The ARMLS December Home Sales Report was released recently and it had some thought provoking numbers associated with it.

For one, sales numbered 7073 for just the single family detached (SFD) market. These are strong numbers. The median sales price for SFD was $120,000. Um, not great, still dropping. Time on the market dropped a little, and fully 1/3 of listings sell within 30 days. Well over half sell within 60 days.

But the one December sales stat which jumped out at me was how these 7073 sales were financed. With current mortgage interest rates bumping along at historically low numbers — under 5% for 30 year fixed rates, one would think government or conventional loans would win the day. But they don’t. Instead, CASH sales accounted for 42% of the market. Let me repeat, cash accounted for 42% of our sales market.

I believe it’s safe to say that this investor driven market is keeping us on life support, not the historically low rates.

Next in line wasn’t even FHA financing that can be had for as little as 3.5% down, but conventional (i.e., usually with 20% cash down payments or more) which took 27% of the market. FHA followed in 3rd place with 24% of the market. VA with 4%. And everything else accounted for 3%.

Ok, so what does this tell us? My dear Watson, it tells us that investors are dominating the market. Totally. I believe it’s safe to say that this investor driven market is keeping us on life support, not the historically low rates.

   According to the Arizona Regional Multiple Listing Service Producer Price Index (ARMLS PPI) released today, home sale prices may continue downward in the very near future.  Read full report:

http://www.armls.com/Libraries/STAT/STAT_December_2010.sflb.ashx   

   According to ARMLS, the PPI is a predictive tool unique to our MLS, based on “Pending sales” that have not yet closed escrow.  “The predicted median price  for December should remain steady at $115,000, rise in January 2011 to $118,000 and fall dramatically to $100,000 in February.  The February’s prediction is least reliable at this point because it is based on lower number of closings scheduled ninety days into the future,” states the report.

   Personally, I’m not putting a lot of faith into the index for at least one month and probably longer. I’d like to see what December sales will bring about as those sales will most likely close in February unless they’re short sales. During December and January we’ll also see the valley swell with new winter visitors, many of whom we think will have brought their checkbooks from the chilly midwest.

   Well, you can read the report for yourselves, but I give you this caveat, the market is actually showing a number of positive signs. All real estate is local, so don’t interpret broad statistics to what’s actually happening in your community.  A number of  communities are doing pretty well, and we trust are leading the pack back.

   Questions? Call Mike Bodeen, Associate Broker at 602-689-3100.

Mike is a Licensed Broker and a:

CRS – Certified Residential Specialist;  ABR – Accredited Buyer Representative; CDPE – Certified Distressed Property Expert; SFR – Short Sale Foreclosure Resource; SRES – Senior Real Estate Specialist

Many homeowners are choosing to remodel their existing home to add value to the property. I offer advice to make the most of your remodeling dollars.

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If you value the quality and depth of information provided here for this property, please consider marketing your own home with us when it is time to sell!

We have found that our marketing efforts pay big dividends for our clients in terms of getting buyers to look at their home in person – the key step toward a purchase.

Contact Us to discuss how we may help you today.

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Giving back to the community and serving others is one of the joys of being successful in real estate. Mike is a volunteer with Hospice of Arizona and leads a Grief Support Group at Desert View Bible Church. Mike is an ordained Chaplain as well and enjoy sharing the success I have had with others.