Is This a Buyer's or Seller's Market?

Here in the metro Phoenix area we are very fortunate to have Michael Orr, founder of The Cromford Report™ and director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University, providing us with the most up-to-date information on current market conditions, including the Cromford Market Index™, which is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years.  The Cromford Market Index™ can be applied to the whole market or to any subset, provided that subset is large enough to be meaningful.  It compensates for seasonal factors and measures supply and demand based on long term historical trends.  Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market. 


Cromford Observation on November 7 - "We are seeing demand continue to fall but at a decelerating rate now we are well into November. It is possible that October was the worst month for buyer sentiment decline in a long time and things look like they may be starting to moderate now. Here are the latest Cromford Market Index™  values for the single family home markets in various cities, and in parentheses a comparison with the previous month (October 7)":

• Sun Lakes - 166.6 (237.6)
• Sun City West - 153.1 (188.9)
• Arizona City - 145.2 (166.7)
• Glendale 107.6 (129.9)
• Sun City - 116.5 (158.4)
• El Mirage - 109.6 (116.5)
• Cave Creek - 109.3 (124.0)
• Paradise Valley - 108.1 (137.4)
• Chandler 106.3 (115.2)
• Apache Junction - 104.9 (124.3)
• Scottsdale 104.2 (131.1)
• Avondale - 104.0 (132.4)
• Phoenix - 100.4 (120.9)
• Mesa - 98.8 (121.0)
• Goodyear - 96.9 (126.7)
• Peoria - 95.8 (121.1)
• Gilbert - 95.1 (110.8)
• Anthem - 91.6 (99.9)
• Litchfield Park - 88.6 (114.2)
• Laveen - 87.3 (113.3)
• Surprise - 85.7 (110.1)
• Tolleson - 86.1 (91.4)
• Fountain Hills - 81.7 (119.0)
• Gold Canyon - 79.9 (95.2)
• Buckeye - 78.3 (93.1)
• Tempe - 74.9 (94.7)
• Casa Grande - 67.9 (84.8)
• Queen Creek - 66.2 (87.5) - includes San Tan Valley unincorporated area
• Maricopa - 53.9 (67.5)

Home Prices Post Strongest Annual Gain in Nearly 8 Years

Source:  Inman News
Date:  11/6/13

Check out the link below to read this informative article...

Home prices rose at fastest annual clip in nearly 8 years in Q3 | Inman News

Home Prices Are Up Again in Metro Phoenix

Source:  ArizonaCentral.com
Date:  11/5/13
Arizona Republic Article By:   Catherine Reagor 
Link to Article:  Home Prices are up again in metro Phoenix

Home prices climbed in metro Phoenix during September, and so did the number of houses on the market. The combination worked to curb sales.

The median sales price reached $199,000 last month, up from $192,000 in August, according to Tuesday’s report from the W.P. Carey School of Business at Arizona State University. Price gains are expected to slow in the rest of 2013. Traditionally, fewer home sales are made in the last months of the year.

“The main change (in the housing market) is a steep fall in demand, which we can see in the 12 percent drop in single-family-home sales just between August and September,” said Mike Orr, director of the Center for Real Estate Theory and Practice at the W.P. Carey School.

“Going forward, we anticipate a much slower rate of price appreciation than the furious pace we have witnessed over the last two years.”

Orr said the government shutdown is at least partly to blame for September’s slower sales. Last month, 7,143 homes sold Valley-wide.

The region’s shortage of homes for sale appears to be over for now. Rising prices are enticing more homeowners to try to sell. The supply of houses for sale in metro Phoenix climbed 32percent during the past year.

Investor interest continues to wane. About 23percent of all sales were investor-driven in September, nearly half as many as in the same month a year ago.

“If the current trend continues, supply will exceed demand by the end of the year,” Orr said.

“We now expect a balanced market to prevail during November. This is great news for buyers since they will experience less competition and be in a strong position to negotiate.”
 

The COST of a Home: Last Year, This Year & Next Year

Courtesy of Keeping Current Matters/The KCM Blog
Posted: 26 Aug 2013

The cost of a home is determined mainly by two components: price and mortgage rate. Today, we want to show how the monthly cost of purchasing a median priced home has changed over the last twelve months and how it might change over the next twelve months. For the first two examples, we will be using the National Association of Realtors’ (NAR) Existing Home Sales Report to establish median price and Freddie Mac’s Primary Mortgage Market Survey to establish mortgage rate. We also assumed a 20% down payment in all examples.

 

LAST YEAR

The median priced home in the country was selling for $187,800. The 30-year fixed mortgage rate was at 3.5%. Here is what it would cost to buy a home last year:

 

TODAY

The median priced home in the country is selling for $213,500. The 30-year fixed mortgage rate is at 4.5%. Here is what it would cost a purchaser to buy a home today:

The monthly cost increased by: $190.78!

 

NEXT YEAR

Projecting into the future in real estate can be rather tricky. To establish future pricing, we depended on the over 100 housing experts surveyed for the Home Price Expectation Survey who called for an approximate appreciation rate of 5% over the next twelve months. For the interest rate, we took the average of the projections from the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae. Here is what these experts project will be the approximate cost of a home a year from now:

The monthly cost will increase by about: $97.32!

 

Bottom Line

From a financial perspective, why wait if you are thinking about buying?

Case-Shiller Report

Case-Shiller Report

August 27, 2013
The S&P/Case-Shiller Home Price Indices are calculated monthly using a three-month moving average. Index levels are published with a two-month lag and are released at 9 am EST on the last Tuesday of every month. The S&P/Case-Shiller U.S. National Home Price Index is calculated quarterly and levels are published in February, May, August, and November, also with a two-month lag. Index performance is based on non-seasonally adjusted data.

S&P/Case-Shiller Phoenix Home Price Index

The S&P/Case-Shiller Phoenix Home Price Index measures the average change in value of residential real estate in Phoenix given a constant level of quality. It is included in the S&P/Case-Shiller Home Price Index Series which seeks to measure changes in the total value of all existing single-family housing stock.

The Cromford Report™

Courtesy of Fidelity National Title Agency

          Luxury Market Report
          Click HERE for Luxury Market Report

          Northeast Valley Market Report
          Click HERE for NE Valley Market Report  

Where are home prices headed this fall?

CBS News/MoneyWatch
August 22, 2013

Article by Ilyce Glink about prices nationwide, with some specific information related to Phoenix metro area (see quote below).

To get an idea of what might happen in the fall, we can look to Phoenix as a microcosm of the national market. Phoenix has unique housing market seasons: While most markets see a natural uptick in sales and prices in the spring and summer and a corresponding slowdown in the fall and winter, Phoenix doesn't.

Its "fall" season happens during the summer -- when it's just too hot outside to buy houses -- and the market naturally slows down, said Michael Orr, director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University. 

During the summer, prices have been stable.

"Prices remained almost completely flat, while last year they lost a few percentage points," Orr said.

For Orr, the discussion of the housing market "going soft" is all theoretical. It's a discussion of what might happen, and not what is happening.