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Over on my national website, RealEstateDecoded.com, using Zillow data, I created a new graph which shows you the percentage of homes increasing in value for 20 metro areas.

I’m still checking out the “Percent of Homes Increasing in Value” metric but I think I like it.

It gives me more information than just how fast home prices are rising or falling to estimate changes to the underlying demand.

Phoenix Has Mojo

This new metric shows that Phoenix has a ton of upward price mojo. Only Portland, the hottest market in the country right now, has similar upward momentum.

Portland and Phoenix Mojo

Next Week

I’ll update the “Phoenix Real Estate Market at a Glance” graph next week when the MLS comes out with their April data.

It’ll be interesting to see if this new metric foreshadows changes to Phoenix home prices.

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Paradise Valley Home Sales

Valid for Two Weeks Only
Link expires April 30

Click here to see recent homes sold in Paradise Valley, AZ.

You can do your own custom sorting such as sorting by cost per square foot. Just click the “List” tab and then click on any column heading.

To get email updates on homes sold in Paradise Valley are anywhere else in metro Phoenix, call me at 480-463-4475. -John

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Oh, and by the way, the mortgage finance system is still broken 8 years later.

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At least according to this article.

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I got a call from a reader yesterday about the Scottsdale real estate market. She was worried that home prices might be weakening in her area. Also, she had watched this video of mine where I stumbled onto some erratic graphs for the Scottsdale real estate market.

Before I checked out the situation in her community, I reviewed the Scottsdale real estate market as a whole and that’s what I’m showing you here.

Click any of the charts to enlarge them.

Scottsdale Price per Square Foot Weird

Scottsdale Price per Square Foot Homes Sold

The price per square foot in Scottsdale increased sharply from October to January but then fell sharply in February 2016. What’s going on? Is February an anomaly or a trend?

Scottsdale home sales strong

Scottsdale Home Sales

The number of homes sold in Scottsdale in February were up 3% compared to February 2015. So the number of home sales is fine.

Number of homes listed for sale up 14% in Scottsdale

Scottsdale homes for sale

That inventory change could be causing some of the market weirdness.

Inventory up 21% in far North Scottsdale

North Scottsdale homes for sale

Okay, home sales are up a bit in Scottsdale but the supply of homes for sale is up a lot more, especially in far north Scottsdale in zip codes 85266 and 85262.

New listings hitting the market up 24% in Scottsdale in February

Scottsdale New Listings Feb 2015 vs 2016

There’s the culprit! More people are putting their homes up for sale in Scottsdale this year. But was February a fluke or a trend?

Number of new listings in early March double last year!

Scottsdale New Listings March 2016

It’s only 4 days so I assume it’s a fluke but, Yikes!, double is a big number.

I’m going to assume it reflects a longer term trend this year of more people in Scottsdale deciding to put their homes up for sale.

Conclusions

It’s still early in the high season. I’ll have a much better idea of what the 2016 Scottsdale real estate market is going to look like in a month.

I had assumed that Scottsdale home prices would increase strongly in 2016 – as strong or stronger than in 2015.

But if the number of homes hitting the market continues at the February pace, then Scottsdale home price appreciation won’t be as high in 2016 as it was in 2015. 

I don’t know exactly why the new listings are increasing so much. If you have a theory, please leave a comment.

I don’t think the rest of the Phoenix real estate market is seeing this but I was only diving into the Scottsdale market today.

Stay tuned.

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Purchase Price vs Sale Price

Man, that’s gotta hurt. You pay your mortgage reliably for 10 years and the house still sells for less than the purchase price. ARMLS.

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I’m trying and figure out what the hell happened during The Great Real Estate Bust so I’m going back over my old posts here in this blog to see what I was thinking at the time and to find the clues about the future that I missed.

It’s sort of therapy for an economist.

September 2006

For the Arizona housing market it’s a race between housing inventory and economic growth. As long as the economy stays strong, the housing market can work it’s way through the huge overhang of unsold homes.

If the economy tanks before the inventory gets into line, then we would enter an economic slowdown with an already high inventory of homes to begin with.

My ballpark guess is that the economy will be fine for the next 12 months at least. If the economy can stay strong for 2 years, the housing market should be able to work it’s way through the excess inventory of homes from 2006.

The key to reducing the inventory is putting families (owner occupants) into homes that are currently owned by investors… and for home builders to get their act together regarding their own inventory. »

A lot of homes bought from 2005 to 2008 in Phoenix were so expensive with such large mortgages that they would never be cashflow positive as rentals. Later on we learned that some people lied and said their investment homes would be their primary residences in order to qualify for much better loans. I wonder, however, how often mortgage companies looked the other way.

Many rented out their investment houses to cover some of their expenses but only for a year or two while the homes appreciated. That was the plan anyway.

Those investors were betting 100% on appreciation and as it started to become apparent that appreciation had stopped, some got scared and started to put their investment houses back up for sale in hopes of breaking even, then in hopes of not losing too much money, and then later they gave up all hope and started to walk away.

The recent home price boom started in California, then spread to Las Vegas before arriving in Arizona. Hopefully, this article about “short sales” in the Sacramento Bee doesn’t foreshadow things to come in Arizona. »

In the autumn of 2006, I thought the market could, in time, absorb those homes that investors were trying to sell on the MLS. I wasn’t thinking much about short sales and foreclosures.

The number of homes entering the foreclosure process (Notice of Trustee Sales) was still within the normal range in the autumn of 2006. The tsunami was later.

Anderson Forecast of the University of California, Los Angeles, forecasts the market prices of homes to hold steady over the next five years. »

I thought it was pretty funny until I saw my comment, “Anderson Forecasts tend to be overly pessimistic.”

Americans are anti-pessimism. Pessimism is bad. Good people are optimistic.

I have a theory that optimists naturally do better in good economies because they expects things to turn out well and they do. They take more risks and it pays off during good times.

Pessimists naturally do better in bad economies because they expect to be disappointed and are. They’re more cautious, they focus on not losing money and it pays off in down markets.

I think of myself as a realist but I’m surprised to find out that sometimes I was too optimistic, way too optimistic.

In the last few days I heard someone on TV (don’t remember who or where) say something along the lines of, ‘When you see a TV show called “Flip This House” you know the boom is over.’

Very clever.

Is it true?

It turns out that “Flip This House” premiered on July 24, 2005.

Holy mackerel!

That’s right when the boom ended!

The median home price in metro Phoenix, Arizona in August 2005 was $255,5000. Last month, August 2006, the median price was pretty much the same at $254,900.

Does that mean when they cancel “Flip This House” it’s a signal to buy real estate?

Or, at least, if you ever see a show called “Foreclose It!” you’ll know the market’s already bottomed out and started rebounding. »

Strangely enough, that’s exactly what happened. A reality TV show called Betting the House started filming foreclosure auctions in Phoenix in September 2011.

The number of foreclosures at that time was about one-third less than during 2010, Peak Foreclosure. And September 2011 was almost the exact month Phoenix home prices bottomed out. They’ve been pretty much rising ever since.

The introduction of that reality TV show called the bottom of the Phoenix real estate market almost perfectly.

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Chatting with a real estate agent friend who’s with a large national franchise, I found out that a lot of their “listings” are promoted internally as “Coming Soon” listings and are sold before they ever hit the MLS. The friend said some luxury listings are sometimes in “Coming Soon” status for months.

It’s a great way for large brokerages to capture both sides of the sale, they represent (make money from) both the seller and the buyer.

I think this is a long term trend. I’m promoting “Coming Soon” more myself but not so I can get both sides of the commission but to improve the odds the seller can cut in half the real estate commission they pay.

However, if large brokerages are shifting toward trying to sell more homes in-house that could explain, at least part, the low (MLS) supply.

Maybe it’s not so much that sellers are not selling for some unknown reason but that the number of homes listed for sale in the MLS is lower and the number of homes listed internally within brokerages is higher.

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Tutorial and Phoenix Market Update


Watch full-size on YouTube.

Phoenix Real Estate Market Update

Supply is down and prices are up. That’s the story. Bye bye.

Why supply is low is a bit of a mystery. But home buyers and sellers just need to know that for the metro Phoenix real estate market as a whole, prices are increasing and given the lowish supply of homes for sale, will likely continue to increase rather strongly for at least a while more.

But that’s for the metro Phoenix market. Your city might be different so check out the video tutorial find out how to find out what’s happening in your specific area of metro Phoenix.

Updated Graphs

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New Retro Design for This Blog

I changed the look of this blog once again.

I had just changed it to a fancy modern theme last summer but decided last week to switched back to an updated version of a theme I used way back in the Dark Ages, 2008-2011. It’s called Thesis.

  • Does the retro look bother you?

Since 2011, I’ve changed the theme of this website 3 times, now 4 times. I’m never happy with it.

But on the other hand, some of the biggest websites on the internet are retro as hell like Craigslist and Reddit. So maybe I should just focus on researching and writing stuff.

Here’s why I changed

Simpler navigation. It’s old school so you don’t have to think. You know automatically how to find stuff.

Easier to browse. Having the posts stacked one on top of the other makes it super simple to stumble upon other interesting posts. Just scroll.

Easier commenting. I’ve been all over the place on commenting. I went from using Facebook commenting, to Disqus commenting, to WordPress’s commenting. I like the commenting system that comes with this WordPress theme because it’s so simple so wanted to try it. I want more comments and discussions. People left the traditional blog commenting systems because of spam but I hear it’s not as big a problem now.

Check it out! Leave a comment. 🙂

Faster webpage loading. This is a little esoteric but the faster a webpage loads, the better Google likes it. Faster pages tend to rank a bit higher in the Google search results. This lightweight WordPress theme is fast.

Better suited to short posts. On my other website, I have a lot of deep-dive posts but sometimes I just want to make a quick comment. This format is great for short blurbs.

Easier for me. I hope I’ll blog more. Blogs with current posts always look better no matter what theme.

Let me know what you think in the comments

  • I’m I getting old?
  • Is this experiment crazy?
  • What do you think?

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