‘The Inventory Is Going Through The Roof’ In Phoenix
The Arizona Republic looks at the numbers that came out yesterday. “Home buyers and sellers and real estate agents all can find something to like about the latest numbers from the ASU. Yet, the figures also show the conflicting forces roiling a market still struggling to regain the equilibrium it lost in last year’s selling frenzy.”
“Jay Butler believes that the higher prices are caused by more people buying move-up homes. He said that is typical in a slowing housing market. ‘Everybody is sort of in transition,’ he said. ‘Some people say this is just a hiccup. Some are arguing a disaster scenario. But I don’t think we are going to have a disaster scenario. If we do, it won’t come from the housing industry itself. It will come from outside the industry.’”
“Many people close to the housing market say it has begun to slow from what some analysts said was an unsustainable pace. A big reason, according to real estate agents: Investors are taking their profits and moving to other cities. Listings are up, as is the time it takes to sell a house as buyers no longer are forced to jump at the first deal they see or get into bidding wars.”
“‘We’re getting a few more buyers coming out and looking around, but the inventory is going through the roof,’ said (broker) Floyd Scott. ‘Investors are rotating out, going to Dallas and Austin. They bought the resale market last year, took the inventory right out of the market and everyone raised prices. We’re still trying to find our legs on whether these prices will hold up or there will be a small decline this year. It might soften a little bit because of the price increase last year.’”
“Julie Bieganski, a real estate agent and investor, said, ‘Things are still selling but the price has to be right. You can’t overprice now. There are too many houses.’”
“Ahwatukee Foothills had its second decline in recent months, with prices falling $43,800, or 11 percent, since December’s $386,250. Butler cautioned that it is too early in the year to say if these numbers reflect trends or if they will continue.”
“Ahwatukee Foothills and Tempe are such small markets, with about 120 sales in each last month, their numbers may not reflect what is really going on, he said. ‘Tempe only had 120 sales. I suspect a lot of that is higher-end housing areas like Oasis,’ Butler said.”
“‘Both Tempe and Mesa are popular because they are well located and have reasonably priced housing,’ he said. A separate report from the MLS shows that the number of home sales rising to 2,360 from 2,061 in January. That is lower than the 3,019 sales in February 2005, when the housing market was hot.”
“But the number of single-family homes on the market jumped about another 1,000 in the month to 12,578.”
“The new-home market is feeling the effects of longer selling times and pickier buyers on the resale side. Some builders say that some of their inventory of speculative homes comes from contracts canceled by buyers who couldn’t sell their resale home. That has led builders to offer incentives to unload these properties, creating short-term buying opportunity for bargain hunters.”
“But Butler also said that he thinks builders are starting construction on houses that don’t have sales contracts just to keep the action moving in subdivisions.”
“Larry Seay, CFO of Scottsdale-based Meritage Homes, said buyers have gotten accustomed to a red-hot resale market. They think they can wait until the last minute to sell their current home, expecting the rush of buyers typical in last year’s market. Then the house doesn’t sell before the time to close on the new house. That can be costly in terms of lost earnest money.”
“‘We’re definitely counseling people that as soon as they sign a sales contract with us, sell their current home so they don’t get squeezed,’ Seay said.”
Builders building, speculators unloading, buyers balking, I am wondering what it will be like in 6 months.
For Tempe and Mesa. ‘A separate report from the MLS shows that the number of home sales rising to 2,360 from 2,061 in January…the number of single-family homes on the market jumped about another 1,000 in the month to 12,578.’
Doesn’t this imply that roughly 3,000 were added in February? Note: This is either separate from the PHX mls or just a part of it.
if you take the entire PHX metro area –Ziprealty– excluding land—you’ll end up with around 35,000 listings today. OUCH. PS– those are almost all resale, doesn’t include the gazillions in new construction.
A big reason, according to real estate agents: Investors are taking their profits and moving to other cities.
With inventory up 90%, it’s probably more accurate to say that investors are stuck in Phoenix with properties they can’t unload. The only thing they left was the buying pool, as they scrambled over to the selling pool.
Typo: I meant inventory up 900%
4:33pm 03/22/06 KB Home still sees FY06 EPS $11.25 - MarketWatch.com
4:34pm 03/22/06 KB Home FY06 First Call earns est $11.26 - MarketWatch.com
4:32pm 03/22/06 KB Home Q1 First Call rev est $2.17B - MarketWatch.com
4:31pm 03/22/06 KB Home Q1 rev $2.19B vs $1.64B - MarketWatch.com
4:32pm 03/22/06 KB Home Q1 First Call earns est $1.96 - MarketWatch.com
KB Home: Backlog up 25% on yr-over-yr basis - MarketWatch.com
as Frank would say…”holy crap!”
Glad I didn’t short going into the report. I was tempted but figured it might be too early. A 12% decline in bookings and some mention about softness & cancellations, mostly blamed on speculators.
Still, “Backlog value rose to approximately $7.24 billion, up 25% from $5.80 billion a year ago with all regions generating year-over-year growth”, doesn’t sound like they’ll be filing BK any time soon.
That’s provided the backlog doesn’t BACK OUT & CANCEL!
Check out the net order details. Sure, FRANCE showed a decent pop YOY (10.3%). But the west coast region of the U.S. was ugly (-24.7%) and the Southwest region was a bloodbath (-30.3%). Central also down (-9.7%). Only the Southeast was up marginally (less than 1%). So it’s pretty hard to put lipstick on this pig. Some happy talk about “oh, don’t worry, we just have a few minor inventory issues to work through quickly, then we’ll be fine.” Guess that’s the 600% increase (or whatever it was in that newspaper story) in Phoenix homes for sale … or the 230%+ increase in homes for sale in my market in South FL in less than a year … or the highest number of new homes for sale in U.S. history we have right now. One of those “minor” glitches.
Up $1 in AH despite a 12% decline in orders.
Even though backlog volume is lower in the West Coast figures, $ backlog is higher. Perhaps that’s largely what’s driving the backlog value gains - More expensive homes. Makes it a lot more painful when a deal gets canceled.
Short it in June?
Put away the lipstick and get out the K-Y.
At least they have Martha Stewart. If you can stomach the metallic colors, the house designs are at least *different*. This from burbs of Northern VA where everything is vinyl with a “dramatic 2-story foyer”.
Is KB building away in PHX? I posted an article about their plans to build “affordable” NOLA housing (> $100K)…
Is this a newsflash?
“disaster scenario?”
hey i didn’t bring this up. did you guys bring this up? who said anything about a disaster scenario? i thought we were simply talking about a “soft landing”.
(hey phuck, you wanna run that list again?)
Phoenix
7/20/2005 10748
7/21/2005 10968
7/22/2005 11122
7/23/2005 11424
7/24/2005 11338
7/25/2005 11112
7/26/2005 11315
7/27/2005 11353
7/28/2005 11390
7/29/2005 11471
7/30/2005 11656
7/31/2005 11609
8/1/2005 11599
8/2/2005 11590
8/3/2005 11635
8/4/2005 11714
8/5/2005 11710
8/6/2005 12196
8/7/2005 12658
8/8/2005 12919
8/9/2005 13244
8/10/2005 13099
8/11/2005 13245
8/12/2005 13389
8/13/2005 13846
8/14/2005 13801
8/15/2005 13607
8/16/2005 13779
8/17/2005 13992
8/18/2005 14087
8/19/2005 14279
8/20/2005 14321
8/21/2005 14457
8/22/2005 14336
8/23/2005 14391
8/24/2005 14529
8/25/2005 14617
8/26/2005 14792
8/27/2005 15011
8/28/2005 14984
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9/1/2005 15063
9/2/2005 15159
9/3/2005 15404
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10/31/2005 23790
11/1/2005 23601
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11/5/2005 24786
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11/25/2005 26855
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11/27/2005 26890
11/28/2005 26979
11/29/2005 26811
11/30/2005 26797
12/1/2005 26792
12/2/2005 26915
12/3/2005 27238
12/4/2005 27295
12/5/2005 27356
12/6/2005 27387
12/7/2005 27403
12/8/2005 27367
12/9/2005 27649
12/10/2005 27706
12/11/2005 27664
12/12/2005 27512
12/13/2005 27411
12/14/2005 27566
12/15/2005 27517
12/16/2005 27603
12/17/2005 27791
12/18/2005 27776
12/19/2005 27722
12/20/2005 27604
12/21/2005 27554
12/22/2005 27516
12/23/2005 27486
12/24/2005 27311
12/25/2005 27014
12/26/2005 26810
12/27/2005 26822
12/28/2005 26687
12/29/2005 26649
12/30/2005 26547
12/31/2005 26497
1/1/2006 26462
1/2/2006 26401
1/3/2006 26751
1/4/2006 27403
1/5/2006 27564
1/6/2006 28224
1/7/2006 28337
1/8/2006 28542
1/9/2006 28595
1/10/2006 28786
1/11/2006 29222
1/12/2006 29507
1/13/2006 29689
1/14/2006 29899
1/15/2006 30415
1/16/2006 30391
1/17/2006 30707
1/18/2006 30817
1/19/2006 31085
1/20/2006 31457
1/21/2006 31463
1/22/2006 31497
1/23/2006 31607
1/24/2006 31766
1/25/2006 31830
1/26/2006 32142
1/27/2006 32002
1/28/2006 32477
1/29/2006 32458
1/30/2006 32512
1/31/2006 32563
2/1/2006 32684
2/2/2006 33087
2/3/2006 33145
2/4/2006 32953
2/5/2006 33368
2/6/2006 33576
2/7/2006 33550
2/8/2006 33684
2/9/2006 33844
2/10/2006 34234
2/11/2006 34588
2/12/2006 34753
2/13/2006 34815
2/14/2006 34815
2/15/2006 34816
2/16/2006 34816
2/17/2006 35144
2/18/2006 35427
2/19/2006 36260
2/20/2006 35443
2/21/2006 35642
2/22/2006 35503
2/23/2006 35324
2/24/2006 35178
2/25/2006 36388
2/26/2006 36524
2/27/2006 36639
2/28/2006 36174
3/1/2006 36389
3/2/2006 36283
3/3/2006 36811
3/4/2006 36900
3/5/2006 37064
3/6/2006 37217
3/7/2006 36953
3/8/2006 37487
3/9/2006 37626
3/10/2006 37531
3/11/2006 38011
3/12/2006 38184
3/13/2006 38169
3/14/2006 38003
3/15/2006 38197
3/16/2006 38574
3/17/2006 38602
3/18/2006 39074
3/19/2006 38972
3/20/2006 38822
3/21/2006 39159
3/22/2006 38982
Thanks for the numbers flip.
I predict the deflation to last 5 to 15 years. Housing busts have taken that long to reach bottom. Reflation will follow.
I have often predicted that Hiliary and the democrats will sweep into office because I expect the start of the collapse to be before the 2008 election. They will intensify the depression with regulations and laws but then pump the fiscal pump that will intensify the reflation.
Nah, too much of a political swing. We’ll get a Hoover Republican (sorry to say this, but the fall guy may well end up being McCain, who deserves a better fate) and the long hard road to financial pain. THEN we get the saviors riding promises of ‘better days’ followed by a jobs-pumping war. Worked before, it probably will again.
‘Mister, We need a man like Herbert Hoover again.” (Oh wait, don’t we have him already?)
Moopheus, you are probably misreading the audience. Archie Bunker is so 1970s. President Rice and her VP Watts in 2009 will bring the Republican Party back to where we conservatives have always been.
If this happens, I will give up my citizenship!
Don’t count on it Robert. The GOP is gonna be blamed for this whole mess when the great unwashed are all bankrupt and giving the keys back to the lenders. A smart Dem candidate will ask, “and who was it who passed the bankruptcy law changes at the behest of their credit card company campaign contributors?” (man, that had more C’s than my report card, lol). The upper 5% has most of the money but the lower 75% have the warm (voting) bodies. The GOP gets tossed en masse in ‘08 is my prediction.
Hillary Clinton will never, ever be president, and the Dems will lose again if she’s all they can muster. Some people don’t seem to understand how widely she is hated in America. If she runs, there’ll be an ‘anybody-but-Hillary’ rally on the right, and the GOP will continue with their current mandate of incompetent cronyism.
correct. dems need someone we haven’t heard of yet unless we’re political junkies
The guy who was the ex Governor of Virginia.
Is he still the Governor? I can’t recall the name, LOL, but from what I read. The man will win if he runs. He is also a Dem.
Nope. There’s a problem. You may read about it in the news down the line.
I think the Gov. of New Mexico (Richards?) would be more palpable than witchiepooo. He is less likely to blow his top or appear mean. Clinton won because he could schmooze anyone, including interns =)
We need more schmoozing and less bad karma hate/war crap.
Blame the Supreme court for allowing the politicos to break the Constitution by going off the gold/silver standard, as the Constitution expressley state that only silver and gold shall be money. Ever since then we (joe sixpack) have been getting our asses handed to us.
Seems like it might be better if we left all of the offices vacant for a term. Anybody remember the Richard Pryor movie where None of the Above won the election? Any takers?
39,159 according to zip:
http://www.ziprealty.com/registration/register.jsp?cKey=qddfrjvd&metro=phoenix
“‘We’re definitely counseling people that as soon as they sign a sales contract with us, sell their current home so they don’t get squeezed,’ Seay said.”
Criminy! Why the hell do they even get their buyers to commit to a sales contract when they KNOW the buyer has to sell a home???
The damn salesperson just wants that contract, no matter that he is pretty sure they will lose their earnest money…and some of these builders are talking several thousands of $$$ in earnest money. This is why that “backlog” WILL get cancelled!
How do they find fools who will take this bait?
If things meltdown as badly as many say here by Novemeber 2008- We may swing hard to the left- though I think if H. Clinton wins she will take a ‘moderate course’ as FDR did in 1933-34- when that course failed, he swung far to the left- taxing the rich and corporations heavily, starting social secuirity and a plethora of Governemnt programs.
FDR was a communist POS
MLS #:2473431
Paid $190,00 under a year ago and put it on the market for $250,000. Reduced to $240,000.
Any guesses as to what the seller will end up getting? Remember he bought this home less than a year ago and is selling at what seems to be the worst time.
My guess? He’ll grab between $235,000 and $240,000
Why?
Because I think the mass amout of inventory flooding the market is not located in the older more established neigborhoods just outside of Phoenix but further away.
Or am I wrong?
Ken,
Wrong. I’ve been watching Central Phoenix for years. Signs are everywhere. Many vacancies, rolloffs in front yards, cars for sale etc. I’ve seen this before in the 80’s. I can assure you that there are many investors that will be left holding the bag.
There may be high inventory, but no real signs of distress yet. I’m watching Notice of Trustee’s Sales, bankruptcies, employment, net in-migration and also looking for increases in the suicide/crime rate. Phoenix has one of the highest crime rates of any major city in the country. I’ve been here 25 years, 15 as a broker up until 1997. I’ve never seen anything like this before.
O.k. so are you saying the seller (MLS #:2473431) will not get close to his current asking price of $240,00?
If so, what would you expect the property in question to sell given what you’ve sugggested?
No, I’m saying there are boatloads of properties in central phoenix and northeast phoenix as well as the outlying areas.
fred hooper– remember the last major time Phoenix tanked? The memory (and eyesight, etc) fail me, but maybe 88? Any idea what % hit things took then?
My memory vividly recalls the Tax Reform Act of 1986, when billions and billions of equity disappeard overnight. It took 8 years to recover. Things finally picked up in 1994.
You’ve been reading this blog and you’re still not sure what to do?
Just buy the damn thing Ken!
bet they’re talking small deposits- what contingent buyer would make a heavy commitment ! ?
flat…
I know a cerebrally challenged person in Phx who “wanted” a new home in a “new” development who gave up $15,000 earnest when her “old” house didn’t sell in time. The sales agent at the “new” development pretty much told her “tough luck”.
Insane! I’ll never understand some people!
My GE appliance repair guy just lost a 15,000 deposit on an Elite home in Queen Creek because he couldn’t sell his home in Chandler after listing it last August.
At least he was smart enough to make shit out of shinola. He figured if he had to discount his old home more than 15,000 grand to sell it, he might as well let his deposit go.
He was bummed but he got my washer working again. GE guys are great!
The big news today was that pension funds were trying to get more return by buying into hedge funds. This would scare me if my retirement pension were involved but it’s not. The net-net is that you have more money chasing fewer and fewer opportunities and everyone has the mind set that any profit should be in double digit numbers. The stock market is peaking and more people in the market are buying the speculative ‘C’ stocks….another signs of a new bubble growing. Way too much money floating about the world economy for my comfort zone.
^^^what is ‘gold’, alex?
correct for $1000, we would have also accepted ’silver’
That should scare you. Anyone remember LTCM?
Yep. They almost brankrupted the world and were bailed out by the Fed and every big Wall St. firm except Bear Stearns. If I am not mistaken, they got smoked when the Russian Ruble collapsed. Isn’t Merriweather running another hedge fund?
Inventory going through the roof in CHICAGO area. Adding 1000 homes every day
look at
http://chicagobubble.blogspot.com
wow, look at chicago creeping up. is that the ziprealty number?
Reminds me of a song……..”Chicago—-Chicago——that bubbling town”
When Chicago’s bubble pops, it will give new meaning to the nick-name “The Windy City”
There’s a plot of the Phoenix housing inventory since last summer in the Wikipedia article on the US housing bubble. This plot should probably be updated (from just earlier this month) when the numbers hit 40 or 45K.
Chicago and surrounding area on zip:
http://www.ziprealty.com/registration/register.jsp?cKey=twc3gcvq&districtId=3&metro=chicago
Another misleading headline, copied by AzRep from ASU.\
From the ASU Report: “Greater Phoenix Resale Home Market Experiences Up Tick in February”
Citing the ASU Report, from the Arizona Republic: “Home Resale Market Perks Up”
It should read: “Resales DOWN 30%. Inventory UP 350%”.
This irks me. They cite year over year increases in the median price, but headline an increase of 200 sales in January-February. Everyone has bias I suppose. “Perks Up” or “Up Tick”. How about “Nose Dive”
If only 5 out of 100 homes on the market sell, for an average of $260k, how does that really reflect the market? What about the unsold homes?
I think Broker Floyd might be on crack! His prediction of a “small decline” and market assessment that “might soften a little bit” is classic NAR.
How does the Phoenix market with approaching 40,000+ homes for sale do anything but crash into the hot sand?
I wish I could have a dollar for every house on the market in Phoenix
The AZ print media is bought and sold by the big developers so they’ll always try to spin this impending PHX disaster into something positive. I don’t know how a crappy 3/2 that sold a year ago for $130K, now going for $275K is a “good thing.”
Fulton Homes CEO has pledged millions to ASU’s school of Engineering and its construction management program. Do you think he will make good on the endowment?
Also I read on another thread here that many speculators will go to Texas but I just saw and interesting ABC report that says things are going bad there for buyers at
http://abcnews.go.com/Video/playerIndex?id=1752600