Let’s make some waves, or at least take a look at a few. Below is a chart showing the different category of sales in the Phoenix real estate market since the start of 2007:
As far as interest in the market went, as measured by activity, we reached the depths of apathetic hell back in December 2007 and January 2008 when barely 2,000 single family homes sold in Maricopa County. Before there were bank owned homes to blame, good old fashioned supply and demand already was making a dent.
As foreclosures – pictured here in maroon – started to enter the market at increasingly lower prices, they became the dominant feature of the market; in January of this year, 2,503 of the 3,652 sales were bank owned homes and only 836 were so-called traditional “non bank owned, non short sale” sales.
Back on April 14 we wrote about all boats being lifted here in the Phoenix real estate market because of the interest in foreclosures and you can see on the chart that’s when sales started to soar. If you take the chart back to 2005, which I aspire to do at some point when the schedule allows, you’ll see we were at 3-year highs in total sales.
The assumption was only bank owned homes were selling but the chart clearly shows that isn’t the case. Investor fix and flips – foreclosed homes purchased by investors for the sole purpose of rehabbing the properties and selling for a profit, be it significant or minuscule – have worked their way into the cream-colored “traditional” sector but they’re clearly not the whole cause.
The relative dearth of bank owned listings hasn’t diminished interest in the market; if anything, it seems to have moved many buyers off the fence in search of reasonably priced properties whatever the nature of their ownership.
And non-bank owned, non-short sale homes are selling. (We pause now for today’s blatant plug for my $325,000 listing in Arrowhead Ranch which sold at market value in a mere 23 days.)
So what’s the next big thing? By all indications it’s going to be short sale, assuming lenders improve their processing and agents avail themselves of training such as the Short Sale and Foreclosure Resource training being made available through NAR rather than trying to stumble blindly through the market’s most complex, detailed type of transaction.
(The lack of blue on the left side of the chart is due to two factors – very few short sales being attempted and different categorical tracking in the Arizona Regional MLS. In truth, there ought to be a bit more blue back there but it’s virtually impossible to go find it now given the way these were documented then.)
Still, even as the distressed property market slowly shifts toward short sales from REOs (and assuming the lenders don’t suddenly flood the market rather than continuing the current policy of slowly adding homes to the inventory) there does remain a decent market for traditional sales assuming their well priced and well marketed.
Selling is not an improbability. At least not nearly as improbable as it was in the fall of 2007 when no one at all was interested in the Phoenix real estate market.
[tags]Phoenix real estate[/tags]