IN-DEPTH ANALYSIS

April 2009

Resale Sales Analysis

The April ARMLS¹ Reports reported sales of 8,564 which is an increase of 928 from March. On a seasonally adjusted basis sales were up 3,689 from April 2008.

Sales Patterns

There are several different factors that interact to make up the current sales numbers. One of the most significant is the seasonal pattern clearly seen in the graph below. The winter months show the lowest sales volume, while the summer months are the highest in sales. This basic pattern is true for each year displayed. Be cautious of any article that only compares one month to the prior month and does not reference the year prior number.

Additional factors are abnormal market conditions. Examples of these are:

· The investor/speculator craze in 2004 and 2005

· The credit crunch starting mid 2007

Therefore, a comparison of 2006 sales level with that of 2004/2005 just reflects a return to a more healthy market activity level. The further decline in the first half of 2007 is the beginning of a correction for the oversupply situation which was created in 2004/2005. Then the credit crunch hit. Note that the last half of 2008 recovered to a level that is fairly comparable to the first half of 2007.

Over the last four years we have stated that sales similar to the 2002 and 2003 sales volume represented a normal sales level for the Phoenix metro area market with the then current interest rates and job growth. However, interest rates, job growth, population growth and consumer confidence are definitely not what they were when we made that statement. We now believe that the 2001 – 2002 level offers a better reference basis for a normal Phoenix market.

Historical Patterns

In addition to the seasonal pattern, note the monthly sales volume increase of each year from the previous year. This pattern existed throughout 2002-2005, until October 2005. From October 2005 to May of this year, sales were well below that of the same month a year prior. For the past seven months we have seen sales rise above what they were the same month a year prior. This relationship is shown in the graph below.

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¹ (ARMLS) Arizona Regional Multiple Listing Service encompasses 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%.