Tuesday, January 8, 2008

A Correcting Real Estate Market is Like a Successful Diet

Anybody who's dieted will give me a hearty "Amen!" on this one. Putting on weight is a lovely, food filled bacchanalia of gluttonous indulgence in tasty treats. It happens so fast you don't notice you're packing on the pounds.


Taking the weight off is more like the Bataan death march. (No offense intended to American veterans of course). Correcting for past gluttony is a painful, lengthy process filled with anxiety, crabbiness, sacrifice and deprivation.


Real estate is about like that in metro Phoenix right now. We had our bacchanal. Now it’s time to hit the gym and trim those measurements. In the spirit of keeping track of the tale of the tape (and because I have to report something to my sellers every week other than “It still didn’t sell”) I offer my humble market stats.


If you want really serious charts and graphs, visit John Wake at the Arizona Real Estate Notebook. If you want tongue in cheek, click over to Shailesh Ghimire’s Housing Market Will Return on May 6, 2009.








































Month

Active Listings



Sold in Past 30 Days



% Sold



Months of Inventory



10/22/07



57714



3174



5.50%



18.18



11/26/07



57457



2977



5.18%



19.30



12/14/07



56751



3498



6.16%



16.22



1/6/08



53535



3368



6.29%



15.90



 Note that the "month" column is the date I pulled my stats out of the MLS. Sometimes it was about 30 days, sometimes more or less. There's a good reason for the old adage, "There are lies, damned lies and statistics," meaning you can make stats show anything you want. I didn't pull numbers on these dates for the purpose of showing a trend. It's just when I happened to have time in the day to pull stats. Other blogging Realtors might have pulled on a different day and show slightly different numbers.


Local forecasting expert Jay Butler says a normal market is 30,000 to 35,000 homes for sale and about 5,000 selling per month. That would result in a 6 month inventory and 14% to 16% of homes for sale selling each month. According to that definition we've got a long way to go. But I'm encouraged to see the numbers creeping in the right direction.


Usually the inventory of homes for sale drops over the holidays. Who wants to put their home up for sale during the holidays anyway, right? But it seems unusual to have an increase in actual sales during the holidays. 'Cause who wants to shop for a home during the holidays? Holidays are for food-filled bacchanals where you pack on the pounds.


Hopefully the incremental movement of the stats in the right direction means we've begun a trend that will result in a balanced market by the time the trends peters out. I'm still with other local Realtors and forecasters -- I think it will take most or all of 2008 to get to 'normal'.


I can almost hardly wait to see what the January month-end stats look like.