IN-DEPTH ANALYSIS
January 2008
December ARMLS Reports
Resale Listings
The listing count reported in the December Arizona Regional
Multiple Listing Service (ARMLS)1 Reports,
which were released on January 15th, was 54,513—down 2,237 listings
from the November reports. After a
moderate fall off in the listing count in the fourth quarter of 2006, growth in
this number has resumed climbing to an all time high. The record level of
listings prior to January 2005 was 30,046 listings in February 2003. The monthly listing quantity fell about 4%
from November to December.
If individuals seeking to sell their homes do not believe
that the market has changed from 2005, or if they expect multiple offers and
selling prices exceeding the listing prices, they need to read these articles
about the market. Compared to December
2005, listings have increased by almost 30,000!”
Resale Sales
ARMLS-reported sales for December rose a little less than 3%
from the November sales figure with an increase of 94 sales. On an annually adjusted basis sales were down
1,981 or almost 40% from November 2006. December’s
sales quantity is typically very close to November’s and seems to be following the
normal calendar cycle. In this normal
calendar cycle, sales tend to be highest in the summer and then gradually taper
off over the next few months before resuming the climb during the first quarter
of each year. The winter months are
consistently the lowest in sales.
Our sources of data for these displays are the ARMLS
reports. In these, there are three
months, January – March 2005, for which we have not shown listing data because
of apparent discrepancies. Additionally,
ARMLS notes that the listing information for March through August 2002 may
contain errors, but we have chosen to display this reasonable data above.
A Two Year Perspective
The graph below displays the same
data as above, but focuses on only the most recent 24 months.
Adjusted Monthly Sales Trend
Sales, when compared to one year
ago, fell for the twenty-sixth consecutive month. This drop of 1,981 is illustrated in the
chart below.
ARMLS REPORTED SALES
The chart is divided into market
condition segments by comparing current sales activity to the sales activity
during the same month in the previous year.
Analysis of these figures clearly
shows the following:
1.
Prior
to twenty four months ago, sales increased every month for the past four years
when compared to that month in the year prior (from orange to green, then back
to orange).
2.
The
twenty four most current months (red) clearly demonstrate that the hot market
of March 2004 – September 2005 has totally disappeared.
3.
The
collective increase in sales for the past thirty months (orange and red) has
been at a substantially slower rate than during the preceding thirteen months
(green).
Our Assessment of the Resale Market
Supply
and demand are interrelated variables in the Real Estate Market. Currently both of these variables are driving the market. Up until two
years ago, demand was the primary driver. Then for the past two
years supply was the primary driver. In the last few months demand has also fallen
off substantially from what we had considered the norm - a pace similar to 2002
and 2003.
Because of the prolonged over-supply situation,
appreciation in resale housing prices has totally disappeared. The market
has now entered a phase where we are seeing an overall price level
decline. A significant price adjustment will be necessary to realign the
supply and demand variable. It is difficult to tell how long that will
take.
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1 (ARMLS) Arizona Regional Multiple Listing Service empasses
most of Maricopa and