Bill "Waz" Wasowicz

nventory of Maricopa Arizona subdivision homes for sale continues to spiral downward. It is very hard to predict where the “bottom line” number will be but I expected downward pressure for at least the next month or so until the seasonal buyers begin the exodus back home for the summer.This usually begins at the begiining of April and continues through mid May.

Since the law of supply and demand is in full force, one of the end results is that it is becoming more difficult for financed buyers to purchase a home. Because most of the current listings are investor owned homes that were purchased at the Trustee Sale, the pricing has been very aggressive and is usually at the very high end (or above) what the homes will appraise for. In addition, financed offers are competing against cash buyers and most sellers will lean toward the cash offers, even at a lower price. Mt recommendation to buyers that are financing is to keep your offers as “clean” as possible and at list price. Any seller concessions should be built into the offer price.

It will be interesting to see what happens in the next couple of months when the seasonal buyers leave. Some buyers are still reeling from the higher prices and are waiting until the summer in hopes that prices will drop. This remains to be seen.

ACTIVE: 150, down from 164 Enough said, this is the lowest number I have ever seen.

ACTIVE SHORT SALES: 22, down from 24 With inventory so limited, buyers continue to scoop up short sales and the supply of new listings is barely keeping pace. There are still a lot of distressed homeowners out there (over 250) and many may be waiting until the school year is over to list their homes. Others may still be weighing their options and/or hoping for reflief in the way of a principal reduction.

ACTIVE LENDER OWNED: 11, down from 16 This is a ridiculously low number! Obviously, the lenders still do not seem to be in much of a hurry to release their pent up shadow inventory as new REO listings are at a trickle. If and when they decide to begin releasing these homes, it will most likley have a great impact on values especially if it occurs during the summer.

AWC (short sales with offers): 208, stable from 206 This indicator has remained relatively steady for the past month or so.

PENDING: 285, stable from 290 Newly accepted offers continue to stream in keeping theis indicator very strong. I’ve mentioned this before but this number can be a bit “skewed” as some realtors are misusing this status on their short sales, which should be placed AWC rather than Pending when an offer is received.

CLOSED: 54, up from 27 This is a reflection of the typical end of the month rush to get transactions closed. Not a particularly strong number considering the activity.

FEBRUARY CLOSINGS: 167, down from 177 in JAN I would have expected a stronger number here since this is generally a reflection of offers that were made shortly after the first of the year when the seasonal buyers began to return in force. My take on it is that many of them experienced “sticker shick” at the higher prices relative to last year and it took awhile for them to begin “pulling the trigger”. I expect MAR and APR numbers to be very strong.

ACTIVE RENTALS: 112. stable from 116 I continue to be a bit surprised at the strong rental number. Ever since the first of the year, there has been only about a one month’s supply of rentals available. Some of this is due to seasonal tenants but I think it also has a lot to do with investors taking advantage of the higher prices and focusing more on “flipping” homes rather than turning them into rental units.

View the full spreadsheet: Monthly home data

In spite of the large influx of seasonal buyers looking for homes in Maricopa Arizona, the inventory jumped signifigantly this past week. I’ll go into more detail below but this is very unexpected given the rest of the tracking numbers. Values continue to remain strong with much of the new listing pricing topping out at above what a home will most likely appraise for. It would appear, at least for right now, that buyers will have an easier time locating and getting offers accepted on homes in Maricopa AZ.

ACTIVE: 252, up from 239 As mentioned above, this increase is completely unexpected and is, in fact, the highest number of available homes for sale in Maricopa Arizona since mid-OCT. Since most of the other tracking numbers have remained stable, I have to assume that this increase is a result of an increase in investor homes entering the marketplace, most likely timed for the arrival of our “snowbirds”. Another contributing factor is that I am seeing an increase in the number of traditional sales. The end result is that prices are remaining high with many listings being priced above what they will appraise for. This will give cash buyers a huge advantage as many investors and homeowners will not want to risk a contract “falling out” due to appraisal issues.

ACTIVE SHORT SALES: 52, stable from 55 Short sales continue to stream onto the market at a rate of 2-3 a day but this is being balanced out by the number of offers placed on them. Particularly in the instance of high demand homes (single level homes or “ramblers” in the prime subdivisions), buyers have limited selection and are being forced intot his arena.

LENDER OWNED: 33, up from 29 This is not a substantial increase although I will be watching this sector closely. The “shadow” inventory remains high and lenders copuld decide to accelerate the release of their pent up inventory at any time (or in no time soon for that matter). These homes are being targeted by buyers as the lenders tend to have the homes priced within current market values so appraisals will not be an issue in most cases.

HUD Homes: 4, up from 2 These government backed foreclosures (FHA and VA loans) were a substantial part of the lender-owned inventory not too long ago. It remains to be seen whether or not we will see an increase in this sector. Regardless, only owner occupants can submit an offer in the first 30 days. Also, since these homes tend to be priced around 10% below market value, multiple offers are the norm. There is a 10 day holding period on new listings before offers are reviewed so by the 11th day there are usually quite a few offers submitted meaning a winniing bid will have to be close to market value. So don’t be fooled by the low pricing on these listings. Chances are you will need to pay a much higher price to get one.

AWC (short sales with offers): 180, stable from 176

PENDING: 224, stable from 226 I really expected this number to begin to increase due to the number of buyers in town. Since Patti and I are experiencing a flood of new buyers I have to assume that a number of factors could be in play. The most likley scenario is that since the majority of the non-short sale listings are investor owned and priced well above market value (the old law of supply and demand) it could be that buyers are taking a little longer to assess the market before making offers. Financed buyers are also being slowed down as they have had to weigh the distinct possibility that their offer price may not meet appraisal and they will forfeit appraisal and inspection costs. This is another area I will be keeping a VERY close eye on.

CLOSED: 34, stable from 31 Although a bit low, these numbers are somewhat in line with same time last year. Since it takes 30-45 to close escrow on most contracts, I am not expecting a substantial change in this number until mid FEB.

View the full spreadsheet Monthly home data

Over the past six months, the inventory of single family homes in the subdivisions of Maricopa Arizona has more then doubled, from 440 to over 970. Most of this increase is due to an influx of distressed homes, both short sales and foreclosures. This has occured in spite of the buying activity the buying acticity has remaining relatively steady. The foreclosure moratorium has slowed down the increase over the past two weeks but it is expected to resume as soon as the investigations are finished, most likely after the first of the year.

For buyers of homes in Maricopa, this represents an unprecedented opportunity. Only a few months ago, it was very difficult to purchase a foreclosure home in Maricopa as most were receiving multiple offers soon after being listed. "Highest and best" requests from the lenders was common. Even the more desirable short sale homes were receiving offers quickly. Nowadays, there are many foreclosure homes that have been on the market for well over 30 days and lenders are accepting prices well below their approved price. Short sale prices are dropping to ridiculous levels as most agents and buyers are ignoring them in favor of foreclosures and a quicker response to offers. For those willing to wait, low offers can be placed on short sales in hopes that lenders will accept them or at least counter at a price well below market value.

For sellers, the news is not so good. It is nearly impossible to get an offer on a short sale unless the home is out of the ordinary. As a result, many of the current and/or future short sales will end up in foreclosure. Those owners that have some equity in their home are seeing their potential profits decrease due to the competition. Investors who purchased homes at a foreclosure sale are struggling to achieve the return on investment they were hoping for.

It is unknown exactly what the future holds but if the number of short sales entering the market is any indication, there will be a surge in foreclosures that will begin once the moratoriums are lifted and it will most likely continue for at least a year.

View the full spreadsheet Monthly home data

Happy New Year everyone! The homes for sale market in Maricopa Arizona promises to be a "wild ride"! Inventory continues to edge downward though not at the pace that I expect to happen very soon. I have lived in Maricopa AZ for over nine years and every year come 2JAN it is like "flipping a switch" as seasonal buyers begin to pour into our small community. We already have numerous appointments booked for the first couple of weeks of JAN and expect a lot more to be on the books this week.

This year, unfortunately, the inventory is about 1/4 of what it was at the same time last year. Unless there is a large influx of foreclosures, which is unlikely as the lenders still appear reluctant to release their shadow inventory, homes are going to be very hard to find. Many buyers are going to be relegated to short sales and even those have been on the decline in regards to inventory. That being said, it will be very important for buyers to utilize a local agent that is not only very familiar with the market in Maricopa Arizona but also checks their "Hot Sheets" for new listings multiple times a day. Buyers also need to be prepared to pay above market and apprised value on homes so financed offers will be at a distinct disadvantage unless the buyer has extra cash to make up the difference between the offer and the appraised price. It's the old law of supply and demand at work.

It is also interesting to note that the inventory of rental homes in Maricopa Arizona declined appreciably over the last few weeks. This could open up an opportuntiy for investors.

Here are the latest numbers:

ACTIVE: 229, stable from 228 Large decreases in inventory are most likley right around the corner!

ACTIVE SHORT SALES: 53, stable from 54 I wouldn't be surpirised to see this number "hold its own or even increase over the next month or so as distressed homeowners that were waiting for the Holidays to be over begin the short sale process.

LENDER OWNED: 27, down from 29

HUD: 1, same These government backed foreclosures are hard to predict. The other issue is that they are avialble for owner occupants only for the first 30 days and none of them last that long.

AWC (short sales with offers): 179, down from 229 Due to a busy end of the month and year for closings, combined with a slow week during Christmas break, this number dropped signifigantly. Expect it moderate although a large increase will depend on available inventory.

PENDING: 228, down from 250 Same as with AWC.

CLOSED: 58, up from 41 Due to the typical end of the month (and year) with lenders and title companies wanting to get these closed before JAN.

DECEMBER CLOSINGS: 179, stable from 177 This number is pretty much right on pace from last year.

View the full spreadsheet Monthly home data