Market update

Home sales in July (single family, townhouse & condo
combined) were 4.9% lower than June, with a 4.6%
fall in single family and a 7.5% fall in townhouse &
condo sales.

Total sales were down 18.1% from July 2013 with
single family down 18.7% and townhouse & condo
sales down 13.3%. The gap between 2013 and 2014
sales closed opened wider than in June because July
was an unusually strong month last year. Thanks to
the price rises between July 2013 and July 2014, the
drop in total dollars spent on homes was less severe
than the drop in the unit count.
• Total dollars spent on single family homes fell by
13.3% below July 2013.
• Total dollars spent on townhouses & condos fell
by 10.0% below July 2013.
In the sections below we compare July 2014 data
for Maricopa and Pinal County with that for July
2013. We analyze volumes and pricing for 8 different
transaction types as well as the totals. Individual
statistics are also provided in the attached tables by
county and city. This report concentrates on single
family homes but detailed statistics for townhouse/
condo properties are shown in the tables.

Demand

Demand has been much weaker since July 2013
and as yet shows little sign of recovery. Activity by
first time home buyers has been stubbornly and
unusually low and is not compensating for the loss
in strong investor demand that had prevailed from
2009 until July last year.
At the top end of the market sales of single family
homes over $500,000 was flat compared with July
2013. Although flat this was much better than steep
drop for price ranges below $500,000. Sales of single
family homes below $150,000 fell 36%. This fall was
partly caused by the lack of distressed supply, but
mostly by the reduction in demand from investors.
The market over $500,000 was weaker in July than
in June but we still had a sales mix that was heavily
biased towards higher end homes. In addition the
market below $150,000 continued to contract. It is
the relatively low volume of low-priced home sales
that is causing the monthly median sales price as
well as the increase in average price per sq. ft. There
has been very little movement in the values of
individual homes over the past 12 months.
Luxury homes over $500,000 captured a 23% market
share, up from 21% in July 2013. The lowest-priced
homes under $150,000 fell from 14% to 10%. The
mid range has increased its share of spending from
65% to 66%. Although supply has been declining for
the last four months, it is still adequate to meet the
current low level of demand.
Market Summary – Beginning of September 2014
We are pleased to provide our clients with this Monthly Market Update.
This report will provide you with the latest real estate trends.
Our business is built around the concept of educating and providing the personal service that Real Estate Agents and Lenders have
come to depend upon. It is with this philosophy that we offer the W.P. Carey School of

Business to our clients, associates and friends. It
is intended to keep you informed on critical market trends that affect our businesses.Market Update September 2014 Page 3
Changes in Transaction Mix
For single family homes, the substantial changes in
transaction mix between July 2013 and July 2014
are illustrated in the chart below: (Note: ‘Reverted’
homes are excluded from ‘All Sales’.)
Below is a similar chart for townhouse /condo
properties. We note an uptick in the previously very
low level of new construction sales for townhouse/
condos properties.

Supply
Our local Multiple Listing Service (ARMLS) had
24,994 active listings on August 1, 2014 across
Greater Phoenix including listings under contract
seeking backup offers. This is a decline of 3.3% since
July 1, but it is 36% more than on August 1, 2013.
11.9% of these active listings already have a signed
contract, typically waiting for the lender’s short sale
approval or some other contingency before they stop
soliciting backup offers. This percentage has fallen
from 18.0% over the last 12 months.
The number of active single family list

 

Reference Clear title

All-Cash Sales Fall to Six-Year Low

All-Cash Sales Fall to Six-Year Low
 

The market share of all-cash home sales continues to fall and in June made up the lowest share since the beginning of the financial crisis.  CoreLogic said today that cash sales comprised 33 percent of all home sales in June compared to 34.4 percent in May.  Prior to the crisis cash transactions generally averaged 25 percent of all home sales.  Cash sales hit a peak of 46.2 percent of sales in January 2011.

The share was also down on an annual basis.  Cash sales made up 36.3 percent of sales in June 2013.  The year-over-year share has fallen each month since January 2013.

Real estate owned (REO) sales had the highest share of cash transactions at 55.3 percent.  However, those sales made up only 7.2 percent of all home sales in June.  When cash-sales peaked in January 2011 REO accounted for 24 percent of all sales and so had a much larger impact on the overall cash percentages.  The second highest share of cash transactions at 32.5 percent went to re-sales.  Short sales followed at 31.8 percent and newly constructed homes trailed at 16.2 percent.

 Reference core logic

Foreclosure Inventory below 08 levels

Foreclosure Inventory below 2008 levels

 

Thew US foreclosure inventory declined for the 26th consecutive month this past June to its lowest level since May 2008, but foreclosure starts rose for the second consecutive month.

The total foreclosure pre-sale inventory rate decreased by 1.5 percent month over month in May and has dropped by nearly 36 percent year over year.

 

There were 88,300 foreclosure starts in this past June, however, Foreclosure starts increased 2.3 percent month over month, but they were down nearly 19% year over year..

Reference Neal McNamara