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Market Update November 2015

Clear Title of Arizona is pleased to provide its clients with the Clear Connections Monthly Market Update. This report will provide you with the latest real estate trends.
Our business is built around the concept of educating and providing the personal service that Real Estate Agents and Lenders have come to depend upon. It is with this philosophy that we offer data from the ASU W.P. Carey School of Business to our clients, associates and friends. It is intended to keep you informed on critical market trends that affect our businesses.
Please visit http://research.wpcarey.asu.edu/real-estate/residential-overview/ for a complete breakdown of the current real estate housing market.
nov15SFsaleschartSingle family homes sales increased year over year in three sectors:

  • Normal re-sales (up 23%)
  • New homes (up 22%)
  • Investor flips (up 38%)
  • HUD sales (up 54% – but from a very small base)

Single family home sales decreased year over year across four sectors:

  • Short sales and pre-foreclosures (down 17%)
  • Bank owned homes (down 31%)
  • GSE (Fannie Mae, Freddie Mac, etc.) owned homes (down 55%)
  • Third party purchases at trustee sale (down 3%)

The change in total dollars spent on homes was slightly more favorable than the change in the unit count.

  • Total dollars spent on single family homes rose by 24% above September 2014.
  • Total dollars spent on townhouses & condos rose by 19% above September 2014.

Overall pricing for single family homes has been stable for the last 18 months, but moved higher during the spring of 2015 and then settled back during the summer. During September pricing moved a little higher again. This is a common seasonal pattern.
Median Sales Price
nov15mediansalesprices
The median sales price was up 7.7% from $209,000 in September 2014 to $225,000 in September 2015
New Homes Sales
New built single family homes saw 1,100 closings in September, 12% more than August and 22% above September 2014. The total dollar value of single family new homes closed in September was up 25% from $303 million in 2014 to $379 million in 2015.
The average sq. ft. of a new single family home in September was 2,494 while the average sq. ft. of a normal re-sale was 2,036. The fact that the average new home was 22% larger than the normal re-sale confirms the extent to which homebuilders have abandoned the entry-level market in favor of the move-up market, even though this percentage has dropped slightly over the past 3 months. It also shows us why the median sales price of new homes is 31% higher than for normal re-sales, but the average price per square foot is only 3% higher.
The market share for new single family homes went up to 13.8% in September slightly ahead of the 13.6% we saw in September 2014.
Demand
Single family homes were up 19%. Homes priced over $500,000 is up from 21% last year. However the growth was very much in the range between $500,000 and $2 million while sales of homes over $2 million dropped 33%. This is probably due to the impact of stock market volatility and uncertainties in the global economy during August and September. Entry level homes under $200,000 lost market share from 26% to 22%, due to poor supply. The mid range between $200,000 and $500,000 rose from 53% to 57%, benefiting from plenty of both supply and demand.
Total price for single family homes sold in August
nov15demand_guage2
numbers reflect single family homes only
Total units for single family homes sold in August
nov15demand_guage
Average Price Per Square Foot
nov15average_price_sqftAverage price per square foot gained 4.3% from $126.28 to $131.77
Supply
The number of active single family listings without an existing contract was 15,034 for the Greater Phoenix area as of October 1. This is up 5.6%, since September 1. The inventory of single family homes under $150,000 stands at a very low 32 days, down from 57 days a year ago. Overall we have seen 0.3% more new listings created in 2015 than at the same stage in 2014, and about 0.2% fewer than in 2013 and 1.9% more than in 2012. We expect the active listing counts to increase over the next 2 months, following our usual seasonal pattern.
Changes In transaction Mix
nov15changesintransmix
We saw growth in non-distressed transactions (24%) and new home sales (22%) but distressed transactions fell 21%. Reversions to lenders declined by 27%.
Outlook
At first sight the Greater Phoenix market in September looks pretty strong. Closed sales volumes were up from August and far higher than a year ago except for distressed sales. Prices continue to paint a positive picture. However, we see signs of weakness in certain areas that suggest the fourth quarter may not be as encouraging as the first nine months of 2015. Much of the luxury market will probably tread water and several areas may decline in price until confidence returns to the stock market. The weakest luxury areas are likely to be those that depend most on out-of-state and second home buyers and those at the highest price points.
Please visit http://research.wpcarey.asu.edu/real-estate/residential-overview/ for a complete breakdown of the current real estate housing market.