IN-DEPTH ANALYSIS
February 2008
January ARMLS Reports
Resale
Listings
The listing count reported in the January Arizona Regional
Multiple Listing Service (ARMLS)1 Reports,
which were released on February 15th, was 56,874—up 2,361 listings
from the December reports. After a
moderate fall off in the listing count in the fourth quarter of 2007, 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 rose about 4%
from December to January.
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 over 47,000!”
Resale
Sales
ARMLS-reported sales for January dropped almost 15% from the
December sales figure with decrease of 505.
On an annually adjusted basis sales were down 1,482 or about 33% from January
2007. January’s sales quantity is
typically very close to December’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 1,482 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-six 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-six 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-two 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