February Phoenix East Valley Real Estate Market Report

1. February 2014
Phoenix Real Estate
Market Report
February 2014 Phoenix Market Report

2. Market Snapshot – All MLS
Market Summary for the Beginning of February
The market stability and balance which prevailed between the end of November and mid January seems to be coming to an end. Both
demand and supply are now rising, as is normal for the time of year. However it is the rise in supply that is having the stronger effect and
this is bad news for sellers.
Sales were very low in January, giving us the lowest January sales total since 2009. Pending listings have risen sharply since the start of
January but started at such an unusually low point that they are still at their lowest level for early February since 2008. In fact the weekly
pending listing chart looks a lot like 2007 which is not a year we take any pleasure remembering. We expect 2014 to do better than 2007
once we get past the end of February, but at the moment the tepid demand is not making much of a dent in the rise in active listings. If
we were going to have a strong spring for sellers then active listings would have peaked in mid January and be falling by now. On the
positive side, the new supply is almost all non-distressed, whereas in 2007 we faced an onslaught of foreclosed homes coming to market.
New listings have been arriving at a rate which is about 9% higher than last year, so if demand remains below par we can probably expect
to get back to a "normal" level of supply around 32,000 listings (including UCB) during the second half of this year. With supply normal
and demand some 20% below normal we are heading towards a classic buyer's market.
This means increasing concessions from sellers and erosion of their pricing power. The monthly median sales price is already starting to
look a little wobbly, both overall and in a number of specific locations including the City of Phoenix. The medians are not assisted by the
relative strength in the luxury sector. However the average price per square foot is being given a significant boost by the luxury segment
and although the monthly average fell between December and January, the under contract $/SF is still moving upwards.
If current trends stay in place then we expect no significant sales price rises during the first half of 2014. Indeed, if current trends stay in
place through the second half of the year then pricing is likely to be lower by January 2015 as sellers compete with each other for the
attention of the smaller pool of buyers. However, five months is a long time in the ever-volatile Phoenix housing market and trends may
very well change by then.
Here are the basic ARMLS numbers for February 1, 2014 relative to February 1, 2013 for all areas & types: (Continued next page…)
February 2014 Phoenix Market Report

3. Market Snapshot – All MLS
Market Summary for the Beginning of February (Continued)
Active Listings (excluding UCB): 25,541 versus 17,573 last year - up 45.9% - and up 11.0% from 23,091 last month
Active Listings (including UCB): 28,526 versus 21,757 last year - up 31.1% - and up 12.7% compared with 25,319 last month
Pending Listings: 5,723 versus 9,523 last year - down 39.3% - but up 23.9% from 4,667 last month
Under Contract Listings (including Pending & UCB): 8,595 versus 13,707 last year - down 36.8% - but up 25.7% from 6,895 last month
Monthly Sales: 4,728 versus 5,928 last year - down 20.2% - and down 20.9% from 5,975 last month
Monthly Average Sales Price per Sq. Ft.: $125.13 versus $108.05 last year - up 15.7% - and down 1.4% from $126.89 last month
Monthly Median Sales Price: $182,700 versus $154,900 last year - up 17.8% - but down 1.4% from $185,000 last month
We are seeing an increasing number of price cuts among the active listings and a fairly rapid rise in the average number of days on market
for closed sales. The average days on market for active listings is not rising, because there are plenty of new listings coming along that
start with zero for days on market. This is not a good sign.
The Cromford® Market Index has started to head downwards again, though it currently remains above 90 at the lower end of the
balanced zone. Should it drop below 90, as seems very possible, this will signal that a buyer's market is fully in effect. Many sellers are
understandably reluctant to accept that the market has changed so dramatically in just 7 months, but they will probably need to be very
realistic in the coming few months and price and negotiate accordingly.
We will need a significant acceleration in demand to change the current direction of the market. The most obvious potential cause of such
a change would be an increase in the flow of money from lenders due to a relaxing of their guidelines, especially for first time
homeowners. The lowering of the FHA loan limits has had a noticeable effect in the opposite direction. It will impact the price range from
$275,000 to $375,000 in a major way. The introduction of the Dodd-Frank Act provisions has had little noticeable effect so far except by
putting more constraints on seller financing by larger investors. However its main provisions are designed to limit mortgage money flow
rather than encourage it. In contrast, Money is flowing well to the jumbo mortgage market and, as a result, 2013 was easily the best year
since 2006 for the luxury home market.
Another possible positive change in demand would be increased household formation and home buying among those aged 25-35. At the
moment this age group is placing stronger demand on rental supply and home purchases seem to be occurring to a lesser extent than for
earlier generations.
February 2014 Phoenix Market Report

4. Market Snapshot – All MLS
Cromford Demand Index™ is a value that provides
a short term forecast for the demand for resale
homes in the market. It is derived from the trends
in pending and sold listings compared with
historical data over the previous four years. Values
above 100 indicate more demand than usual,
while values below 100 indicate less demand than
usual. A value of 100 indicates the demand is close
to normal.
Cromford Market Index™ is a value that provides a
short term forecast for the balance of the market.
It is derived from the trends in pending, active and
sold listings compared with historical data over
the previous four years. Values below 100 indicate
a buyer's market, while values above 100 indicate
a seller's market. A value of 100 indicates a
balanced market.
Cromford Supply Index™ is a value that provides a
short term forecast for the supply of resale homes
to the market. It is derived from the trends in
active listings compared with historical data over
the previous four years. Values above 100 indicate
more supply than usual, while values below 100
indicate less supply than usual. A value of 100
indicates the supply is close to normal.
February 2014 Phoenix Market Report

5. Market Snapshot – All MLS
February 2014 Phoenix Market Report

6. Active Listings – All MLS
February 2014 Phoenix Market Report

7. Sales Per Month– All MLS
February 2014 Phoenix Market Report

8. Average Sales Price– All MLS
February 2014 Phoenix Market Report

9. Market Snapshot – Mesa
February 2014 Phoenix Market Report

10. Active Listings – Mesa
February 2014 Phoenix Market Report

11. Sales Per Month– Mesa
February 2014 Phoenix Market Report

12. Average Sales Price– Mesa
February 2014 Phoenix Market Report

13. Market Snapshot – Gilbert
February 2014 Phoenix Market Report

14. Active Listings – Gilbert
February 2014 Phoenix Market Report

15. Sales Per Month– Gilbert
February 2014 Phoenix Market Report

16. Average Sales Price– Gilbert
February 2014 Phoenix Market Report

17. Market Snapshot – Chandler
February 2014 Phoenix Market Report

18. Active Listings – Chandler
February 2014 Phoenix Market Report

19. Sales Per Month– Chandler
February 2014 Phoenix Market Report

20. Average Sales Price– Chandler
February 2014 Phoenix Market Report

21. Market Snapshot – Tempe
February 2014 Phoenix Market Report

22. Active Listings – Tempe
February 2014 Phoenix Market Report

23. Sales Per Month– Tempe
February 2014 Phoenix Market Report

24. Average Sales Price– Tempe
February 2014 Phoenix Market Report

25. Market Snapshot – Queen Creek
February 2014 Phoenix Market Report

26. Active Listings – Queen Creek
February 2014 Phoenix Market Report

27. Sales Per Month– Queen Creek
February 2014 Phoenix Market Report

28. Average Sales Price– Queen Creek
February 2014 Phoenix Market Report

29. Market Snapshot – Scottsdale
February 2014 Phoenix Market Report

30. Active Listings – Scottsdale
February 2014 Phoenix Market Report

31. Sales Per Month– Scottsdale
February 2014 Phoenix Market Report

32. Average Sales Price– Scottsdale
February 2014 Phoenix Market Report

33. Market Snapshot – Gold Canyon
February 2014 Phoenix Market Report

34. Active Listings – Gold Canyon
February 2014 Phoenix Market Report

35. Sales Per Month– Gold Canyon
February 2014 Phoenix Market Report

36. Average Sales Price– Gold Canyon
February 2014 Phoenix Market Report

37. Market Snapshot – Apache Junction
February 2014 Phoenix Market Report

38. Active Listings – Apache Junction
February 2014 Phoenix Market Report

39. Sales Per Month– Apache Junction
February 2014 Phoenix Market Report

40. Average Sales Price– Apache Junction
February 2014 Phoenix Market Report