Tuesday, January 12, 2016

Phoenix Real Estate in December: Sales up 4%, Inventory down 8%

by Bill McBride on 1/12/2016 08:34:00 PM

Wednesday:
• At 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 2:00 PM, the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

• At 2:00 PM, The Monthly Treasury Budget Statement for December.

On Phoenix:

This is a key distressed market to follow since Phoenix saw a large bubble / bust followed by strong investor buying.

For the thirteen consecutive month, inventory was down year-over-year in Phoenix. This is a significant change from the prior year.

The Arizona Regional Multiple Listing Service (ARMLS) reports (table below):

1) Overall sales in December were up 4.3% year-over-year.

2) Cash Sales (frequently investors) were down to 23.9% of total sales.

3) Active inventory is now down 8.0% year-over-year.  

More inventory (a theme in 2014) - and less investor buying - suggested price increases would slow sharply in 2014.  And prices increases did slow in 2014, only increasing 2.4% according to Case-Shiller.

With falling inventory, prices increased a little faster in 2015 (something to watch if inventory continues to decline).   Prices are already up 4.6% through October according the Case-Shiller (about double the pace for 2014).

December Residential Sales and Inventory, Greater Phoenix Area, ARMLS
  SalesYoY
Change
Sales
Cash
Sales
Percent
Cash
Active
Inventory
YoY
Change
Inventory
Dec-085,524---1,66530.1%53,7921---
Dec-097,66138.7%3,00839.3%39,709-26.2%1
Dec-108,4019.7%3,93946.9%42,4636.9%
Dec-117,843-6.6%3,63546.3%24,712-41.8%
Dec-127,071-9.8%3,21145.4%21,095-14.6%
Dec-135,930-16.1%2,05334.6%25,51120.9%
Dec-146,4759.2%1,89329.2%25,052-1.8%
Dec-156,7564.3%1,61723.9%23,053-8.0%
1 December 2008 probably includes pending listings