December 2011 figures are in for our MLS and I LIKE them! Our local real estate market is looking different at the start of 2012 compared to last year. Our inventory in the Phoenix area at the end of December was 42.37% lower than a year previous! That speaks volumes…and prices rose 3.31% for the year. The prices had remained fairly stable over 2011 but in the 4th quarter, prices rose 4.46%.
Nationwide, the Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending January 13 rose 23.1%, and refinance applications increased 26.4%. Existing home sales rose 5% in December, and the inventory of unsold homes on the market decreased to a 6.2 month supply (down from 7.2 month supply in November).
Since new unemployment claims fell by 50,000 to 352,000 for the week ending January 14 (the lowest since April 2008) AND continuing claims for the week ending January 7 fell by 215,000 nationally. Is it wishful thinking to wonder if we have rounded a corner? Our economy has a long way to go, but housing market improvements are very important
Our real estate market appears to have rounded a corner. At a recent meeting of Realtors and Mortgage Bankers REO department heads, we were told that there “is no ghost inventory”. Now, the definition of “ghost inventory” varies, but we generally consider it to mean those homes that have been foreclosed but not yet put on the market for sale; while others consider homes with serious delinquencies but no foreclosure proceedings published to be included in “ghost inventory”. We are certainly seeing property that has hit the market over the last 6 months that had gone for a year or years without payments being made. The number of foreclosures has declined tremendously, although the number of short sales has risen. The number of traditional sales has increased to a figure very close to the number of short sales.
Distressed sales of all kinds (foreclosures or short sales) dropped from 69.6% of the market share in 2010 to 59.8% in 2011. Perhaps the best news in our local market: From the November 2009 pending foreclosure number of 50,568, our December 2011 the number of pending foreclosures dropped 60.49% over this 2 year period. This has been a continuing trend through the year. Pending foreclosures finished the year by breaking though the 20,000 barrier to cross the finish line at 19,979. “Foreclosures Pending” are homes in some stage of acquisition by the lender, prior to actual foreclosure (it’s usually a 3-month process to foreclose). Reduction in the number of foreclosures pending each month is a positive recovery metric. Foreclosures in the 5,000 range are typical of a healthy market. and the glimmer of a recovery seen in this metric grows brighter each month. This tremendous drop in foreclosures certainly contributes to our 2011 average price increase of 3.31%.
If you are a potential buyer waiting for a “better deal” to hit the market, you may be left out in the cold!
Let me know what you think! I’d love to hear from you!
