Although it will be Tuesday, January 18th by the time this entry is posted, Happy Martin Luther King, Jr. Day to you nonetheless. Dr. King was an extraordinary man, and I hope you found a way, large or small, to celebrate his life this year.
In an ongoing effort to post consistent and timely real estate market updates, just above you’ll find an REO Market Snapshot from The Cromford Report and Mike Orr. This snapshot has been re-posted with permission by The Cromford Report.
And, just to make sure we’re all on the same page, when I say REO, I mean real estate owned properties, AKA foreclosures, lender owned homes, bank owned houses, et al.
In the next graph, Mike shows us his Cromford Market Index, which has been measured monthly since January of 2001. As defined on The Cromford Report, the index is “a value that provides a short-term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer’s market, while values above 100 indicate a seller’s market. A value of 100 indicates a balanced market.”
Now, why am I showing you these two charts in the same post?
If you compare the Cromford Market Index against the REO Market Snapshot, you’ll actually see we’ve been teetering around the balanced-market-range for 20 months or so. That’s longer than the housing boom lasted! I’m not suggesting we’re out of the woods yet, because the total inventory of lender owned homes is still very high and the sales price per square foot hasn’t seemed to hit bottom yet. However, sales prices are a trailing indicator of the market, so be careful. By the time we see steady and consistent increases in prices per square foot, the bottom will already be behind us.
What I am suggesting is that the real estate market conditions right now seem ideal for buyers of REO properties in Phoenix. The market has remained balanced for nearly two years, inventory is high, and the prices per square foot haven’t been this low in a decade or longer. Oh, and have you heard mortgage rates are low?!
**If you missed my Phoenix Area Real Estate Update post earlier this month, give it a look. In the comments section below, I’d love to hear your thoughts on our lender owned market and how it compares to the overall market.**