Monday, May 9, 2011

Distressed Activity by Month – April 2011

It’s another good news / bad news month, very similar to the last several months.  Good news is the distressed activity charts clearly show activity levels aren’t getting worse; bad news is the same charts show it isn’t getting much better, either.

This post will have a lot of easy to read charts, and then I’ll write up a couple thoughts at the end.  I hope you enjoy it..

(Click on any chart to see a larger version.)

Listings First – Here are the new distressed listings hitting the market each month going back to January 2009, broken out by different types and views.

Chart 1 - New Bank Owned Listings  - (new listings actually owned by the bank – think foreclosures and REOs.)

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Chart 2 - New Short Sale Listings (new listings, still owned by the ‘owner’, but needing the bank to take a short payoff because the home is worth less than the mortgage balance.  The bank will need to approve the sale.)

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Chart 3 - New Bank Owned + Short Sale Listings  (a combined look at the above charts – these are the new listings where the bank is going to take a loss on the property, and the best reflection of my former Distressed Listings chart.)

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Chart 4 - New Vacant Listings  (new listings which are vacant homes.  While not all vacant listings are distressed listings, I am including them because they represent a very large percentage of the overall market, and therefore provide some measurement of Distressed.)

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Now the Sales - I’ve pulled all the homes sold since 1/1/2009 for Single Family Residences in Maricopa County, broken out by who owns them and who lives in them.

Chart 5 - Home Sales by Type of Owner

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Chart 6 - Home Sales by Type of Occupant

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I am including Single Family Detached Homes listed for sale (or sold) in Maricopa County via the Arizona Regional Multiple Listing Service.  These numbers are believed accurate but not guaranteed.

What does it all mean?

Take a look at Chart 3 – Bank Owned + Short Sale Listings.  Going back 28 months, April was only the 6th time we have seen the combined number of listings less than 5,000.  Even better, 4 of the 6 times we’ve had less than 5,000 listings have been in the last 6 months.

This is the single most important indicator of the market changing – the market will be back to ‘normal’ when we don’t have an excess number of distressed listings.  Are we getting to a place where we’re routinely below 5,000?  Will we drop below 4,000 anytime soon?  (We haven’t been below 4,000 since I started tracking these numbers in January 2009.)

I like the fact that we’re trending near Great Recession lows, but until we cross the 4,000 and then the 3,000 barriers we can’t seriously believe things are moving closer to normal.  It could be a lot worse, though, as there are a few months with more than 6,000 distressed listings!

Your hoping next month’s number starts with a 3 Realtor,

Chris Butterworth