For those of us that survived July’s real estate market, we need to know how August treated us. August showed a 7% increase in number of sales (7525 vs. 7021). But what’s happening to prices…? They did continue their decline. Mike Orr wrote a couple of nice articles on prices in August. Check them out @ www.cromfordreport.com.
Let me give you the numbers and then some thoughts on where they are going. The month to month Average Sales Price (ASP) is down 6% to $164,900; Median Sales Price (MSP) is down 4% to $120,000; and Price per Square Foot ($/SF) is down 6% to $85. These are significant drops for a 1 month period. Distress properties (REO’s and Short Sales “SS”) make up 69% of the sale numbers, with SS making up 32%. But the majority of the price decrease is attributable to Normal Sales, i.e. not Distress. Here are the comparisons from The Cromford Report.
| Greater Phoenix / All Dwelling Types | $/SF July 29 | $/SF August 29 | Change |
|---|---|---|---|
| REOs | $67.11 | $68.07 | +1.4% |
| Short Sales & Pre-foreclosures | $84.35 | $81.86 | -3.0% |
| Normal | $119.77 | $108.19 | -9.7% |
| Overall | $90.20 | $85.43 | -6.3% |
So why did this happen? According to Mike, “the overall price decline is primarily caused by two main factors: a steep fall in the sales prices of Normal listings over $300,000 and the relative scarcity of Normal sales in August, particularly higher end homes. We saw only 91 Normal sales priced over $600,000 compared with 142 sales the month before.”
So don’t expect to hear many ‘rosy news stories’ this month. Also remember that we will start to hear about the market’s dismal performance in July. Here we go with the Consumer confidence factor again.
The foreclosure numbers should be out in a few days and I’ll update you on the market when I receive them.
Have a great month!
Jim Sexton
