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Here’s the Cromford Report’s Market Summary for the beginning of April: March was a somewhat stronger month for sales volumes but most trends continued in the same direction as they have for many months.
Here are the basic ARMLS numbers for April 1, 2013 relative to April 1, 2012 for all areas & types:
Active Listings (excluding UCB): 16,415 versus 14,175 last year. Up 15.8 percent but down 3.9 percent from 17,090 last month.
• Active Listings (including UCB): 20,670 versus 21,841 last year. Down 5.4 percent and down 3.7 percent from 21,460 last month.
• Pending Listings: 10,658 versus 11,964 last year. Down 10.9 percent but up 3.5 percent from 10,300 last month.
• Monthly Sales: 8,162 versus 8,187 last year. Down 7.4 percent but up 24.5 percent from 6,555 last month.
• Monthly Average Sales Price per Sq. Ft.: $113.10 versus $93.57 last year. Up 21 percent and up 1.3 percent from last month.
• Monthly Median Sales Price: $167,000 versus $130,000 last year. Up 28.5 percent and up 4.4 percent from last month.
As is common for the end of a quarter, we saw a large number of sales closed on ARMLS in the last two working days of the month. These late closings had a slight bias towards the lower and of the market so the final sales price numbers for March saw a relatively small advance over February. I say relatively because a 1.3 percent jump in average dollars per square foot and a 4.4 percent jump in median sales price would normally be thought of as large.
The closing of many cheaper homes has left the pending and UCB listings showing higher average dollars per square foot, suggesting strongly that sales prices will continue to move higher in April.
Our pending listing counts are rising much more slowly than they have at similar points in recent years. This shows us that rising prices are having a dampening effect on demand. However, out there in the market it is hard to detect the weakening in demand because supply remains so far below normal that sellers remain severely outnumbered by buyers.
Sales volumes remain weaker than last year, down 7.4 percent from 12 months ago, but the deficit is less than in February. Bank-owned and short sale homes continue to get scarcer. Normal sales across greater Phoenix were 29 percent higher than in March 2012. However lender owned sales in greater Phoenix were down 51 percent and short sales and pre-foreclosures were down 43 percent.
Supply remains weak, but the situation is not deteriorating as fast as it did this time last year when active listing counts were dropping very quickly. The number of new listings being added is almost, but not quite, enough to make up for the listings going under contract or getting cancelled or expired.
Appreciation rates are dropping because prices were rising so fast this time last year. It is unlikely that they will be able to rise so fast this year, but price will still rise at a strong pace over the near term, at least until we hit the summer months.
Normal sales took a 73 percent market share in February (the highest since February 2008) with short sales at 16 percent and real estate-owned sales at 11 percent (their lowest share since December 2007).
We have been expecting new home builders to increase production more than they have so far. The number of permits issued in the first two months of the year suggest they are being very cautious and this is likely to mean that prices will have to rise quite a bit further before a balance is found between supply and demand. So we repeat our expectation that prices will rise at least 10 percent between February and June this year. March only delivered 1.3 percent so we must expect more movement in the next few months.
Michael Orr is Director of the Real Estate Center at the W.P. Carey School of Business at Arizona State University.
Hear Michael with Diane Brennan and Linda Williams for That Market Report on That Real Estate Show Saturdays at 3 p.m. on News/Talk 92.3 KTAR.