Metro Phoenix and Scottsdale Real Estate Market Report for May 2010
Home closings kept their torrid pace in May with 7,809 Single Family Residences closing escrow during the month. A slight drop from April’s 7,835 which was only a decline of .3%.
The big change was the amount of homes entering the market and going under contract. Only 6332 net new listings to the market and that was off set by 5775 homes going under contract. Both of those numbers are significantly lower than last month. There you have the affect of the First Time Home Buyer Tax Credit expiring. However, what really matters is Supply vs. Demand. Interestingly the drop in sales was closely matched by a drop in net new listings to the market.
Year to Date for 2010, the Phoenix real estate market has seen 33,375 homes close escrow and another 17,477 are Pending under contract. This year is still on pace to beat 2009 and be the new second best year for number of homes sold ever here in Metro Phoenix. Second only to 2005.
Average price per square foot took a huge jump to $105.32 from last month’s average of $91.08. But don’t read too much into that, I expect a revision as one sale was entered wrong showing an average price per square foot of over $176,000.
What was the sales mix??? The mix stayed roughly the same with 36% REO or Bank Owned Foreclosures sales, 22% were Short Sale closings and 41% were Retail sales, meaning an owner with equity. Remember experiments have shown that 5-10% of Retail sales are REO and the same with Short Sale, due to poor Realtor entry in the MLS. Another reason for the increase in Retail is the number of homes being bought by investors at the trustee sale, then fixed and flipped. The number of regular Retail home sellers is still the smallest part of the market.
So, what does this all mean??? Too close to tell. Yes, we had a decline in sales due to the Tax Credit ending, but that was matched by less new listings thus very little difference in the market. Right now it looks good, we have to just keep monitoring.
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I hope you don’t mind if I save your post for future reference. I have been lurking on a few real estate blogs lately and that’s the most thoughtful and accurate analysis of the situation that I have read to date. Thanks.
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