Tuesday, August 23, 2011

Distressed Activity by Month – July 2011

It looks like a downward trend is starting to appear.  It requires looking at the big picture – the last couple of years – and the descent is not nearly as steep as we’d like to see, but at least it’s heading in the right direction.  More thoughts after the charts…

(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?

I like seeing the downward trend.  (after all, isn’t a downward trend a lot better than an upward trend?!)  However, I’m far from ready to get out the champagne and call an end to the terrible market.

Yes, distressed listings are trending downwards.  But there were still well over 4,000 New Distressed Listings last month alone.  And while the sales pace has been white-hot for most of the year, the number of sales was down considerably in July (traditionally a good sales month.)  Maybe the low sales number was just a product of the low listing number, since investors can only buy what’s actually for sale.  Or maybe it’s a sign of things to come.  We’ll have to wait & see on that one.

Finally, when you add in the downward trend in pricing (Maricopa County Sales Charts), it’s difficult to argue in favor of a recovering market.

On the plus side, reported foreclosure filings have been steadily decreasing, so a month like this brings us closer to the point where the banks have fewer homes available to sell.  One month at a time, and another year will pass…

Your wishing the year(s) would pass faster Realtor,

Chris Butterworth