This graph is based on MLS data and is a bit different from the graphs for 14 cities below which are based on ASU data of all home sales.
October was a “slightly” month. Price was up slightly. Sales were up slightly. Listings were up slightly.
Price
The median home price (green line) in Greater Phoenix was flat (actually it increased $100) at $235,000. Often home prices drop in the early Autumn and then level off. That appears to be what is happening.
Sales
The blue line is the number of listed homes sold by month.
October had slightly more MLS home sales (31) than in September. Sales will likely drift slightly lower until closings pick up in February.
Last month I wondered if we would get a little rebound in sales in October as the market digested the August sub-prime meltdown. No rebound. September just established a new lower baseline.
Listings
The inventory of homes listed for sale (red line) in mid-November increased slightly (66 homes) compared to mid-October. We may see a fall next month if 2007 is like 2006.
One thing that won’t be like 2006 is the timing. Between October and November in 2006, the inventory fell by almost 1,000 units.
Conclusion
Right now, it’s likely the market will bide it’s time until the high season begins again next January. My guess right now is the sales in 2008 will be higher than the very low level of sales in 2007. However, given the very high inventory of homes for sale, the median home price will continue to fall. 2008 = Sales up, Prices down.
“MLS Listings” are measured at one point in time, usually the 15th day of the current month. “Median Price” of homes sold and the total number of home “MLS Sales” are for the entire preceding month.
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YoungSnowbird 11.19.07 at 7:44 pm
This is my favorite graph. You really need the inventory numbers to see where the price is going.
I am putting money aside to buy a winter home in Scottsdale. For people like me, seeing prices going down is good news!
I live in Montréal, Québec by the way.
John Wake - Real Estate 11.19.07 at 8:05 pm
It is good for buyers, definitely.
I don’t think Scottsdale prices have moved much, though, if at all. I’ve been wanting to research that for a while now.
Prices per square foot for $1 million plus homes in “mid” Scottsdale have not declined.
http://www.arizonarealestatenotebook.com/images/Scottsdale_Luxury_Home_Tour.pdf
Other price points and areas, I don’t know. I’ve seen a few very well priced homes. It’s not obvious that prices have declined in general, except for Scottsdale condos because of all the condo conversions.
If you are considering buying a condo, now would be a good time to look into it. Prices tend increase in the first months of the year. And the Canadian dollar exchange rate could reverse.
See the Scottsdale numbers here.
http://www.arizonarealestatenotebook.com/2007/11/18/arizona-home-prices-october-2007-14-phoenix-area-cities/
Feel free to call me.
Brian McMorris 11.20.07 at 6:29 am
So now Scottsdale is Shangri-La? It may have had less speculative buying, which means homeowners that are not over-extended and HAD to sell or walk away from their mortgage. But last I looked, Scottsdale had the same big runup as the rest of the Valley (if not even more so), and so, must revert to the mean like the rest of the Valley.
John Wake - Realtor 11.20.07 at 8:15 am
Well, yes Scottsdale is Shangri-La. Thank you for asking.
Seriously, different markets change differently. I don’t expect the Scottsdale market to react the same way as the Queen Creek market.
The entire Arizona market may have been sucked into the California market vortex and may now react very differently than in the past. (I blame the internet.) That is, Arizona used to be an independent market but now, like Vegas, the Valley is more like a sub-market of California.
The run up in prices in 2004 and 2005 was indeed a very California like behavior.
And within the Valley, there are many similar suburbs but there is only one Scottsdale. Scottsdale is a “name” community. It’s known throughout the world.
Mesa is the second largest city in Arizona but I bet in London a heck of a lot more people have heard of Scottsdale than Mesa.
I’m saying the entire Phoenix market may not react like it did in the past and that Scottsdale market will not react like the rest of the Phoenix market.
Brian McMorris 11.20.07 at 6:52 pm
I understand the Scottsdale market is very desirable. Its combination of city planning, scenery and amenities have been the reason for its panache. That is why it was high in the first place and has been for the past 30 plus years (especially if Paradise Valley is included).
But I also think that the economics of housing apply to Scottsdale like anywhere else (affordability). affordability is a blend of interest rates, family income and taxes. In the 90s the national income boom helped push up prices. In the early 2000s historically low interest rates pushed them up. Then, when interest rates adjusted upward after 2003, creative mortgages and rampant speculation (enabled by that creative and blind financing) pushed up prices. Now, the support for pricing is gone, in ALL markets.
CA was getting away with its very high prices because of both the desirability, but also the high paying industries that amp up affordability. California is fortunate to have high end employers that can afford to pay the wages to support those high real estate prices: entertainment, medical, aerospace and electronics within its geography.
But Scottsdale exists alongside other Valley communities and shares the Valley economy and industries and the compensation that goes with those employers (this argument obviously is exempt from snowbirds who don’t worry about a local income). So, starting from a higher basis as a reflection of its top place among Valley communities, Scottsdale real estate values must shrink alongside other communities, unless every resident of Scottsdale is retired and wealthy.
I don’t call for a crash, just an adjustment down that is reflective of the Valley situation, which is fairly severe on a national basis and may be up to a 35% decline when all is said and done (well, if you bought after 2005 this will seem like a crash, as you yourself have said repeatedly).
john paul 11.20.07 at 8:15 pm
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its a Philippine real estate focus on cebu real estate .
give me description or title of your blog so i can link into it to my blogroll
thanks
john paul