For a summary of recent history, see
Market Conditions Preface

The data for the following charts
were extracted directly from the ARMLS database,
the regional MLS for the entire metro Phoenix area,
and include all types of dwellings.

The charts are fact, subject only to data errors by listing agents.

Any statistic cited anywhere else, including reports from ARMLS,
regarding residential real estate resale activity in the metro Phoenix area
that is contrary or significantly different
to any of the following
is simply wrong. 

For the several years presented in these charts, and prior as well, local real estate market patterns have been very persistent. January closings, of December sales, are always lowest in the 12-month cycle. February through July then reflect increasingly higher closing numbers, followed by a seasonal decline from August to year-end, with the most significant drop occurring in September. Clearly, year-end holidays and the school-year cycle are major factors in these patterns.

Since early 2004, the seasonal patterns have remained typical, but the numbers have not.
 

First, as the above chart illustrates, the number of properties offered for sale increased to extraordinary levels. However, since October 2007 there has been a general decline, and over the last few months, the decline has been very sharp.

Since May last year, the volume of "distressed" properties in the listing inventory and being sold has increasingly dominated the local market.

A "distressed" property is one that is lender-owned, or involves a "short-payoff" to a lender at sale closing, or a property sold as part of a bankruptcy.

For distressed properties, the lender is the primary decision maker regarding price. As the above chart illustrates, lenders are currently in control of more than twice as many property sales as the entire general public.

And, as the chart below illustrates, lenders have been "blowing them out". In just over a year, the median sale price for a distressed property has been cut in half ... half. In recent months, however, lenders have gotten control of their panic and prices for distressed properties have finally hit "bottom".

In contrast, the price for properties sold through "regular" transactions declined only 20% in the same period. Individual owners are doing a much better job of getting their price. 

 

 The 12-month sum chart on the right below
gives perspective to the monthly spaghetti.
Click either chart to see a full-page version.

Sales Left is monthly. Right is 12-month sum.

In terms of the number of sales, since May last year sales have been very strong, especially compared to the seasonal pattern in which there is a big drop in September that persists through January. In terms of the number of sales, this market is way beyond the "bottom".

Even more dramatic, since February, the number of resales is higher than any time in history, except only the "bubble" months of 2005. Multiple offers on the more desirable properties are now a common occurrence, just as in 2005.

Most dramatic of all, the median price trend has finally reversed direction - and sharply. In addition to, or because of, the effects of supply and demand, lenders have finally started to hold their ground on price. The free-fall has been reversed. and it's almost certainly not coming back.

But don't look for prices to do much more than flatten. This market is definitely in a "recovery" mode, but the recovery is going to be feeble/flat until employment numbers cease declining. The other continuing negative factor is the very poor condition of lender-owned properties. Many are truly awful, and nearly all have significant deferred maintenance issues. As prices try to strengthen, buyers are going to be more picky. 

The opportunity that has existed here for several months for buyers with good credit and/or cash is going to slowly fade away. If you are thinking about investing, find a good one and "go for it".

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