Leif Swanson

Phoenix Metropolitan Area Real Estate Statistics - December 2009

What is happening with the real estate market in the Phoenix metropolitan area? What changed in December 2009?

[click on the charts to expand]

1) SALES: December 2009’s sales of 7,661 were much better than December 2008’s 5,504 sales. That’s 39% more sales this December than last December! 85.9% of the sales in December were homes, 12.6% were condos, and 1.5% were manufactured housing.

Sales for the entire 2009 year were over 92,200, the third highest sales year ever.

19.29% of the Phoenix metro area MLS listings sold in December 2009, almost double from December 2008 (which was a weak 10.23%). 20.9% of the homes sold in December; 13.9% of the condos sold; 9.2% of manufactured homes sold. Bank-owned foreclosure properties accounted for 43.2% of the sales in December 2009 down from July 2009’s 53.4%. More and more buyers are purchasing homes from regular sellers. 39% of the total sales in December 2009 were cash. 32% of the sales were with FHA or VA financing.

2) SALES PRICE: The average sales price in December 2009 went up $3,000 to $177,472. It’s still 8% less than December 2008’s $192,739 average. The good news is that this percent difference (2009 vs. 2008) is decreasing.

The median sales price in December 2009 decreased to $126,500. This was 11.5% less than the median sold price of $143,000 in December 2008. The number of cash buyers spiked in December, which might account for a higher number of low priced homes skewing the median. The Phoenix metropolitan area real estate market bottomed out in early April.

75% of the sales in December 2009 were below $200,000, 83% under $250,000, 92% under $350,000, and 96% under $500,000.

3) INVENTORY: Did the absorption rate go down (the # of months’ inventory available for sale)? The inventory of homes in December 2009 decreased slightly to 5.2 months. It was much better than December 2008’s absorption rate of 9.8 months. A balanced buyer-seller market is six months. The absorption rate in December 2009: 4.8 months for homes, 7.2 months for condos, and 10.9 months for manufactured homes. Therefore, it is a seller’s market for homes in the Phoenix metropolitan area.

4) NEW MLS LISTINGS: In December 2009, the number of new listings was 10,453, which was less than December 2008’s 11,894 new listings. Inventory decreased to 39,709 active listings. Currently there are 34,700 active listings, down from January 2009’s 52,685.

5) AVERAGE DAYS ON MARKET: Phoenix area homes took a little longer to sell this December at 73 days. However, condos sold quicker than usual at 87 days in December 2009.

6) SALES PRICE VERSUS LIST PRICE: The percent of $$$ that sellers keep (sales price divided by list price) in December 2009 was 96.25%, which was better than December 2008’s 94.74%. A normal market has sellers keeping 97.5% of their final list price.

7) PENDING SALES: Pending sales are a great indicator of future sales. Foreclosure and short sale listings are leading the way with pending sales. The pending sales numbers were very strong in December 2009, reaching better levels than in all of 2008, 2007, and 2006. Pending sales in January are tracking historically strong but lower which is seasonally normal. The Phoenix real estate market activity is now performing higher than 2005 levels, except that prices are lower. In September, there were over 20,000 properties under contract (pending & contingency), an all-time record. We’re currently at the 16,650 mark. Short sales make up 55.6% of the properties under contract, which skews the numbers (looks good, but doesn’t count if they don’t convert to actual sales).

PRICE PER SQUARE FOOT: It rose to $92 per square foot in December 2009, which is historically low, but the best since January 2009. Multiple offers and declining inventory should have helped this statistic go up. Looks like March 2009 was the bottom of the market for price per square foot. The price per square foot a year ago was $99. Check out the chart!

9) VACANT HOMES: An unprecedented number of Phoenix metro area MLS active listings still are vacant. Sold homes have an even higher number of vacancies. Vacant properties accounted for 77.1% of all properties sold in December 2009, but it dropped off a hair as more buyers purchased occupied homes. This was the 10th month of decline. The normal is under 40%, however. The vacancy rate of sold properties in December 2008 was 85.6%.

10) ASKING PRICE VERSUS SOLD PRICE: Is there any difference between asking prices and sold prices? Yes. The average new list price in December 2009 was $209,773. This was $42,500 less than December 2008’s average new list price. Due to lower priced foreclosure listings and short sale listings.

The median new list price in December 2009 was $134,900. The median new list price was $14,600 less than from December 2008. Again, it’s evidence of the predominance of lower-priced foreclosure and short sale listings.

11) SHORT SALES: Short sales have had a bad reputation as offering false hope to sellers and creating frustration for buyers. They control 26% of the active listings and almost 56% of the properties under contract. Most short sale sellers have to wait 3-4 months before hearing a yes or no from their bank. However, for the first time ever, the percent of short sale listings that sold (19.78% in December 2009) was higher than the overall market (19.29%). 1,715 properties sold via short sale in December 2009 versus only 463 in December 2008 and only 61 in December 2007. The chart below compares short sale and all sale success rates.