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Facts, eh? depends on what one interprets as fact. When you skew numbers and only only post statistics that support your point without discussing where they came from, whether those are relevant or meaningful "facts" or not could be debated.
You may have missed it, but the first sentence of the post states that the statistics come from the Cromford Report. It is a subscription that is available to anyone for a very reasonable fee. They get most of their information from the MLS.
I'm not taking a position. I've said this several times, that simplistically speaking, when the demand overrides supply, prices will eventually reverse, but we don't know when. By watching the trend, I hope to see when the prices begin to flatten out and reverse.
In 2005 the supply began increaing and the sales began decreasing. One year later the price began it's decline.
A little over a year ago, the supply began declining, the sales began increasing. In most areas the supply is below 6 months, and even below 4 months in some. So at some point, with the demand beginning to overtake the supply, the prices will begin to increase. That is just the basic supply/demand model. I realize it's more complicated than that.
By watching for trends that show up in the statistics, and watching all the other information that I can gather, I'm in a better position to help determine how my investment business model should proceed.
If others can use the information for themselves, then hopefully I've helped someone to make more informed decisions.
So all I'm doing is posting the statistics that show the trend of the inventory, the trend of the number of sales, and the trend of the pricing. There are many types of statistics that are available on that report, but I only have time to post a few, and I try to use Phoenix, Surprise, Scottsdale and the east valley cities.
It's just another source of information that is not generally available to the public, and I'm hoping that it will be of some value to people who are trying to make sense of what is happening in the market.
It's ok if your feel for some reason that the stats are skewed. I'm not offended. The info is there for you to use any way you choose, or to ignore it.
I also think it's good to question and challenge any information that's posted. It's good that you asked for the source. Now that you know the source you can go there and verify any of the information, and obtain a lot more if you wish.
quote=ivanabacowboy;8617455
I find the investor statistic interesting but very high. Soaking up I suspect the foreclosure REO. Investors in part led us into this mess, maybe in part they aren't such bad guys and will lead us out. ;-)
That's right, and the investors started picking up properties just ahead of the first time home buyers, so they are helping things.
Quote:
Originally Posted by ivanabacowboy
Also one question I have for Capt Bill-not sure if you know. How do they determine that a sale is an "investor"-just if it isn't owner-occupied or is there a "box" to checkoff somewhere
That information comes from the recorders office and it's when a property is non-owner occupied, it's considered an investor property. So that would include any wholesaler who takes title, rehabbers, and landlord investors.
Quote:
Originally Posted by ivanabacowboy
We invent little separate LLC's (and then structure ownership of those LLCs as some far removed subisidiary of the big Bank).
That's interesting. Does that mean that the property doesn't show up as a liability on the books which would deduct from the amount of reserves needed to borrow more funds??
Quote:
Originally Posted by ivanabacowboy
FWIW, I still think Scottsdale is way overpriced.
I took a look at the median price comparison of Gilbert, Phoenix and Scottsdale on Jan 2001 and May 2009.
Gilbert prices in 2001 were 55% of Scottsdale prices
Gilbert prices in 2009 are 50% of Scottsdale prices.
So the relationship of price between Gilbert and Scottsdale have remained close to the same.
Phoenix prices were 40% of Scottsdale prices in 2001, and now they are only 16% of Scottsdale prices.
Of course Phoenix has declined to below the 2001 price level by about 43%.
I'm not sure what all that says about whether Scottsdale is still over priced. I'm just looking at a relationship. It could mean that both Gilbert and Scottsdale are still overpriced.
However, I agree that the Scottsdale address is not worth 50% more than a Gilbert address to me.
...I stand by my point that I made in another thread- the trend of falling home prices in Phoenix- and everywhere else- will flatten out and stabilize when one of two things happen:
1. the average listing prices of homes fall to the point that they approximate the price of the foreclosed homes the banks have for sale (you know, the ones that are actually selling, and comprising the majority of the increased sales numbers Bill posted);
2. The massive glut of unsold homes finally runs out, and supply once again approximates demand.
Now since we're not close to either one of those things...
I understand your points and agree with your point #2.
1. One thing to consider is that the foreclosed homes are, for the most part, not in the same top condition as the majority of the regular sale homes.
Also, they are sold AS IS, with no seller disclosure, and no insurance history available; and usually need several thousand dollars of repair before moving in. Only a few of the foreclosures are move-in ready.
The buyers who are going after these foreclosed homes are learning that the price is lower than the regular sale homes for a reason, and that is that most of them have a lower value, and can be more difficult to purchase. Consequently, I don't think you'll see a regular sale home in a better condition and with a warranty, sell at the same price as a lower condition AS IS foreclosed home.
We're really looking at two different markets there, and while the bank prices will drive the regular sale prices down, they can never be the same price.
2. I agree with you on point 2. Below is a copy of the inventory supply that I posted. You'll see that we no longer have the massive glut of homes that we had a year ago. So we share the same opinion that as the glut disappears then the home prices will most likely flatten and reverse. But it takes time and distance for a moving freight train to come to a stop.
When we get down to below 6 months supply, we’re getting into a Sellers market.
Scottsdale is still up there at 14.3 months supply. However, in February it was around a 23.7 month supply. It made a surprisingly huge drop in just a few months.
Again, there are so many uncertainties in the months ahead that it's difficult if not impossible to forecast a price turn around. But people can see it happening on a monthly basis, and long before the media reports it, if they keep track of the statistics for their area.
Ivanabacowboy posted some excellent information on what to expect to see from builders that will be a strong signal of a market turn around. Part of that is what will be happening with the land sales.
We have a land specialist team in our office and they are reporting a recent upswing in their land sales.
Riiiigghht. We're beating this dead horse again? Honestly. This topic needs no further discussion. I've noticed this repeating trend on the Phoenix forum, one that gives me a feeling of deja vu every time it happens: Captain Bill the RE agent approximately once every few weeks gets an urge to start a new thread filled with new glowing, skewed data to prove that the real estate market in Phoenix is on the imminent verge of recovery, and presents data to hopefully convince everyone to go out and buy RIGHT NOW!! before it's too late. .
I find the information useful as a buyer looking to purchase in the next 6-12 months. Bill provided information. I can use that along with other information to make an informed decision.
My take is that the increased sales information is mixed. It may show a leveling at the low end but I question how much is being driven by speculators and investors. *0% of sales are below $200k. There was a moratorium on foreclosures during the last three months and foreclosure activity may increase significantly adding to supply. The upper end remains anemic. Check out this chart downloaded from Housingdoom.
I find the information useful as a buyer looking to purchase in the next 6-12 months. Bill provided information. I can use that along with other information to make an informed decision.
My take is that the increased sales information is mixed. It may show a leveling at the low end but I question how much is being driven by speculators and investors. *0% of sales are below $200k. There was a moratorium on foreclosures during the last three months and foreclosure activity may increase significantly adding to supply. The upper end remains anemic. Check out this chart downloaded from Housingdoom.
What difference does it make who's buying? The sales count either way. The investor today is not likely to dump the house as the investor of 2006 did. The properties cash flow and the prices are so low that significant appreciation over time is a given - pretty much the opposite of a couple years ago.
The housingdoom figures and Bill's figures show the same thing: If you are looking for a house in the under 300K range, you should be LOOKING for a house. I don't know that someone has to just go out and jump on the first thing that comes along. But, there is clear statistical evidence now to support the long-developing anecdotal reports of a change stirring in the housing markets. For the first time in a couple years, the prospective home buyer needs to consider carefully before renewing his lease for another year.
What difference does it make who's buying? The sales count either way. The investor today is not likely to dump the house as the investor of 2006 did. .
When the investor can no longer flip or the rental market becomes saturated it makes a huge difference. The 45% of sales to investors will need to be absorbed somehow. Those being bought to renovate and resell will eventually be added back to the inventory.
I agree about locking into a lease. I have all my ends tied and should be moving in June and definably want a month to month lease so if I find a house that meets my needs and standards at a decent price I am not tied to a rental. I am looking closer to the $300k range where there is a lot of downside potential remaining so I will remain cautious. In any event prices won't suddenly begin rising but are likely to remain flat for years. They seem to have reached a sustainable level at the sub $150k range.
When the investor can no longer flip or the rental market becomes saturated it makes a huge difference. The 45% of sales to investors will need to be absorbed somehow. Those being bought to renovate and resell will eventually be added back to the inventory.
The rehabbers in this market have to get the property rehabbed and sold within 3 months or risk breaking even or possibly taking a loss. Most shoot for getting it back on the market within 30 days. So they are getting absorbed on a regular basis.
These are the homes that are move-in ready and sold at prices right around the bottom of the regular resale market prices. The market for these homes are the people who don't want to deal with short sales, or fix up an REO, but want to buy below the regular resale price.
Currently I don't rehab anything where my resale price is over $250k because as Markas's chart shows, the higher the price, the more inventory is available.
The landlord investors are in it for the long haul cash flow and capital appreciation, so we won't see a turn over in that type investor property for a few years.
A friend of mine rehabs homes with a $300k max resale price, and has done well because of the way he upgrades and stages them. That price range carries a high risk factor, although the profit potential can be higher.
I don't think there are many investors today that are buying on the speculation that prices will increase so they can flip soon without doing any work. Those are the type of investor/speculator that were prevelant during the boom times.
That type speculator cannot make money in a down or flat market. They require a rapidly increasing market.
One thing to consider in the rental market is that many of the people who are losing their homes will be renting. So that will help the rental market for awhile. I have one of my homes rented to a family that lost their home.
Because the investor buyer percentage is important, it will be good to watch to see when the percentage begins to lower, which should mean that more regular buyers are entering the market. I think as we see that, we may also see the $300k range inventory decline.
A computer programmer friend told me this morning that the number of foreclosures in April was 3 times higher than March so we will see what hits the market this summer. I don't know where he got this information from.
A computer programmer friend told me this morning that the number of foreclosures in April was 3 times higher than March so we will see what hits the market this summer. I don't know where he got this information from.
The April numbers just came out on the Cromford Report. Here they are:
DATE................NOTS......... TDS..........CTS......... CHANGE........PENDING
April 2009...........9,092...........3,106.........2,666 .............3,427...............43,171
March 2009.......10,689..........3,377.........3,168.... .........5,189...............39,744
Then numbers are all condos' and single family residences in Maricopa County
NOTS=Number of Notice of Trustees Sales recorded, TDS=Number of Trustee's Deeds recorded, CTS=Cancellation Notices recorded. CHANGE=The increase or decrease in the PENDING number from month to month. PENDING=The total number of active notices in Maricopa County.
Help me understand those last numbers on the pending forelosures etc.
It appears the only number that went UP was the TOTAL number of pending actions (at any stage of the process if I understand this correctly), BUT the total number did NOT increase by the total of all the "New" actions in April.
Does that mean that the difference from the TOTAL pending were somehow resolved? I E foreclosed upon, or modified etc?
Also, interesting how every category in April actually went DOWN on a month to month basis, according to these numbers.
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