IN-DEPTH ANALYSIS
May 2008
April ARMLS Reports
Resale Listings
The listing count reported in the April Arizona Regional
Multiple Listing Service (ARMLS)1 Reports,
which were released on May 14th, was 55,726—down 1,355 listings from
the March reports. With the exception of December 2007, the listing count
has been fairly flat for the last twelve months. This current level,
however, is substantially above the record level of listings prior to January
2005 which was 30,046 listings in February 2003.
Resale Sales
ARMLS-reported sales for April rose about 13% from the March
sales figure with an increase of 572. On
an annually adjusted basis sales were down 652 or around 12% from April 2007. April’s sales quantity is typically higher
than March’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 thirty-first consecutive month. This drop of 652 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 thirty-one 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
thirty-one 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-seven 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