Tuesday, June 7, 2011

Distressed Activity by Month – May 2011

MOTS:  More Of The Same.  Lots of distressed activity.

Good News:  Bank-owned listings, short-sale listings, and vacant listings are all trending downward.  (although the trend line is at a very shallow slope.)

Good News:  Sales of all types are trending up – vacant, occupied, bank-involved, regular sellers.  Sales are outpacing listings.

Good News:  (not in these charts.)  The number of new foreclosures is trending downwards from last year’s peak.

Bad News:  There are still almost 5,000 new vacant listings hitting the market each month – that’s a far cry from normal.

Bad News:  (not in these charts.)  Although sales activity is way up, it is primarily driven by investors.  Should anything happen to change investors’ appetites, inventory levels will skyrocket.

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?

Investors are purchasing homes faster than new homes are hitting the market for sale.  This is good news in that it’s keeping a floor on pricing.  And if new bank-foreclosures are decreasing, this should cause a decrease in supply, further stopping prices from falling.

Even though there are precious few “regular transactions”, where a family is selling one home and buying another, the fact that investors have found a comfort zone with our current pricing suggests we shouldn’t see prices falling further.  (unless they do…)

Your thinking we’re past the bottom, but the normal is still a long ways off Realtor,

Chris Butterworth