant growth in the market place.

There are only three things that control a sale of a property:

  • Price
  • Condition
  • Location

SellersWhen you have a market that is so unrealible your single focus will be pricing.  Inventories are climbing due to overpricing and your job is to be priced at “Market Value”

Buyers:  You have rates on your side, so now is the time to purchase.  Your job will be to have a seasoned team of professionals to help you journey the choppy water and to try and purchase at “Market Value” if not below.  Mackey Martin

Below is data extracted from “The Cromford Report” which as you can see is current as of today’s writing.

market-index-feb18

February 18 – US home builder confidence has suffered its largest ever monthly drop between January and February 2014. The National Association of Home Builders (NAHB) housing market index plunged from 56 to 46. This is the first reading since May 2013 that has dropped below the crucial 50 mark. When it is below 50 the majority of home builders think that market conditions are poor rather than favorable.

  • current sales conditions fell 11 points from 62 to 51
  • expectations for the next 6 months sales fell 6 points from 60 to 54
  • prospective buyer traffic fell 9 points from 40 to 31

The NAHB blamed the drop on poor weather conditions. However when we look at the changes by region we find:

  • Northeast dropped 8 points from 41 to 33
  • Midwest dropped 9 points from 59 to 50
  • South dropped 7 points from 53 to 46
  • West dropped 14 points from 71 to 57

Since the largest drop was in the West where the weather has been rather good (too dry in fact), we are not buying the poor weather argument.

The weakening trend in demand that is all too clear in Greater Phoenix is reflected in the lower buyer traffic reported by home builders at the national level.

February 16, 2014

February 16 – The monthly median sales price for all areas & types dropped below $180,000 today. At the same time the annual median sales price reached $180,000 from below. When the long term average moves higher than the short term average this is a distinctly negative signal for prices. The cooling in the market has now been around long enough (since July 2013) to cause some clear negative signals to start showing up in pricing measurements. We expect to see more of these over the next few months.

Having peaked at $187,840 on December 30, the monthly median sales price has declined to the same level it reached in mid-June 2013. This means that within 4 months we will be measuring negative appreciation as measured by the monthly median sales price, if prices stay at or below today’s level.

February 15, 2014

February 15 – One easy way to observe how weak demand is at the moment is to compare the count of pending listings on January 15 and February 15. In every year there is normally strong growth in this number between these two dates. We have been measuring these numbers since 2001 and 2014 is the first year the increase has been less than 1,000. Even in 2007, which was a very soft year, pending listings grew by more than 2,000 from 5,201 to 7,255. In fact, the previous worst year was 2008 with a growth of only 1,317 from 3,610 to 4,927. In this context 2014’s growth from 5,420 to 6,396 looks very disappointing for sellers. The best year for this measurement was 2005, when pending listings grew from 7,831 to 11,208.

MARKET UPDATE FOR PHOENIX MARKET, Mackey Martin

This is an interesting time of year.  I always reflect with consumers and my colleagues that this is a marker month for the year.  I have seen the market reveal itself as late of mid-March, but it always gives me direction with counseling with Buyers and Sellers.  Watching February is similar to the anticipation of a child who waits for Santa Claus to arrive.  As expected the market starts unveiling itself and we can see somewhat where we are headed for the upcoming year.  Currently the market is very quiet and you can imagine as I wait for this information the silence can be quite deafening.

Below are some entries from The Cromford Report that is statistically based and I believe to be the most accurate in giving us a glimpse of what is going on in our market proper.

market-update

February 9 – In true Phoenix tradition, the balanced market did not last very long – from October 27 to February 8 to be precise. We are now in a confirmed buyer’s market with the Cromford® Market Index dropping below 90. Demand is weak with the Cromford® Demand Index at 78.7, its lowest level since May 2008. Supply is not high, but it is growing fast and the Cromford® Supply Index stands at 87.7, its highest level since July 2011. The deterioration in market conditions for sellers is across the board. No geographic area or price range is improving. However some sectors are much more favorable to sellers than others. In general the luxury market and the active adult areas are more favorable for sellers than the rest of the market. In the majority of sectors, prices are now under downward pressure, although they have not responded much yet due to residual seller optimism. However, if current market conditions prevail we are likely to see lower sales prices in many of these areas before too long.