Market-Basket of Homes: Values down 1.83% on slow sales
The July BloodhoundRealty.com Market-Basket of Homes is available. Prices down, sales volumes down, but — interestingly — inventory is down. Make of it what you will:
This fall in Valley schools, the faces of the teachers may change, but the kids may be the same. The annual selling season, when parents move in time for children to start the school-year in their new neighborhood, for the most part has not materialized. Home prices for July were down 1.83%, compared to June, in the BloodhoundRealty.com Market-Basket of Homes. More significantly, only 151 home sales were recorded, a fairly low number for this time of year. Average sales prices were down $4,715, from 257,999 in June to $253,284 in July. Values are down $16,591, or 6.15%, from the December 2005 high of $269,875. Market-Basket homes spent an average of 74 days on market, five days more than in June.
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 1.61%, down from 1.75% in June.
A total of 151 Market-Basket homes were sold in July, down from 176 in June. However, inventories of available homes have declined. There are now 1,506 homes available for sale in the Market-Basket, where there were 1,525 in June. With sales of only 151 homes, the implied absorption rate is almost 10 months, but, interestingly, there are 179 Market-Basket homes currently listed as “Sale Pending.” A six-month absorption rate is considered normal.
In the Arizona Regional Multiple Listings Service at large, 6,101 homes have sold against an inventory of 46,269, an implied absorption rate of 7.6 months. There are 6,262 properties listed as “Sale Pending.”
The historical numbers make it plain that we did not experience the traditional selling season, but they also make it plain that a simplistic year-over-year analysis — which we can expect from the Arizona Republic a week or more from now — is misleading.
Number of Homes Sold (with Days on Market)
March 2003 6471 67
2004 8678 60
2005 9959 36
2006 7469 58April 2003 7429 67
2004 8889 61
2005 9567 32
2006 6725 60May 2003 7428 67
2004 8932 56
2005 9853 27
2006 7582 63June 2003 7409 67
2004 9969 55
2005 10225 26
2006 7209 67July 2003 7643 64
2004 8974 51
2005 9326 25
2006 6101 70
Going back to the Market-Basket, Values for July 2006 are up 0.57% over July 2005. In other words, there was almost no appreciation on those homes, year over year. But those homes are up 69.64% compared to July of 2003.
Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing
Russ says:
“The historical numbers make it plain that we did not experience the traditional selling season, but they also make it plain that a simplistic year-over-year analysis –which we can expect from the Arizona Republic a week or more form now — is misleading.”
I find it ironic that you would end a paragraph by chastising the Rag as misleading, and then follow it with a chart that includes the most juiced stats in real estate, the Days on Market. The Days only account for the houses that have sold, so the 217 days and give up folks are removed from the equation. Most egregious is the routine re-setting of the Days to zero with a new MLS number and a touch of fraud.
I remember several months ago as the mainstream media was touting year over year price increases as some markets had already experienced multiple month over month price decreases, several folks at Ben Jones’ site predicted that real estate apologists would soon be demanding comparisons of 2 to 3 years or more. While I suspected that they were correct, it is still terribly amusing to see this sudden “need” for multi-year comparisons arise.
August 6, 2006 — 12:02 am
Greg Swann says:
> The Days only account for the houses that have sold, so the 217 days and give up folks are removed from the equation.
That’s correct. But those listings tend to argue that the sellers are not motivated.
> Most egregious is the routine re-setting of the Days to zero with a new MLS number and a touch of fraud.
This is not possible in ARMLS. You have to be off the market for 6 months to reset the clock. After that rule was passed, Realtors were screwing with the geo-coder to get around it, but they caught on to that. The one way that agents might be fudging days on market now is by showing homes as Sale Pending (no clock running) where they might otherwise use Active-With-Contingencies (clock continues running).
> it is still terribly amusing to see this sudden “need” for multi-year comparisons arise
You see what you want to see, of course. I have always argued that real estate is a long-term phenomenon. During the boom, I fired the few clients who came to me looking for quick kills. In general, I steer clear of people who talk too much about how other people are liars or cheaters or thieves. The only person one can know completely is oneself, and I assume that most reflections about the world outside the mind begin as reflections of the world inside the mind. That’s not conclusive, but it’s useful as a rule of thumb. Plus which, it limits my downstream liability, and I end up working with people I like, as against people I don’t like. A very Roman kind of integrity of ends.
Always delighted to hear another anti-epistemology, though.
August 6, 2006 — 12:31 am
Robert Cot says:
Thank you for confirming what the Ben bloggers predicted last year; that as soon as y-o-y went negative then the baseline would be reset to 2003/2002 and thereafter the phrase will be “long-term signficantly outpacing inflation” followed eventually by “when tax benifits are taken into consideration.”
I did learn something. I never would have imagined that the ARMLS carried property histories by address rather than MLS number. So when a property changes agencies the new MLS references the old and carries the DOM forward or is the same number reused? How do agents report their performance when they only have the listing for say 3 weeks but the MLS lists the property having sold after 217 DOM?
The other mystery is how you can profess simultaneously “the only person one can know completely is oneself” and at the same time delve into the hearts and minds of would be sellers and see in their souls that these “sellers are not motivated.”
August 7, 2006 — 7:45 pm
Russ says:
“This is not possible in ARMLS. You have to be off the market for 6 months to reset the clock. After that rule was passed, Realtors were screwing with the geo-coder to get around it, but they caught on to that. The one way that agents might be fudging days on market now is by showing homes as Sale Pending (no clock running) where they might otherwise use Active-With-Contingencies (clock continues running).”
Actually, this is false. Completely false.
If one small data point is changed, then the Days on Market can be reduced to zero. Slight manipulation of the address is the most frequent method used to achieve this fraud after cancelling the first listing. I have ARMLS access to handle my own transactions, and can tell you that more than a third of listings that I come across are re-set in this way. I report the violations, and most that I report are eventually fixed by ARMLS. But I only check the MLS history on probably 20 houses a week. That leaves the remaining inventory pool that can be manipulated. Of course, if ARMLS tied the Days on Market to the assessor number, it might prevent this fraud. Or better yet, suspend the account of anyone who commits this fraud. But the organization is not doing that, nor will it.
August 8, 2006 — 2:56 pm
Robert Cot says:
Mr Swann. “Russ” calls you on ARMLS DOM data. Where is your reply?
August 9, 2006 — 6:52 pm