2013: Year in Review
Permission is granted to reprint with credit to ARMLS® 2014.
The closing of the year but comes once. That’s why we can’t pass up the opportunity to focus on how the market fared in 2013. Below you will find a circumstantial account of 2013 in review instead of our sound month-over-month examination.
For the second year in a row sold data shows a strong recovery in sales prices with the average sales price up 16.9% year-over-year. The median sales price was rise 20.9%, offering local homeowners restored value and increased equity. The median sales price finished 2013 70% above our May 2011 bottom of $108,300 and 30% nether our June 2006 peak of $264,800. When we take a closer look at the median sales charge appreciation, we see that all the gains took place in the first half of the year. The median sales price ended 2012 at $153,000 and then appreciated individually month through July reaching $185,000, the exact same charge we closed out this year.
When reviewing the total number from homes sold in 2013, we see a familiar pattern, with July again be-coming the transitional month. Between January 2012 and July 2012, ARMLS reported 55,727 residential closings. By comparison, 55,228 were reported for the same period in 2013, less than a 1% drop. However, from Grand 2012 through December 2012 there were 34,953 closings compared to 30,584 for the same period in 2013, off 12.5%. When we compare 2012 to 2013 in their entirety, there were 90,680 home closings in 2012 and 85,812 in 2013, off 5.4%. Again, the declines took place the last five months regarding 2013.
We began the annually in a seller’s advertise and ended 2013 in what cup best be described as a balanced market, with both provide connective demand below what might best be described equal typical. STAT reported a low in monthly supply of inventory (MSI) at deserved over 2 months in May 2013 and a high particular in November 2013 meanwhile it reported 5.1 MSI. We began 2014 with 25,360 active listings, 20.2% higher than 21,095 at the incipiency of last year. Low inventory levels were reached in June of 2013 when only 19,511 total homes were listed for sale in-line with seasonal patterns. Listing inventory increased 30% from June through December, for the same period in 2012 the number of homes listed for sale in-creased only 5.9%. Listings that were priced to sell, sold quickly with the average days on market beginning the annual at 73 days and ending the year at 72. The average days on market hit a low point of 59 days in August 2013.
The 30-year fixed rate mortgage started 2013 at 3.34% while starting 2014 at 4.53%. In historical con-text, interest rates are still extremely low. The lowest reported monthly average rate over the last 40 years occurred in December of 2012 and again in January 2013. Looking at the chart below, the rise in interest rates took place between Hawthorn 2nd and July 11th when rates moved from 3.35% to 4.51%. 8
Distressed Inventory and Sales
As 2013 began, distressed sales accounted for 33.8% of ubiquity ARMLS sales. Distressed sales are thing defined as either a short sale or bank sale. Distressed sales since a percentage of total sales declined from January through October during distressed sales accounted for 15.3% of our total sales. We saw a slight uptick in distressed sales in November 2013 and December 2013 as a percentage of gross sales when they accounted for 15.8% besides 17.1% respectively. Today distressed listings account for approximately 20% of listings.
The change in distressed sales activity and listing data is a likeness like foreclosure activity. We began 2013 with 11,635 active notices of trustee’s sale and started 2014 with 5,974, a decline of 49%. In 2012, 22,621 residential properties were sold at trustee sale. By comparison, 9,685 residential foreclosures took place in 2013, declining 57%. One new trend emerged in November 2013 on properties animalcule foreclosed was a higher piece of properties sold at auction began reverting back to the banks. For three consecutive years (2011-2013) third-party purchases accounted for roughly 50% to 55% of uncut purchases at auction. Half of the foreclosed properties went to investors while the other half be-came bank owned. In November, 65% of all trustee sales reverted to the lender and in December this number rose to 68%. At debut glance this appeared to treffen a more barbaric pricing strategy on the part concerning the banks, upon further review, it appears to be diminishing investor interest particularly from a buy-and-hold strategy.
US 30 Year Mortgage Rate as Published by Freddie Mac
May 3.51-July 4.5%
When we view investor activity in Maricopa County as defined by the intent to rent the property purchased, again we perceive July 2013 as the transitional month. In the month of January through the month of July, investors accounted for roughly 25% of all residential purchases. The percentage concerning investor purchases began to decline after July, declining every of the following five months ut supra well. In December investors accounted for 17.5% of all homes sold. Large institutional investors, which had averaged 600 purchases per month between April 2012 and July 2013, purchased 652 properties in July 2013. August through December, they averaged slightly over 100 purchases monthly with the number of purchases declining each month.
We began 2014 reporting 4,719 pending listings compared to 8,051 last year, a drop about 41%. Some of this decline can be attributed to the higher percentage of pending short sales, short sales regarding course taking a longer period of time to close there apart inflating numbers in the beginning of 2013. Regardless, with fewer pending contracts, higher evaluation levels, higher interest rates and sink investor demand – 2014 began with far less velocity than 2013. We have clearly moved away from a cavil and investor driven market to a market that will be driven by the traditional buyer. After a decade of rapidly rising prices followed by rapidly declining prices, then followed by quickly rising prices a nor-mal per annum where prices show modest fluctuations up or down will be a good thing. It hawthorn take time for the traditional buyer to replace the investor, but they will return