Interpreting the Phoenix Market with Altos Research Charts:
I finally got around to making Altos Charts available for most of the Zip Codes in the Greater Phoenix Metropolitan Area on my blog.
John L. Wake covered the zip-code-changes in the valley in detail on his blog, Arizona Real Estate Note Book, and he even created Google Maps that outline these changes.
Of course, the recent Zip-Code Shuffle threw a little wrench into the statistical data and for some zip codes the data might be a little skewed. However, since these changes are approximately seven months old, enough historical information should be available to show current trends.
The major benefit of the Altos Charts is the forward-looking perspective.
In real estate, people most commonly draw conclusions about pricing and the current market conditions based on data exclusively derived from previously sold properties as sales comparables. Yes, recent sales statistics are important to know, but there are other equally important (if not more important) statistics to look at to spot a trend.
In this overall down market, the sample size of comparable sales is very often too small to identify a market trend in smaller geographical area…Needless to say, we all know what the overall trend right now is. On the other hand, looking a little bit closer at these charts may help identify areas where the market is holding up a little better.
The following indicators are positive signs:
- The Average Days on Market Graph remains fairly flat or is trending down with prices remaining steady. With a lot of sellers still being in denial, we continue to see a lot of overpriced properties on the market and that makes it a little bit more difficult to gauge the true marketing times. One way around that is to compare the median-days on market versus mean-days on market. If the median-days on market starts to drop before the mean-days on market then this is an indicator of reasonably priced properties still moving where overpriced properties continue to linger on the market. Here is why: mean means average and takes all properties equally into account (example: the mean or average of 10, 10, 20, 70 and 90 is 40) where median is “half way†(example: the median of 10, 10, 20, 70 and 90 is 20) and marketing times of overpriced properties way-in less. Theoretically, the graphs of mean-days on market and median-days on market should be the same assuming that there are no overpriced properties in the market.
- Once marketing times remain steady or are trending down the next thing to look for is the Market Action Index trending upwards.
Now, you will be able to view 4 different charts for almost every zip code of the Phoenix Metro Area broken down into:
- Average List Price
- Average Price Per Square Foot
- Total Number of Properties Listed For Sale
- Market Action Index
These charts show 2 graphs, one for detached single family residences (in orange) and one for everything but single family residences (condos, town homes, mobile homes etc…).
Feel free to browse the list of Phoenix Zip Codes by clicking on the animated Altos Chart in the side-bar.
Any help or comments on Glendale area SFHs over a half acre? They do not have to be horse properties, but I was wondering what you think that segment of the market is doing, and where the best deals are?
Hello Ed,
Thanks for your comment! Your question is pretty broad (Glendale is a large geographic area) and of course it ultimately depends on location and on your needs and wants. Currently there are old ca. 1950’s ranch homes with large lots listed in the lower $200K range. The price point for newer homes with large lots probably start in the mid $300K range. For current market conditions click on the chart with the rotating graphs or follow this link: http://tinyurl.com/4sqw33
If you like a detailed market report, please email me the zip code you are interested in.
If I can ask a question…..
I live in the peoria area 85382 and have one house up for a short sale at $199 and smaller, which I think short sale means boaderline foreclosure, 2 which are priced to just get rid of next door. Our home is really decorated nice and we’ve always kept it in tip top condition, lots of amenities. Our home is selling for $228, the others are $145 & $150. How do I compete with out dropping my price to a give away.
Plain and simple…you can’t… unless the short sales are in REALLY bad shape, or you have pool and/or outdoor kitchen and they don’t, etc. But the difference between $145-$150 and $228 is too steep for right-next-door. Nicely decorated doesn’t mean a thing unless you are selling it furnished. The bottom line is still the price/sq ft, especially now when people want a deal and know they can get it. If you can rent for a while, I suggest you do that if you don’t want to sell at a “give-away” price, because that, my friend, is what it’s going to take if you really want to sell now. The other option would be owner financing if you can swing that, that would definitely help with the tight credit these days. Good luck, times are tough, I do hope it works out for you.