Market Notes May 19, 2012: Active listings actually jumped up by more than 10% this last week, now standing at 153 available homes up from 139 the week prior, and listed at an average of $69.17 per square foot. 279 homes are currently in escrow pending close, and another 28 homes closed escrow last week, bringing this year’s sales total now to 813 homes sold, closing at an average of $53.33 per square foot, a pace of which is slightly off of last year’s clip due largely to lower supply of homes available. In fact, last year at this time there over 500 homes available for sale, half of which were short sales, but nonetheless, a much larger inventory than we have today. As many of you who have read my blog for a while now, know that I follow the market statistics closely and there are some interesting numbers I want to share with you. The current median home price for Maricopa is $114,000, and that number is not only a 14% increase from March 2012, but is a staggering 41% increase from just a year ago, when the median home price was $81,000 in April 2011. Also important to note is the fact that homes sold in the last 60 days are getting 98.7% of their original list price, meaning that the days of low balling a home are pretty much over. Another interesting note, of the 227 closed sales for April 2012, 57% were cash deals, 20% were conventional loans, 16% were FHA loans, and 6% were VA loans, so there still remains quite a few active cash buyers on the market whether that be investors, or snowbirds. The meaning of that is that if you are a buyer using financing to purchase the property you may very likely be in competition with cash buyers, so the stronger, and cleaner, that you can write your offer the better chance you have of getting an accepted contract.

Another interesting statistic is that of the 227 closed sales for April, 112 of them, or approximately 50% were on the market less than 30 days, so when you do finally find that home that you like, don’t drag your feet in submitting an offer. This is a changing and competitive market and it’s important to have good information to act on when the time comes to either sell, or buy your home. If you would like more detailed analysis, or have questions on the numbers that I have compiled, please call or shoot me an email anytime. As we approach June, I will begin to compile numbers for May and will have those available as well.

Nationally, Capital Economics has issued a report on the current market conditions of judicial states vs non-judicial states and the crux of the report is that non-judicial foreclosure markets are performing better in terms of price stabilization. Arizona is a non-judicial state, just FYI. Judicial foreclosure states require financial firms to handle default proceedings within an official court of law, while non-judicial foreclosure states offer a set of rules and processes that are streamlined and designed to occur outside of court. While many other factors influence the real estate, ie; credit availability, current demand, etc., the non-judicial process is a much less cumbersome process in streamlining the foreclosure process and results in these home being available for resale in a much quicker time frame, and that excludes the robo signing debacle of 2010 which adversely impacted the foreclosure process in judicial states.

I believe that one of the drivers of our current housing market is a higher level of consumer confidence coupled with the expansion of employment in the local area. The BLS numbers remain similar to the March statistics, but slightly better as April and the beginning of the warmer season typically signals more hiring. States like Arizona, which saw a 0.4% drop in unemployment from March, typically point to a slow recovery to the job market, but an improvement nonetheless, and with the current opening of the Banner Health Summit, and the anticipation of the Harrah’s entertainment complex and Intel, lots of primary residence buyers are emerging onto the market. Obviously current market conditions will make a lot of sellers happy, but it should also not discourage buyers. Values have gone up that’s a fact, but historically, and adjacently, the values are still low with much room to approve. What do I mean by that? Look at the values of other sunbelt states, ie; California, Nevada, Texas, New Mexico and Florida, all of which have housing values 20%-60% higher than those in the Phoenix area, so take that into account when considering your next purchase. The Valley of the Sun is the place to be.