Our friends at Fidelity National Title just released a mid-July 2012 Phoenix area real estate market report. The data was honed and refined by the experts at Cromford Report before reaching our eyes. This is a good thing as the amount of data these folks gather is staggering.
The market is behaving is a somewhat predictable fashion considering how truly unconventional it has been in 2012. As we’ve discussed in the first half of 2012, the supply of homes and condos has been quite low. The low supply pushed home prices upward with significant gains in March, April, May and the first half of June.
Based on the news in the July 2012 Phoenix real estate market report it looks like things are calming a bit. To be honest we (The Urban Team) is relieved. Homes prices rose nearly 20% since January and we’ve been worried about another 2005-2006 frenzy. We’d like to seen more manageable gains in the 4-5% per year range verses the 4-5%/month we saw this Spring.
We believe home prices will stay a little soft until October with only modest gains. The main reason is home sales fall in the summer, thus the demand home buyers put on the market is lower in July, August and September. The softening is being evidenced by a slight rise in inventory accompanied by a drop in pending sale numbers. Be mindful that this is a normal trend so when the newspapers come out saying the real estate market is falling, don’t buy into their hype. It always falls in the summer. Just look at the sales graph going back a few years.
Below is a summary of the Phoenix real estate market in June/July 2012 provided by Mike Orr of the Cromford Report. Mike is also Director of the Real Estate Center at the W.P. Carey School of Business at Arizona State University… a very savvy guy when it comes to things real estate in the greater Phoenix market.
The supply of active listings rose slightly between June and July but is still 39.5% below July 2011. Though the sales rate is restricted by the short supply, it managed to climb 9% month to month . However pending sales dropped 15% and are 17% below last year suggesting that demand is cooling. Sales pricing took a rest during June, with average $/SF down 1.2% after rising swiftly between February and May. At $92.04 per sq. ft. the latest reading is 32.6% higher than a year ago. With pending $/SF also falling we don’t expect pricing to rise over the next month despite the continued imbalance between supply and demand. The market is still digesting the large price movement during the spring. Average days on market is falling quickly now for active listings and sales. Foreclosures are down with notices down 20% compared to a year ago while trustee sales are down 58%. This underlines how much short sales (with 32.6% market share) have taken over from REO sales (with 15.3% share) . Using the contract ratio as a guide, the market remains hottest in 85019, 85043, 85035, 85034, 85040, 85037 and 85027.
If you would like to read the entire report we have it in PDF form for you, just click on the link below.
The 2012 June-July Phoenix Real Estate Market Report from
Fidelity National Title and Cromford Report
The Urban Team
Realty Executives Phoenix
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Phoenix, AZ 85020
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