June was really a remarkable month! The number of residential sales and executed single family leases crushed previous records. ARMLS (Arizona Regional Multiple Listing Service, Inc.) reported in June 10,868 sales surpassing the record of 10,252 in June 2005. The 2,280 single family leases signed in June beats the record of 2,002 signed in July 2008.
Most of the time the number of residential sales and residential signed leases have an inverse relationship or opposite effect, as more people are buying less are renting and vice a versa, but in this market both set their all time highs in the same month. The relationship between the high number of sales and leases is because of the effects produced by the high number of foreclosures and short sales: Foreclosures and short sales have pushed down home values and have turned previous owners into current renters.
Distressed Sales Analysis:
June statistics saw a slight drop in the number of REO/bank owned AND traditional sales; however, short sales increased by 5% over the month of May. Sellers and buyers need to monitor this trend to see how the market continues to respond to the current inventory.
Closed Sales Report Analysis:
Sellers:
The month of June saw a staggering increase in the number of closed sales of 13.4% over the month of May. Last month 9,879 homes closed – by far the highest amount of closings in the 36-month reporting period. As inventory continues to shrink, we are seeing buyer activity increasing. That means more competition for homes. The results? Sellers may have more control over pricing and terms when negotiating with potential buyers.
Buyers:
This type of activity means that buyers are competing for the best properties at record rates. We currently have less than 2 months of inventory. Buyers should expect more competition and higher prices as a result. When inventory decreases, demand tends to increase. Buyers MUST carefully work with their real estate professional to understand the market AND to understand how they can compete with the market demand and other buyers who may be in a financial position that is more appealing to the seller.
Active Listings Analysis
Sellers:
For the 8th month in a row, the number of active residential listings has decreased.
The drop in June was a dramatic 24% reduction! This is by far the lowest we have seen in the 36 month reporting period – it is nearly ½ of the available inventory just one year ago. Sellers need to make sure that they continue to watch this trend to determine how their homes should be priced in order to be competitive AND the terms that will need to be available for prospective buyers.
Buyers:
Buyers still have inventory to preview, but that amount is trending downward.
Continue to monitor this statistic, as it WILL be the statistic that indicates how much new inventory you will have to preview … the lower the number, the more likely the competitiveness for lower priced homes will remain part of the current market.
As always, market activity is local and should be researched with your real estate professional to determine the activity and desirability of the homes that are of interest to you.
