IN-DEPTH
ANALYSIS
June
2008
May ARMLS
Reports
Resale
Listings
The listing count reported in the May Arizona
Regional Multiple Listing Service (ARMLS)1
Reports, which were released on June 16th, was 54,161—down 1,565
listings from the April reports. With the exception of December 2007, the
listing count has been fairly flat for the last twelve months. This
current level, however, is substantially above the record level of listings
prior to January 2005 which was 30,046 listings in February 2003.
Resale
Sales
ARMLS-reported sales for May rose about 15%
from the April sales figure with an increase of 762. On an annually adjusted basis sales were down
158 or less than 3% from May 2007. May’s
sales quantity is typically higher than April’s and seems to be following the
normal calendar cycle. In this normal
calendar cycle, sales tend to be highest in the summer and then gradually taper
off over the next few months before resuming the climb during the first quarter
of each year. The winter months are consistently
the lowest in sales.
Our sources of data for these displays are
the ARMLS reports. In these, there are
three months, January – March 2005, for which we have not shown listing data
because of apparent discrepancies.
Additionally, ARMLS notes that the listing information for March through
August 2002 may contain errors, but we have chosen to display this reasonable
data above.
A Two Year Perspective
The graph below
displays the same data as above, but focuses on only the most recent 24 months.
Adjusted Monthly Sales Trend
Sales, when compared
to one year ago, fell for the thirty-first consecutive month. This drop of 158 is illustrated in the chart
below.
ARMLS REPORTED SALES
The chart is divided
into market condition segments by comparing current sales activity to the sales
activity during the same month in the previous year.
Analysis of these
figures clearly shows the following:
1.
Prior
to thirty-two months ago, sales increased every month for the past four years
when compared to that month in the year prior (from orange to green, then back
to orange).
2.
The
thirty-two most current months (red) clearly demonstrate that the hot market of
March 2004 – September 2005 has totally disappeared.
3.
The
collective increase in sales for the past thirty-eight months (orange and red)
has been at a substantially slower rate than during the preceding thirteen months
(green).
Our Assessment of the Resale
Market
Supply
and demand are interrelated variables in the Real Estate Market. Currently both of these variables are driving the market. Up until two
years ago, demand was the primary driver. Then for the past two
years supply was the primary driver. In the last few months demand has also fallen
off substantially from what we had considered the norm - a pace similar to 2002
and 2003.
Because
of the prolonged over-supply situation, appreciation in resale housing prices
has totally disappeared. The market has now entered a phase where we are
seeing an overall price level decline. A significant price adjustment
will be necessary to realign the supply and demand variable. It is
difficult to tell how long that will take.
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