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Market Update September 2015

Clear Title of Arizona is pleased to provide its clients with the Clear Connections Monthly Market Update. This report will provide you with the latest real estate trends.
Our business is built around the concept of educating and providing the personal service that Real Estate Agents and Lenders have come to depend upon. It is with this philosophy that we offer data from the ASU W.P. Carey School of Business to our clients, associates and friends. It is intended to keep you informed on critical market trends that affect our businesses.
Please visit http://research.wpcarey.asu.edu/real-estate/residential-overview/ for a complete breakdown of the current real estate housing market.
sept15SFsaleschartSingle family homes sales increased year over year in three sectors:

  • Normal re-sales (up 23%)
  • New homes (up 9%
  • Short sales and pre-foreclosures (up 6%)
  • Investor flips (up 29%)
  • Third party purchases at trustee sale (up 11%)
  • HUD sales (up 41% – but from a very small base)

Single family home sales decreased year over year across just two sectors:

  • Bank owned homes (down 22%)
  • GSE (Fannie Mae, Freddie Mac, etc.) owned homes (down 52%)

The change in total dollars spent on homes was more favorable than the change in the unit count.

  • Total dollars spent on single family homes rose by 24% above July 2014
  • Total dollars spent on townhouses & condos rose by 36% above July 2014

Overall pricing for single family homes has been very stable for much of the last 18 months, but moved higher during the spring of 2015.
Median Sales Price
sept15mediansalesprices
The median sales price was up 5.7% from $210,000 in June 2014 to $222,000 in June 2015.
New Homes Sales
New built single family homes saw 926 closings in July, 11% below June but 9% above July 2014. The total dollar value of single family new homes closed in July was up 12% from $289 million in 2014 to $324 million in 2015.
The average sq. ft. of a new single family home in April was 2,556 while the average sq. ft. of a normal re-sale was 2,039. The fact that the average new home was 25% larger than the normal re-sale confirms the extent to which homebuilders have abandoned the entry-level market in favor of the move-up market. It also shows us why the median sales price of new homes is so much higher than for normal re-sales, even though the average price per square foot is almost identical – between $134 and $137.
The market share for new single family homes went down to 10.7% in July compared with 11.6% in July 2014.
Demand
Total single family, townhouse & condo sales were 20% higher than July 2014, with single family homes up 19% and townhouse & condo sales up 32%. Townhome and condo market share was 14.2%, up from 13.0% last year. Homes priced over $500,000 took 23% dollar market share, the same as last year. Entry level homes under $200,000 lost market share from 25% to 22%, while the mid range between $200,000 and $500,000 rose from 52% to 55%.
Total price for single family homes sold in June
sept15demand_guage2
numbers reflect single family homes only
Total units for single family homes sold in June
sept15demand_guage
Average Price Per Square Foot
sept15average_price_sqft sept15average_priceSQFT_month
Average price per square foot gained 4.3% from $125.65 to $131.04
Supply
The number of active single family listings without an existing contract was 14,496 for the Greater Phoenix area as of August 1. This is almost unchanged, down just 0.1%, since July 1. The inventory of single family homes under $150,000 stands at a very low 29 days, down from 56 days a year ago. Overall we have seen 1% fewer new listings created in 2015 than at the same stage in 2014, but about 1% more than in 2013 and 3% more than in 2012. We expect the active listing counts to increase over the next 3 months, following our usual seasonal pattern, but supply remains on a downward trend after accounting for seasonality.
Changes In transaction Mix
sept15changesintransmix
We saw growth in non-distressed transactions (24%) and new home sales (9%) but distressed transactions fell 8%. Reversions to lenders declined by 37%.
OutlookWe saw demand much higher than July 2014 with a 20% increase in combined single-family and townhouse/condo sales. In fact July’s total sales were higher than March, April or May, which is quite unusual. We see a pattern every year of much weaker average pricing on homes above $500,000 during the third quarter. This always recovers again during the fourth quarter and has little lasting impact. We therefore expect the price gains that took place between January and June to be followed by a period of consolidation between July and September and it may be October before prices are able to gain upward momentum again. This upward momentum is primarily driven by entry level homes and certain sought-after sectors in the luxury market.
Please visit http://research.wpcarey.asu.edu/real-estate/residential-overview/ for a complete breakdown of the current real estate housing market.