New listing count still near lowest since 2000

April 16 – Time to look at new listing counts again to see if we can detect any sign of improvement for buyers.

We look at complete weeks to avoid the weekly pattern affecting counts. The first 14 days of April 2012 saw 4,457 new listings in ARMLS for Greater Phoenix – we ignore out of area listings for this purpose. This was the lowest number since we started counting in 2000. For the first 2 weeks of April 2013 we have had 4,463. By just 6 listings we are not quite at the lowest level since 2000. The additional listings were condos. Single family homes are still at record lows. Mobile homes are down from last year but not as low as in 2009.

If we ignore listings over $500,000 then we are still setting new records for the lowest number of new listings. At $300,000 or below that new listing counts is much lower than last year (3,287 versus 3,668).

Basically there has been no improvement in the supply situation. However demand has eased a bit since last year.

April 15 – Today we look at the ZIP codes with the least increase in annual average sales $/SF for single family home sales comparing April 1 2012 and April 1, 2013. The Bottom 30 are:

City & ZIP Code

Description

$/SF 2012

$/SF 2013

% Change

Rio Verde 85263
Rio Verde

$140.44

$141.14

0.5%

Wickenburg 85390
Wickenburg

$102.26

$106.47

3.2%

Sun City West 85375
Sun City West

$93.44

$98.22

5.1%

Scottsdale 85255
North Scottsdale – Bell Rd to Jomax Rd

$210.73

$224.13

6.4%

Sun City 85351
South Sun City

$64.92

$69.61

7.2%

Scottsdale 85259
Northeast Scottsdale – Shea Blvd East

$170.76

$185.74

8.8%

Sun Lakes 85248
Southwest Chandler & Sun Lakes

$115.67

$125.92

8.9%

Carefree 85377 Carefree

$190.01

$208.70

9.8%

Scottsdale 85266
Far Northwest Scottsdale – N of Jomax W of Pima

$170.94

$188.64

10.4%

Fountain Hills 85268
Fountain Hills

$151.96

$168.07

10.6%

Scottsdale 85260
North Scottsdale – Shea Blvd to Bell Rd

$151.18

$168.05

11.2%

Phoenix 85044
North Ahwatukee

$108.14

$120.37

11.3%

Gold Canyon 85118
Gold Canyon

$111.29

$124.13

11.5%

Paradise Valley 85253
Paradise Valley

$263.35

$294.08

11.7%

Phoenix 85054
Northeast Phoenix – West Desert Ridge

$147.31

$164.95

12.0%

Phoenix 85048
South Ahwatukee

$116.14

$130.50

12.4%

Cave Creek 85331
Cave Creek

$128.72

$145.11

12.7%

Scottsdale 85258
North Scottsdale – Indian Bend Rd to Shea Blvd

$168.98

$191.43

13.3%

New River 85087
New River

$85.80

$97.53

13.7%

Gilbert 85298
Extreme South Gilbert

$100.54

$114.46

13.9%

Mesa 85215
Northeast Mesa

$100.08

$114.00

13.9%

Eloy 85131
Eloy & Toltec

$58.41

$66.57

14.0%

Litchfield Park 85340
Litchfield Park

$74.99

$85.54

14.1%

Scottsdale 85254
Northeast Phoenix – Kierland & Orange Tree

$128.04

$146.49

14.4%

Chandler 85249
Southeast Chandler

$98.01

$112.49

14.8%

Surprise 85374
Central Surprise

$85.13

$97.90

15.0%

Anthem 85086
Anthem & Desert Hills

$93.65

$107.77

15.1%

Mesa 85213
Northeast Mesa – Groves West

$86.06

$99.27

15.4%

Sun City 85373
North Sun City

$66.91

$77.23

15.4%

Scottsdale 85262
Far Northeast Scottsdale – N of Jomax E of Pima

$201.16

$232.89

15.8%

Given that these are the worst performing areas, the percentage price improvements are pretty impressive. In most normal years we would be happy with 3%. We can see that the more expensive areas that didn’t drop so far in the collapse of 2008 are also those have haven’t shown so dramatic a recovery. It is also clear that the areas focused on active adult and retirement communities have seen relatively modest moves upwards.

The areas not mentioned above and below have moved up between 16.2% and 31.8%.

April 14 – Comparing the annual average $/SF for single family home sales on April 1, 2013 with that for April 1, 2012, we find the following top 30 ZIP codes that have seen the largest rise in prices:

City & ZIP Code

Description

$/SF 2012

$/SF 2013

% Change

Phoenix 85009
West Phoenix – 19th Ave to 43rd Ave

$26.32

$44.10

67.5%

Phoenix 85015
Northwest Central Phoenix – 15th Ave to I-17

$50.57

$78.98

56.2%

Phoenix 85033
West Phoenix – Maryvale – Holiday Park & El Oso Park

$30.38

$46.61

53.5%

Phoenix 85017
Northwest Central Phoenix – I-17 to 35th Ave

$29.02

$44.09

51.9%

Phoenix 85031
West Phoenix – 43rd Ave to 59th Ave – Maryvale

$26.15

$39.34

50.4%

Phoenix 85035
West Phoenix – Sueno Park & Desert Sky Mall – Maryvale

$29.18

$43.87

50.4%

Phoenix 85051
Northwest Phoenix – Metrocenter & Mariposa Park

$41.42

$61.94

49.5%

Phoenix 85019
Northwest Central Phoenix – 35th Ave to 43rd Ave

$30.97

$45.93

48.3%

Glendale 85301
Central Glendale

$34.70

$49.54

42.8%

Phoenix 85007
Central Phoenix – 7th Ave to 19th Ave

$90.21

$127.61

41.5%

Phoenix 85008
East Phoenix – Papago & North of Sky Harbor

$56.70

$79.87

40.9%

Mesa 85201
Northwest Mesa

$53.17

$73.49

38.2%

Phoenix 85029
Northwest Phoenix – Peoria Ave to Thunderbird Rd

$49.69

$68.35

37.6%

Glendale 85306
North Glendale

$60.24

$82.39

36.8%

Glendale 85307
Far West Glendale

$50.13

$67.97

35.6%

El Mirage 85335
El Mirage

$44.90

$60.77

35.3%

Phoenix 85040
South Phoenix – East

$38.97

$52.38

34.4%

Mesa 85204
Southeast Central Mesa

$59.58

$79.88

34.1%

Phoenix 85037
West Phoenix – Desert Star Park & Villa de Paz

$42.42

$56.86

34.1%

Phoenix 85053
Northwest Phoenix – Conocido Park

$55.37

$74.20

34.0%

Phoenix 85043
Southwest Phoenix

$42.96

$57.53

33.9%

Youngtown 85363
Youngtown

$40.21

$53.81

33.8%

San Tan Valley 85143
South Queen Creek – Johnson Ranch

$50.14

$67.09

33.8%

Glendale 85302
North Central Glendale

$51.02

$68.10

33.5%

Scottsdale 85251
Central Scottsdale

$134.23

$178.06

32.7%

Phoenix 85006
Central Phoenix – Northeast – Coronado

$61.43

$81.39

32.5%

San Tan Valley 85240
Northeast Queen Creek

$51.32

$67.96

32.4%

Phoenix 85041
South Phoenix – West

$45.20

$59.86

32.4%

Mesa 85202
West Mesa

$68.47

$90.56

32.3%

Phoenix 85021
North Phoenix – West Sunnyslope

$90.78

$119.73

31.9%

Note that we have ignored the tiny ZIP codes with an average of fewer than 5 sales per month.

There are some very obvious trends here. Most of West and South Phoenix is very strongly represented in the Top 30 along with nearby areas in other western cities. The lowest priced west valley areas tend to be those that have risen most. There are also a handful of areas that have risen fast in the southeast valley, mostly those with the lowest prices to start with. These areas were those that lost most value during 2008. So what we have seen here is a sharp recovery to rebuild some of that value, although none of them have reached the price levels of 2006 and most are still far below that level..

Scottsdale 85251 is the obvious stand-out in this Top 30. It has risen in price much faster than any other part of the northeast valley and faster than any other of the higher priced areas of the Greater Phoenix valley. Its proximity to amenities and the airport appears to be working in its favor.

Tomorrow we will look at the Bottom 30.

April 13 – When we measure sales prices on a monthly basis there is often a lot of volatility between one month and the next, especially if we are looking at a small geographic area. If we look at a moving long term average then we reduce the noise and get a much clearer signal. Unfortunately it also means we get the signal very much later. There is no ideal solution to this problem. For large areas then a monthly average probably has enough samples that we already reduce the noise to a tolerable level. For example, the monthly average $/SF chart (see below chart 1) for all areas and types is more useful than the equivalent annual average $/SF chart (see chart 2 below). The early indication of a change in direction that we see in the monthly version is preferably to the smoothness of the annual chart. The annual chart is only useful as a history lesson.

Chart 1

Chart 2

However as we divide the market into smaller and smaller segments, the monthly chart gets more and more erratic until it becomes hard to derive useful signals from it. We can use 3-month, 6-month and 12-month moving averages to overcome this problem, selecting the smallest length of time that still gives us a reasonable result when prices are averaged over that interval. This is easiest to do with theTableau Charts for Moving Average $/SF. In this chart you have millions of different combination of county, city, ZIP code, price range, dwelling type and transaction type to choose from. However it can still become meaningless if you choose too small a sample size. My advice is to make sure every month has a least 10 sales if you wish to be able to discern reliable meaning from the charts.

For ZIP codes, we generally prefer the annual $/SF chart to the monthly $/SF chart. Most ZIP codes are too small to give us consistent readings on a month to month basis, especially in more rural areas like Wickenburg, Eloy, Superior and Tonopah. By using annual average $/SF and comparing ZIP codes we can detect some interesting and consistent trends. In doing so we sacrifice a little topicality to gain the confidence that our conclusions are not based on random chance. We will review some of those conclusions tomorrow.

April 12 – Real bubbles are characterized by a series of emotions among buyers as the top is reached. Enthusiasm turns to exhilaration and then euphoria at the very peak. After the market starts to turn lower, the first reaction is uneasiness, followed by denial and finally by pessimism and eventual panic. At the moment the key emotion felt by home buyers in Phoenix is frustration, possibly coupled with grim determination. Supply has been tight for a long time and there is still not much sign of it easing. In real bubbles there is plenty of supply but it is overwhelmed by an excess of demand way beyond what is warranted by the practical use of the commodity. In Phoenix we have low supply and just an ordinary level of demand, limited by the low availability of finance.

If I look around for examples of real bubbles one of the markets that fits the pattern best would be gold and silver. I have no knowledge of these markets and do not offer any advice. However it is interesting that the all-time top of the gold price curve in dollars occurred in September 2011 just as the housing market in Phoenix hit bottom. Precious metals have been touted for many years as a safe haven, just like homes were in the early part of this millennium.

Would you describe holders of these precious metal commodities as uneasy at the moment? Any signs of denial starting to take hold?