March 2015 Sales Volume Up 17.7%

tom-ruff-72-2x3March 2015 sales volume increased 17.7% year-over-year according to our latest STAT report. Each month Tom Ruff of The Information Market gives us his insights on the housing market. Accompanying graphs can be found here. Here are Tom’s latest comments:

“Freddie Mac introduced a new publicly-accessible tool last year called the Multi-Indicator Market Index, also known as MiMi. This tool monitors the stability of the nation’s housing market using four individual metrics: home purchase applications, affordable housing analysis, mortgage delinquency / payment rates, and employment strength for each market. They said of Phoenix:

‘The Phoenix housing market is defined as weak and declining.’

MiMi is interesting but like other national reports, the information reported is not as timely as our locally reported data, for example their most recent report uses data from January. They’re not wrong they’re just slow. Our STAT report showed weak sales volume in January, but as the first quarter progressed our market demonstrated the axiom, demand can quickly change.

Sales volume for the first quarter of 2015 was 10.5% higher than last year. There were 18,674 homes sold in Q1 2015 compared to 16,983 last year. It should be noted that the sales volume last year set a very low standard and was often times described as anemic. The gains in sales volume for the first quarter took place in February and March after a modest decline in January.

Sales figures in February 2015 were up 9.4% year-over-year and sales volume in March 2015 was up 17.7% year-over-year. Last year at this time we had theorized demand was 20% to 25% below normal. The increase in volume this past month makes the argument that sales volumes are approaching their customary levels.

When we take a closer look inside the March 2015 numbers we see investor activity fell to 12.1% of sales compared to 16.25% a year ago. Pair that with foreclosure inventories in Maricopa County (REO & Active Notices) being down 24.2% year-over-year, it’s now undeniable: the traditional home buyer is the driving force in our housing market.

Declining foreclosure and investor activity have been prevalent for some time. What we’ve really been waiting for are improvements in traditional financing and new construction:

Traditional Financing
There were 1,249 more recorded home sales in March 2015 compared to March 2014, according to the Affidavits of Value in Maricopa County. The most interesting metric from the Affidavits of Value appears in the method of financing box, where there were 1,134 more homes this March that obtained loans compared to last March.

New Construction
New construction gained 8% higher year-over-year in March. New construction numbers are still paltry but are improving. As an indicator of what might be expected in the coming months on the new construction front, the RL Brown Housing Reports home page stated: ‘New Home permits for March are up more than 50% from the same month last year and up +40% from last month.’

Where is this new demand coming from? My anecdotal evidence says boomerang buyers are finally starting to emerge based on two close friends who are re-entering the market. One purchased a resale home using FHA financing and the other purchased a newly constructed home using conventional financing. Considering the number of friends I have, it’s actually a large sampling. I believe the increase we’re seeing in home purchases and purchase money financing is a result of improving credit scores and not a lessening of credit requirements as Michael Orr of the Cromford Report succinctly pointed out in his daily observation on March 18. ‘The Ellie Mae Origination Insight Report for February contains very little sign of lenders easing their underwriting standards.’

STAT-FICO-scores

If my suspicions are correct and boomerang buyers are returning, it is most likely due to improving credit scores and not a lessening of qualifying standards. It should be further noted this new wave of buyers are just now crossing the starting line.

With demand approaching normal levels, supply is still well below normal. Total supply is 11.5% lower than last year at this time. If we look at active listings and exclude those in UCB, we see inventory has fallen 15.5% year-over-year. This is encouraging news for sellers because if the current pattern of increased demand continues, upward pricing pressure can be expected.

Pending Price Index (PPI)
Our last Pending Price Index projected a March median price of $199,000 with the actual median coming in at $200,000. Looking ahead to April, the ARMLS Pending Price Index projects a median sales price of $200,000. One of the weaknesses in reporting the median sales price is prices tend to stick around common price points, where pricing near 200,000 is attracted to the clean look of $200,000 instead of $198,127. It’s simply prettier and easier to say out loud.

We began April 2015 with 11,997 residential listings under contract compared to 10,817 for the same period last year. April 2015 sales volume will undoubtedly exceed April 2014 (7,659). We expect sales this month to land in the 8,500 range. Our estimated sales volume last month of 7,500 was 5.3% below the actual sales figure of 7,900.”

Changes to Documents in Flexmls

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Due to the changing landscape of listing documents (the HOA addendum for example), new documents in Flexmls are now Private by default when uploaded for ARMLS Subscribers. While Subscribers always had the ability to toggle this setting, we believe making this change offers a better user experience for our Subscribers.

Additionally, a document description selector was added to aid Subscribers in choosing the correct document visibility setting. Subscribers still have the ability to change the visibility setting and description as needed. This change does not affect previously uploaded documents.

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Before posting a document as Public, check out the ARMLS Rules & Regulations and Inappropriate Language Policy to check what can be displayed publicly.

Penalty Policy Myths

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Earlier last month we published a new Penalty Policy. Some myths about the new policy have been circulating and we would like to address them.

Myth: You only get one entry mistake in your lifetime
Not true as most unintentional data entry errors are not violations or are non-penalty violations / self-reported violations where no fine is issued. The first time an error is made that results in a penalty-violation, no fine will be attached. After that, fines will be issued but only for penalty violations.

Myth: All violations have a fine
Nope, more than half of violations issued are non-penalty violations, which would not include a fine.

Myth: All fines are the same amount, $500
No! Penalty violations range from $50 – $500 and are based on severity as outlined in the policy. However, the rare Access Credentials 7.2 violation, ranges from $500 to $15,000 as it has in the previous policy.

Myth: ARMLS is trying to make money
No, actually the opposite is true. The goal of the policy is to reduce errors thus collecting less money in the long run.

Myth: ARMLS hasn’t tried a mandatory class or giving warnings
Actually, we have tried both. The last penalty policy was a level system. The first two violations in a six month period were warnings and no fine. The third violation in six months gave a $50 penalty or the option to take a rules class for most violations. The 4th violation in a sixth month period gave a mandatory class and a $100 fine for most violations. That system did not lower data errors to an acceptable level.

Myth: There isn’t a problem with the data, so this change doesn’t need to take place
We wish that were true, but data errors continue to effect the business of others. For example, a wrong sales price can throw a CMA off by thousands of dollars. For other examples see the bottom half of this post.

We urge all Subscriber to read the policy for themselves, if can be found here: http://www.armls.com/docs/data-integrity/armls-penalty-policy.pdf

Note: The policy is effective now but most fines are not yet being issued. See more on that here. The penalty policy for lockbox violations remains the same as the previous policy.

3/30/2015 – Zillow Now a Syndication Option in Flexmls

Early last week (3/30/2015) we sent an email blast to all ARMLS Subscribers announcing an agreement to facilitate syndication to Zillow through Flexmls. It’s an opt-in agreement, where no listings are sent unless the broker opts-in. As a courtesy, that message has been posted here for reference:

Zillow Now a Syndication Option in Flexmls
Starting today, brokers now have Zillow as a choice for syndication through Flexmls. ARMLS has signed a facilitator agreement to enable this option in Flexmls.

Listings are only sent to Zillow if your broker has opted-in. Brokers who have opted-in may enable their agents to opt-out on a per listing basis.

Points to Remember:
points

More reading: The Top 3 Syndication Myths

Introducing KEYshirt

(Yes, this was an April Fool’s joke) We’ve recently announced the next generation of lockboxes which will hit the ARMLS market in Q4 2015. Today we are pleased to announce the next generation of lockbox key. KEYshirt connects to your smartphone using iBeacon technology, eliminating the need to take your phone out of your pocket. The key container will release when you are within 3 feet of the lockbox. Price: TBD

Smart-Shirt

This is an optional upgrade for the eKey service. Currently, KEYshirt can only release the key container. KEYshirt will launch with several styles and real estate related slogans which conceal the fact that your shirt is a key:

supra-excited

bear-shirt

Rotate Photos in Flexmls

Sideways. That’s one way to describe some photos in Flexmls. There is an easy fix if a photo appears sideways on your listing, use the rotation icons in the photo editor. Follow the steps below:

1. On the Change Listing screen click Photos

2. Click the rotate icons on the desired photo until the photo is in the correct orientation:
Rotate-GIF-final

Tell on Yourself

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Yes, we’re talking to you and you’re much cooler than these stock photo people.

Data, Data, Data; it’s a core value at ARMLS®. In that spirit, there is a loophole to avoid penalties when you’ve made an error on your listing(s). Simply, tell on yourself. If you let us know about a listing data error before a violation notice is sent out, we will guide or help you correct the listing data error without assessing a penalty*. You can self-report yourself by email, phone and “Report an Error” button. Why? Because quality data is most important.

* The issuing of monetary fines has been temporarily suspended while we educate Subscribers on the new penalty policy.

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