Joe Rinde

August sales in North Central Phoenix 7% over July’s seasonal decline (292 vs. 272). The number of homes listed on the MLS was down 3% to 1423 homes (single family, Town or Patio homes, apartment style condos and lofts).

The median sale price per square foot was $81.33, up $6.93 which is a 9% increase. The graph shows that prices came up in March (prices were down from late last year recovering from the end of the government incentives) and has been holding steady around $75 per square foot since March with a jump to over $80 in August. This is a welcome stabilizing (possibly tending to upward) trend.

The number of homes sold in North Central Phoenix since the beginning of the year climbed early on (again partly recovering from the lull of the end of government supports and the holiday season), but took a dip in July. That is in keeping with the price decline in July, but resumed an upward climb in August.

Price continues to dominate the selection of which homes sell. For more details follow this link http://jrphx.com/Reports/August2011.pdf

I have recently come across some clients looking for low priced homes in the south of Phoenix. One client was interested in a four bedroom one bathroom home that was bank owned, and had suffered water damage. The asking price was $15,900.

The home certainly needed work. The lower part of most walls was missing. There were no appliances and both the water heater and furnace were sitting in bedrooms and did not look like they were in working condition. The client was ready to buy the home and fix it up. The issue then was financing. Although the client could qualify for such a low loan (80% of $15,900), but no lender would make such a small loan. Aside from a lender’s view of such a small return (is it worth the trouble) there had to be a concern that the fees would add up to significant percentage of the principle and it could turn out the lender would be accused of predatory lending! So this mega deal did not happen. Two weeks later the house was under contract, probably with a cash buyer. (You could likely get an advance on your credit card to buy this house.)

Another client was looking in the same general area for a house under $20,000 and having trouble finding one. I found them a six bedroom and 2.5 bathroom home. The home was under 1700 square feet (so you can imagine how small the rooms were). This was also a lender owned property. The asking price was $6500 and after 4 days on the market showed multiple offers! The client did not respond until two weeks later by which time it was, not surprisingly, under contract. You can’t wait on deals like this one.

Home sales in North Central Phoenix stabilized over the period March to June and took a bit of drop on July. That action may be seasonal change, after a strong June, also a seasonal move related to the school year and summer vacation plans.

Out of an inventory of 1461 homes on the MLS as of 1 August 272 sold during July. That 16% implies 5.4 months of inventory (compared to 4.8 in June). Still looks like a seller’s market, but we all know it is a buyer’s market. The secret is the shadow inventory of lender owned properties that have yet to be brought to market. Some of that inventory may never hit the MLS; rather it may be sold in portfolios to larger investors.

Looking at the city of Phoenix the MLS listed 2396 lender or HUDS owned homes out of 9237. These are a mixture of single family, town and patio homes, condo apartments and lofts. Lender owned properties represented 26% of the MLS listing (short sales represent 44%). According to RealtyTrac there were 19,032 lender owned homes in Phoenix on 1 August. Add that additional 16,636 homes to the MLS and the inventory goes up by 180% and the lender owned homes would represent 74% of that inventory!

For more detail on the North Central Phoenix market please look at my report http://jrphx.com/Reports/July2011.pdf. Additional detail can be found at http://jrphx.com/Reports/July2011SalesSummary.pdf

I welcome comment on this blog post

Homes in North Central Phoenix are in high demand. Located a short distance from downtown Phoenix, and only 20 minutes (or less) from the airport, homes in North Central Phoenix offer a suburban atmosphere without the commute.

Roughly defined North Central Phoenix is the area between McDowell Road and Cactus Road and between 7^th Avenue and 32^nd Street. Homes in this area range from apartment style condos to mansions on multiple acres. Home Sales in North Central Phoenix in the month of May were 323, across all types of homes (this data includes only homes that were listed in the MLS). Prices ranged from $10,000 to $1,495,000, with a median price of $95,000. That's quite a range, and not very helpful. Prices per square foot and by home type are more instructive. Even here there is a wide range of home quality and prices, so the range is quite wide.

The following table lists sale prices per square foot by housing unit type, and how many units of each type sold in May.
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If you believe that the market is dominated by lender owned properties you are essentially, but not technically right. The lender owned properties represented 37% (120 homes) of the 323 sold in May. If we group short sales with the lender owned sales, we add 62 homes or 19% of the total. Lender owned and short sales combined were 56% of the sales.

Russell Shaw has said that it is impossible to under-price a home in this market, and I believe he is right. Of the 323 Home Sales in North Central Phoenix 55 sold for more than the list price (that is the last list price prior to the sale). That represents 17% of all sales. Eleven sales (3%) were 110% or more of the list price. The highest over list sale was at 146% of the list price. Such high percentage differences usually occur in lower priced homes where a few thousand dollars makes big percentage difference. In this case it was an apartment style condo asking $12,000 that sold for $17,500.

Homes that sold were priced right. The Home Sales in North Central Phoenix sold at 98% (median) of the list price. So pricing a home high and expecting an offer to negotiate is not likely to happen, despite the May record lowest sale price as a percent of list price of 60%. The median days on market for Home Sales in North Central Phoenix in May were 61 Days. The average of 96 days was skewed by a max days on market of 938 days (over two and a half years)!

Based on the number of houses listed in the MLS at the beginning of June, North Central Phoenix has a 5.3 month inventory. That would indicate a balanced market. Indeed the market would be balanced if there were not an off market inventory of lender owned properties that refills the inventory of for sale properties as lender owned properties sell. Phoenix wide the MLS shows 1284 lender owned properties for sale, while Realty Trac shows 9497 lender owned homes, which implies only 14% of lender owned properties are currently listed.

Please contact Joe Rinde of Keller Williams Realty Biltmore Partners (602) 334-6790 Joe@Rinde.org with questions or comments.

Located on a quiet private street this North Central Phoenix Patio Home provides comfortable living in 2 bedrooms a short commute from down town Phoenix and Sky Harbor Airport. Far enough away to hear the airport sounds, this ground floor one level home, with no interior steps, has been updated in recent years to provide a comfortable get away from the stresses of work life. In today’s real estate market the price is right and for buyers the time is right. With current low interest rates it is cheaper to buy than to rent. North Central Phoenix continues to be a desirable place to live.

This North Central Phoenix Patio Home is close to everything. It is close to freeways (SR51 and I17) to get you anywhere in the Valley of the Sun quickly. Nearby you will find shopping and dining at some of the best eateries in Phoenix. With a walk score of 55 you can leave your car at home (in the two car garage) and get some exercise while you pick up some groceries or take-out for diner. Car repair is just down the street, so you don’t even need a ride home!

Located in the heart of the Madison School District, considered one of the best in Arizona, this home will keep its value better than most. Whether you have children or not, being in the presence of a great school district has its advantages in keeping real estate values high. A new “traditional” school is under construction just a few blocks away. So children can walk to school as well as to walk to do errands for you.

North Central Phoenix covers a wide expanse of real estate values. With apartment style condos starting around $30,000 to $5,000,000 plus properties on Central Ave, there is something for everyone in North Central Phoenix. Located near the Arizona Canal and trails for riding and hiking, this is an outdoors person’s ideal location. Within minutes you can be in the wilderness of the Phoenix Mountains Park and Recreation Area.

North Central Phoenix is a place to explore and even better to do so from your new home in the heart of it all. For those who want a 2 bedroom home with two bathrooms and modern appointment don’t wait to call Joe Rinde of Keller Williams Biltmore Partners at 602-334-6790. If you need more space that can be easily accommodated.