RSS Feed by Calculated Risk on 9/08/2014 08:11:00 AM
Monday, September 08, 2014
Phoenix Real Estate in August: Sales down 9%, Cash Sales down Sharply, Inventory up 22%
This is a key distressed market to follow since Phoenix saw a large bubble / bust followed by strong investor buying.
The Arizona Regional Multiple Listing Service (ARMLS) reports (table below):
1) Overall sales in August were down 8.8% year-over-year and at the lowest for August since 2008. Note: This is the smallest year-over-year sales decline this year.
2) Cash Sales (frequently investors) were down about 33% to 25% of total sales. Non-cash sales were up 3.5% year-over-year. So the decline in sales is probably mostly due to less investor buying.
3) Active inventory is now up 22% year-over-year - and at the highest level for August since 2011 (when prices bottomed in Phoenix). Note: This is the smallest year-over-year inventory increase this year, so the inventory build may be slowing.
Inventory has clearly bottomed in Phoenix (A major theme for housing in 2013). And more inventory (a theme this year) - and less investor buying - suggests price increases should slow sharply in 2014.
According to Case-Shiller, Phoenix house prices bottomed in August 2011 (mostly flat for all of 2011), and then increased 23% in 2012, and another 15% in 2013. Those large increases were probably due to investor buying, low inventory and some bounce back from the steep price declines in 2007 through 2010. Now, with more inventory, price increases should flatten out in 2014.
As an example, the Phoenix Case-Shiller index through June shows prices up less than 1% in 2014, and the Zillow index shows Phoenix prices up only 0.1% over the last year!
| August Residential Sales and Inventory, Greater Phoenix Area, ARMLS | ||||||
|---|---|---|---|---|---|---|
| Sales | YoY Change Sales | Cash Sales | Percent Cash | Active Inventory | YoY Change Inventory | |
| Aug-08 | 5,660 | --- | 1,004 | 17.7% | 53,5691 | --- |
| Aug-09 | 8,008 | 41.5% | 2,849 | 35.6% | 38,085 | -28.9% |
| Aug-10 | 7,358 | -8.1% | 3,129 | 42.5% | 44,307 | 16.3% |
| Aug-11 | 8,712 | 18.4% | 3,953 | 45.4% | 26,983 | -39.1% |
| Aug-12 | 7,574 | -13.1% | 3,382 | 44.7% | 20,934 | -22.4% |
| Aug-13 | 7,055 | -6.9% | 2,409 | 34.1% | 21,444 | 2.4% |
| Aug-14 | 6,431 | -8.8% | 1,621 | 25.2% | 26,138 | 21.9% |
| 1 August 2008 probably includes pending listings | ||||||
