IN-DEPTH
ANALYSIS
October
2008
September
ARMLS Reports
Resale
Listings
The listing count reported in the September Arizona
Regional Multiple Listing Service (ARMLS)1
Reports, which were released on October 16th, was 54,427—up 858
listings from the August reports. The listing quantity declined in April
through July, and has now returned to approximately the same level as April
2007. 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 August rose about 9%
from the August sales figure with an increase of 519. On an annually adjusted basis sales were up 2,758 or over 80% from September 2007. This is the fourth month that there has been
an increase in sales over the same month in the prior year since September 2005. September’s sales quantity is typically a
little higher than August’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, rose for the fourth time since September 2005. This increase of 2,578 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-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
thirty-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 forty 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 Pinal Counties.
Note: This report was prepared utilizing numbers
from an adjusted August 2008 report published by ARMLS after the distribution
of the August In-Depth Analysis Newsletter. In all cases the impact of
these adjusted numbers is less than 1%.