Is the Metropolitan Phoenix real estate market starting to recover? Too soon to say, but prices edged up slightly on sales that were stronger — even if they are still slow — in the August edition of the BloodhoundRealty.com Market-Basket of Homes.
Average prices for Market Basket homes in August were up 0.25%, compared to July. Don’t break out the champagne, though. Year-over-year, prices are still down 1.72%, and down a little less than 6% from the December 2005 high.
A total of 199 sales were recorded, up substantially from July’s total of 151. August is the second-strongest month for 2006, so far, trailing May’s high of 211 transactions. Market-Basket homes spent an average of 78 days on market, four days more than in July. For comparison purposes, 200 Market Basket homes were sold in August of 2003, the last relatively normal year, in an average of 56 days.
As has been the case in recent months, most Market-Basket homes are selling at or above list price. A few deeply-discounted properties pulled down the average, and average discounting netted out to 1.43%, down from 1.61% in July.
Inventories of available Market Basket homes continue their decline. There are now 1,406 homes available for sale in the Market-Basket, where there were 1,506 in July. With sales of 199 homes, the implied absorption rate is a littlle over 7 months, down significantly from almost 10 months in July. A six-month absorption rate is considered normal. The number of homes listed as "Sale Pending" is 179, no change from July.
Based on the idea of the Consumer Price Index market-basket of goods and services, the Market-Basket of Homes uses average sales prices for a small subset of all Valley home sales to get a clearer idea of what is happening in the middle of the bell curve. The alternative method, striking a median among all closed transactions, introduces too many extraneous factors to provide a reliable indicator of what is happening to prices for those homes that are most avidly desired by the greatest number of people. To that end, the Market-Basket of Homes looks at sales prices for MLS-listed suburban homes from 1300sf to 1900sf built in 1998 or later, the homes that drive the resale market.
The BloodhoundRealty.com Market-Basket of Homes is updated monthly and is always available at http://www.BloodhoundRealty.com/MarketBasket.pdf.
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mike says:
What exactly is the “Market Basket of Homes?”
A subset of the Phoenix area MLS?
September 8, 2006 — 11:14 am
Jeff Brown says:
Greg,
I currently have five homes for sale their for a client, and my team has told me the calls have really gone up in the last 7-10 days. And for what it’s worth, El Mirage got the majority of interest. Go figure.
Jeff
September 8, 2006 — 2:56 pm
Greg Swann says:
> What exactly is the “Market Basket of Homes?” A subset of the Phoenix area MLS?
That’s correct. If you pull the PDF, you’ll see how the homes are selected.
September 8, 2006 — 8:58 pm