Posts by: ARMLS

Hey! Remember The ’90s? Part 2

In part 1, we looked at a few old pages from a market report from 1991. So, how much has the market changed from then to now? Comparing sales volume is easy, in 1991 there were a total of $2.3 billion in sales, in our last full year on record (2013) that number was 11.4 billion. The number of builds since then and inflation skews the relevance of this number.

In the report from 1991, the average sales price for a 2-bedroom single-family detached home was $69,290, today it is $196,578. For a 3-bedroom single-family detached home in 1991 the average price was $90,820 and today that average price is $217,540.

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Q: What has 8,000 Square feet, numerous wagging tails & purrs?

A: The new Lost Our Home Pet Foundation shelter! Lost Our Home is an agent-run organization and their new shelter grand opening celebration is on April, 5 from 12:00 to 4:00 p.m. Come out and enjoy:

Getting ready for the grand opening

Getting ready for the grand opening

• Free giveaways by Valley Honda Dealerships
• Ribbon cutting at 1:30 p.m.
• Enjoy tasty treats from The Roasted Shallot food truck
• Tour the new facility
• Face painting
• Discounted pet supplies on sale
• $50 off Dog adoption fees and $20 off cat adoption fees
• and more…

If you’ve ever had interest in volunteering, this event is a great opportunity to get started. For more information on volunteering visit: this page.

Location: 2323 S. Hardy Drive, Tempe, AZ. 85282
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“Study Suggests MLS Played Little or No Role in Nearly Half of 2013 Home Sales”

Really? This recent headline from INMAN has us scratching our heads. We have a simple way to test the headline in our market, let’s compare non-MLS sales to MLS sales. We have the MLS data for our coverage area and public/tax records from The Information Market, a local public tax records company. Our numbers are nowhere near 50%. The number of non-MLS sales in 2013 for Maricopa county was 23%. Wow, that’s a lot! Not so fast, let us explain.

Dr-evil-dataNew Construction & More
35% of non-MLS sales were new construction and were not part of the resale real estate market. Excluding new construction from the study, 16% of sales in 2013 were non-MLS sales. What’s in that remaining 16% dataset? Flips, GSE purchases, FSBOs, pocket listings, bank sales, and normal non-MLS sales.

What’s the trend?
Are non-MLS sales increasing or decreasing (we kept New Construction in for this calculation)?

2012 – 21% non-MLS sales
2013 – 23% non-MLS sales
2014* – 23% non-MLS sales

* partial year to date.

Intro to iBeacons

Have you heard the term iBeacon? They are about to become a big deal. iBeacons are made by many companies, including Estimote which explains the technology well in this video:

Imagine the possible real estate uses! Instead of scanning a QR code on a sign, an iBeacon could deliver property details to the user’s phone without a special app. Your smartphone most likely has the technology to communicate with these smart beacons built-in. iBeacons are low power and don’t drain resources like GPS. iBeacons add context to location services! It’s an exciting new technology, you heard it here first.

Syndication Options in flexmls

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Syndication

There has been much talk recently regarding the syndication options ARMLS provides within flexmls. While some new options have been added in the past few months, the practice of how listings are distributed via these settings has not changed.

Whether or not ARMLS provides listings to these syndication destinations (publishers like AZcentral, Realtor.com, Homes.com, and Trulia) is always the broker’s decision. If a broker has not opted in to a particular publisher, ARMLS does not make their listing data available to that publisher.

When ARMLS enters into an agreement for a publisher to be added to the syndication options in flexmls, we are simply facilitating the transfer of listing data as directed by each broker.

As with any business decision, brokers must weigh the pros and cons of sending their listings to each destination. If the benefits of sending their listings to a publisher outweigh concerns they have, they will send the listings. If their concerns are too great, we would suggest the broker voice those concerns to the publisher, and if not satisfied with the outcome cease to send their listings there.

Little Doubt – We’re in a Buyer’s Market

Each month Tom Ruff of The Information Market writes commentary for our STAT report. His commentary this month is particularly important. See the accompanying graphs here.

m5r5mwx“The volume of home sales in February has always been higher than in January for as long as we can go back. Sales in March have always been higher than in February and this year will be no exception. In MLS, 5,474 total homes were sold in February, 14.1% higher than 4,797 in January 2014. As the monthly sales volume comparison is clearly seasonal, one must look at the year-over-year comparisons to get a clear view of sales activity. The February 2014 sales total was 17.4% lower than the total in February 2013 of 6,630. The last time we saw a lower sales volume in February was 2008 where only 3,448 sales were reported. Last year at this time total inventory numbers were dropping, this year they continue to climb, up 4.2% to 29,661.

With low demand and rising inventory, there are few doubters left – we are in a buyer’s market. Our transition from a balanced market to a buyer’s market is further evidenced by a record number of price reductions among active listings. Pending sales contracts are increasing as expected, but this is a seasonal normality. Pending sales contracts are 36% lower than last year at this time at 6,654. Looking ahead to the March sales volume, it would not be unreasonable to expect that 1,400 fewer homes will be sold this year than last.

The ARMLS Pending Price Index successfully predicted a median sales price of at $180,000 for February, down 1.4% from the median in January of $182,500. For March, the PPI is projecting a slight uptick to $184,000. The median priced home value has been wobbling between $180,000 and $185,000 since June of 2013. The projected increase in value for March should not be viewed as an indication of price appreciation, but is most likely attributed to seasonal factors. The imbalance we are seeing between supply and demand will exert downward pressure on pricing which will likely appear later this year.

Defining Normal
This month I’m going to attempt to compare our current market to what is considered a normal market. This is something which I consider to be impossible. For the purposes of this discussion I need to choose the last normal year in our market, which I’m going to pick as 2003. Defining normal is clearly unscientific. 2003 was after the .com bubble burst, after 9/11, and prior to the housing bubble forming. Also, in 2003 Norah Jones won the Grammy for Don’t Know Why and when you don’t know why you’re choosing 2003 and calling it normal, I’m figuring a Grammy award is as good a reason as any.

Sales Volume
Sales volume this year is a mirror image of 2003, with sales volumes for the two year’s being nearly identical. In January 2003 there were 4,760 homes sold on the MLS, in 2014 we saw 4,797 sales. In February 2003, there were 5,493 homes sold compared to 5,474 in 2014. For the first two months combined, 2003 reported 10,253 sales compared to 10,271 in 2014. However, identical sales volume between the two years does not translate into our current sales volume as being normal. , There were 1,010,912 homes in Maricopa County in 2003, today this number has risen to 1,264,844 (we define homes as single-family residences, condos and mobile homes). There are now 25% more homes in Maricopa County then in 2003. I would contend that demand this year is 25% below what should be considered normal as a more normal sales volume number in February would be 6,802. Giving credence to this assertion, the average number of sales for February for the four prior years was 6,907. Our current sales volume is well below normal.

Normal/Prices
There is a common theory that long-term appreciation rates have to be pretty close to the general rate of inflation. In the table below, having defined 2003 as normal and there by our base year, we will apply the US government published inflation rates.

Based on this theory, our median priced home is pretty close to normal. The average inflation rate for the years listed above is 2.38%.

New Construction
A low percentage of new builds are listed on the MLS. As mentioned above, this sales volume this year was nearly identical in 2014 and 2003. Looking at public records data, new construction paints an entirely different picture. In February of this year 582 new homes were sold in Maricopa County, compared to 2,322 in 2003. New construction is off to a very slow start this year. The reason given nationally for these declines has been bad weather, an explanation unacceptable in our market. Most forecasters called for an increase in new builds this year, I would not be surprised to see these expectations revised downward in the coming months. In the first two months of 2014 our records indicate 1,142 new builds sold in Maricopa County, last year 1,522 were sold which is 25% lower.

Foreclosures
In February of 2003 there were 1,243 residential notices of trustee sales recorded in Maricopa County, this year 846 new residential notices were recorded. In terms of existing homes, 0.123% of homes received a notice in February of 2003, compared to only 0.067% this February.

As recent as three years ago our market was the poster child for foreclosures, today the number of properties entering foreclosure is well below normal. This month shows the total foreclosure inventory down 48.8% year-over-year and 5.3% lower than last month. I fully expect the number of foreclosures to continue to decline throughout 2014.

vfr4h7lThe current 29,661 home listings are very close to what we would define as typical. Our current imbalance rests solely on the demand side of the equation. The pricing chart above would suggest our home prices are close to normal, but the right side of the chart would suggest our buying behavior is anything but normal. Three years of strong appreciation and a combined 250,000 foreclosures and short sales have restored our current level of distressed housing to a healthy level. The lack of new construction is disheartening from a jobs perspective, but in turn, we are not adding to our existing supply. As I’ve stated in earlier commentary, I see 2014 as a transitional year, with my short term pessimism offset by longer term optimism. At present the question we should be asking ourselves is – where are the buyers? Next month, I’ll attempt to answer this question.”

flexmls Scores High in MLS Survey

Last week Clareity Consulting held their annual MLS Executive Workshop. Prior to the meeting MLSs across the country were surveyed on their system vendors with the results revealed during the workshop. FBS, the creators of our flexmls system, excelled in a number of areas as reported in the survey.

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Overall, MLSs who chose flexmls were very happy. Clareity summarized how flexmls rated:

FBS – flexmls led the pack two years ago among vendors with more than 10 customers but remains at #2 this year in that segment for both subscriber and staff satisfaction. They are rated as excellent for system speed and uptime, and for vendor responsiveness and support. In terms of the system, customers would like to see better mobile options. One customer indicated that “the interface of flex could use a considerable update … true multitasking would be a huge benefit.”

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