STAT Market Update: March 2016

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Each month Tom Ruff of The Information Market gives his stellar commentary on the housing market. Tom is armed with Pending data of which others do not have access. His insights are below. Read the full issue of STAT for the accompanying graphs.

The first quarter officially ended with a sales volume increase of 3.14% over last year. We have averaged nearly 311 sales per day compared to 306 last year so far in 2016, taking into consideration that there were 62 business days in the first quarter of 2016 compared to 61 in 2015. The increase in sales volume was accompanied by annual increases in both the median sales price as well as total inventory. The median sales price saw a 7.87% increase with total inventory numbers up 4.5%. The increase in total inventory broke the pattern of steady declines seen since last year. Even with the increase, total inventory is below normal levels with serious shortages at the lower end of the market. Our rising but lower than normal inventory levels are best explained by the handsome and articulate Mike Orr of the Cromford Report:

This is deceptive for much of the market because almost all of the missing homes for sale are at the affordable end of the market below $175,000, where they are missing in huge numbers. The absence of the normal low end supply is not just in homes for sale. Affordable homes for rent are also extremely scarce. Entry level buyers and potential tenants are facing strong rises in price with no sign of relief.

I thought it might be interesting to look at quarterly Maricopa County real estate activity as an average business day. Think of it as a day in the life of the real estate market via public records. I’ve attempted to group the data by areas of focus. When reviewing the numbers you’ll see just how consistent and stable our market has been year-over-year with just a few exceptions. The data is a compilation of Maricopa County public records data enhanced with MLS data. Side note – all of the data is accessible in Monsoon.

Foreclosures
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Anyone hoping to buy a property on the court house steps has limited opportunity and can expect professional competition as only 8 properties per day are successfully purchased, just over 6 properties per day are returning to the banks.

Bank Sales
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If no one bids on a property after going to auction it reverts to the beneficiary, in most cases a bank. The bank will then sell the property or deed it to a guaranteeing government entity such as HUD, VA, Freddie Mac or Fannie Mae. GSE stands for a Government Sponsored Enterprise and consists of Fannie/Freddie sales. Simply put, 6 properties per day are returning to the banks via foreclosures and 8 bank sales are occurring for a net reduction in REO inventory of 2 each business day. 8 ARMLS STAT MARCH 2016

Distressed Sales
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Active notices refer to homes that were sold while in foreclosure. By definition, a notice of trustee sale had been filed against the homeowner and the property has a scheduled auction date. An active notice gives a home owner additional motivation to sell. Active notices are being used as a lead source by agents for perspective sellers. Most of the properties that have an active notice sell as short sales. The active notice tag just stresses an added urgency to sell. Agents specializing in this arena are selling about 9 homes combined per business day.

Flips
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Flips are defined as any home that was purchased and then resold in a 6 month period. There are two basic types of flips, wholesale and retail. The wholesale market takes place primarily between investors and these flips can be identified by a very short period of time between the purchase and sale with smaller mark ups. Most flips are retail and this is where it gets interesting as they tell us quite a bit about our market. Flips are normally purchased at below market prices, renovated and then sold for prices that fall into the upper range of what the market will bear. Flips account for 23 home sales per business day.

Traditional Sales & New Construction
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Our market is now dominated by traditional sales. New construction is up approximately 36% year-over-year and is one of the exceptions I mentioned earlier. This is good news for our economy as it means not only an increase in construction jobs but also an increase in business for the trades that market to the buyers of newly built homes.

Financing Activity
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The two tables above compare year-over-year financing activity by daily averages and the ratio between the mortgage amount displayed on the deed of trust and the sales price reported on the affidavit of value. These tables compare March 2015 data and March 2016 compiled from Maricopa County public records. When we look at the yearover-year percentage change of these we see the second notable change in our housing market, an increase in conventional financing. The tables above and chart on the next page clearly reflect this change. What’s the significance of this change? I don’t believe it’s an 9 ARMLS STAT MARCH 2016 indication of buyers having more cash for down payments, but rather an indication of buyers either trading up or trading down and using the equity in the home they are selling to make their new purchase. This is an emerging trend and definitely good news.

ARMLS Pending Price Index (PPI)
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Our last Pending Price Index projected a March median price of $215,000 with the actual median coming in at $215,800, off by 0.37%. Sales volume in March as reported by ARMLS was 8,412 which was 412 sales more than our projected volume of 8,000. Looking ahead to April, the ARMLS Pending Price Index projects a median sales price of $220,000. We begin March with 7,476 pending and 4,538 UCB listings giving us a total of 12,014 residential listings practically under contract. This compares to 11,997 of the same type of listings at this time last year. We expect sales volume in April to be very similar to the numbers last year with an increase in the median sales price. Our projected sales volume for April is 8,400. March was a great month over all as it increased in year-over-year sales volume by 6.5% and the median sales price increased by 7.9% over last year’s numbers. In closing I’d like to share a quotation from Sean Becketti, Chief Economist at Freddie Mac, referring to his outlook for the national housing market in 2016:

Housing markets are poised for their best year in a decade. In our latest forecast, total home sales, housing starts, and house prices will reach their highest levels since 2006. Low mortgage rates, robust job growth and a gradual increase in housing supply will help drive housing markets forward. Low levels of inventory for-sale and for-rent and declining housing affordability will be major challenges, but on balance the nation’s housing markets should sustain their momentum from 2015 into 2016 and 2017.

Are Flat Fee / Limited Representation Listings Allowed in the MLS?

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The MLS has no shortage of interesting listing fields. But one of the fields you won’t see is Limited Representation. Flat fee / limited representation listings occur when a real estate broker accepts a flat fee rather than a percentage of the sale price for the selling side of the transaction without requiring the seller to use all services. While services can sometimes include benefits such as lockboxes and monitoring, the seller is mostly responsible for their side of the transaction. These agreements and business models are practiced by brokerages and agents in our market.

Yes, flat fee / limited representation listings are allowed in the MLS.
Deciding which brokerages and models succeed or fail is not the role of ARMLS and in 2005, the Department of Justice filed a complaint against the National Association of Realtors for policies it perceived as limiting competition in violation of the Sherman Act. After a few years of investigation and a few more years of litigation, a settlement was finally agreed upon that ensured limited representations listings be allowed.

Additionally, one of the provisions of the settlement prohibits MLSs from creating MLS fields to identify limited representation listings. While it’s not required, listing agents can disclose a listing has limited representation in the private remarks section.

The Sweet Spot: Improved Map Overlays

Multiple Map Overlays Improved With Better Logic

Flexmls has undergone a major improvement when using multiple saved map overlays in the same map search. Previously, only listings found in the overlapping areas were displayed. Now, the search looks for results in any of the overlays.

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This is not to be confused with map shapes that already worked in this manner. Being able to re-use and combine multiple map overlays in the same search is powerful. For example, it’s often better to draw subdivisons than use the Subdivision field:

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The New NHS Pro is Live

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New Home Source Professional has been redesigned to not only look better, but to bring you more of the functions you requested. You now have:

• A save option for new home searches

• Ability to share an agent-friendly, new home URL (where you can add your own branding)

• A modern look and feel

• An ad-free experience

One thing that hasn’t changed is its location. You can still find it in Flexmls under Products– New Homes- NHS Pro.

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What is the ARMLS Service Area / Geographical Limitations?

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We do not have a service area defined by geography, meaning that Subscribers can place listings in the MLS from anywhere in the world. For 33 years, there have been no rules that impose geographic limitations to where your listing must be located. Of course, can and should are two different things, so talk to your broker about their requirements.

What grid code do I enter?
When entering an out of state or out of country listing, use the Out of area grid code C90.

How do I search for out of state / out of country listings in our MLS?
In a quick search, select the option in City/Town Code (Outside of Arizona, Outside of Country)

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How do I search for MLS listings not in our MLS?
There are no offers of compensation across MLSs, but it is possible to search other MLSs. In Flexmls you can also search the Tucson Association of Realtors MLS by clicking on MLS of in a quick search:

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In Monsoon you can search PAAR MLS and SVVAR MLS by preforming an MLS search and selecting the desired MLS you wish to search:

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5 Obscure MLS Fields

Houses, even tract homes, are as unique as the homeowners who occupy them and the clients looking for them. While not the most common, these five interesting MLS fields can help you customize your client’s search and nail the sale.

  1. Runway Access
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    • You know the saying “Home is where you park your personal aircraft”. There are 34 listings that give your client room to spread their wings and enjoy the open sky.
  2. Low/No VOC paint 
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    • There are 251 options on the MLS for homes with painted exteriors that contain low or no VOC (volatile organic compound). If you have a buyer who’s particularly eco or health conscious, they have some options.
  3. Gray Water Systems
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    • Gray water systems are incredibly practical, especially for desert living. The system works by recycling the water from showers, sinks and the washing maching for use in exterior lawn/plant watering.
  4. Wet Bars
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    • If your client is longing to play “Cocktail” at home, 2,217 listings can make their bar tending dreams come true with a built-in wet bar (a bar with a working sink).  
  5. Temperature Controlled Parking 
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    • Plan on never leaving the garage with 299 homes complete with garage A/C or heating.

ICYMI- March 2016

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Here are a few digital highlights from March, in case you missed it.

128px-Feed-icon.svg  Blogs 

Sedona (SVVAR) Listings Now in Monsoon mean you can search SVVAR and PAAR listings in Monsoon. The History of the “I Voted Today” Sticker sheds light on the connection between the “I Voted” sticker and the Phoenix Board of REALTORS® . Take a walk down memory lane with a summary of Baseball in the Valley. We’ve also made some Updates to the Listing Rules and Policies. Forget your RETS password? We help you get back to business with What’s My RETS Password? There’s also a New Opt-In Status Report that lets you view subscription statuses for all your contacts. We also take the mystery out of Flexmls with Flexmls Portal Changes 2016 Explained

Facebook_Vector_Logo_Hd_02  Facebook 

The #50ReasonsYouNeedARealtor series continues with your Realtor getting access to all the listings, not just a few online and handling the price negotiations. Follow along with our GIF to quickly copy a listing in Flexmls. Residential Foreclosures in January continued to show slow recovery in the housing sector and a detailed numbers comparison shows the Our monthly STAT Report now includes downloadable JPGs of the charts. February foreclosure numbers show steady improvement around the Valley. We also show the reality of renting vs owning a home in one clever infographic. 

twitter-bird Twitter

In the Twit-O-Sphere, we warn about a new real estate scam that’s popping up around the country, iPhones that crash after clicking on links, how local chefs feel about food festivals, and the new selfie payment method Amazon wants to make a reality. We also show you home colors that impress and distress buyers, bring you eight ways to improve home value and provide 20 tips for a healthier home.

Activating Show and Go

Appointment requests on vacant properties got you down? Save yourself significant time, hassle and inconvenience by setting up Show and Go mode in ShowingTime.

Show and Go is an easy to use mode that lets other Subscribers automatically make appointments on your vacant listings without needing your approval.

1. In Flexmls, access ShowingTime from the Daily Functions tab.

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2. Click Listing Setup and select your listing. 

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3. Change the Appointment Type to Courtesy Call or Show and Go.
Click Save Changes.

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In addition to fool-proof appointments, you can control when and how you’re notified about new appointments and review all appointment activity on your calendar overview.
You can learn more about ShowingTime, watch tutorials or sign up for ShowingTime classes on our website

Updates to the Listing Rules and Policies

We’ve had some recent changes to the listing rules and policies. While most of the new updates are pretty innocuous, there is a major rule change you should review.

Photos / Media
Previously, photos were restricted to the property, either the view from the property or the property itself. Now, photos can be used to express additional benefits of the property or lifestyle amenities.

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Other Updates 
In addition to a new photo policy, we’ve fixed typos, formally added CCBS to existing documents, added pending status to the IDX dataset and cleaned up definitions per NAR.

Redline Documents
To see all changes verbatim, we have drafting documents that show where changes have been made. Please note that these documents are the rough drafts, the final official documents can be found on the ARMLS.com/Rules.

http://www.armls.com/docs/data-integrity/rules-3-29-2016-redlines.pdf

http://www.armls.com/docs/data-integrity/penalty-policy-3-29-2016-redlines.pdf

http://www.armls.com/docs/data-integrity/short-sale-policy-3-25-2016-redlines.pdf

http://www.armls.com/docs/idx/idx-policy-3-29-2016-redlines.pdf

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