Phoenix Real Estate in September: Sales down 1%, Cash Sales down Sharply, Inventory up 13%

This is a key distressed market to follow since Phoenix saw a large bubble / bust followed by strong investor buying.

The Arizona Regional Multiple Listing Service (ARMLS) reports (table below):

1) Overall sales in September were down 1.0% year-over-year and at the lowest for September since 2008.  Note: This is the smallest year-over-year sales decline this year.

2) Cash Sales (frequently investors) were down about 25% to 25.7% of total sales. Non-cash sales were up 10.3% year-over-year.  So the slight year-over-year decline in sales is probably due to less investor buying.

3) Active inventory is now up 13.2% year-over-year – and at the highest level for September since 2011 (when prices bottomed in Phoenix).  Note: This is the smallest year-over-year inventory increase this year, so the inventory build may be slowing.

Inventory has clearly bottomed in Phoenix (A major theme for housing in 2013).   And more inventory (a theme this year) – and less investor buying – suggested price increases would slow sharply in 2014.

According to Case-Shiller, Phoenix house prices bottomed in August 2011 (mostly flat for all of 2011), and then increased 23% in 2012, and another 15% in 2013.  Those large increases were probably due to investor buying, low inventory and some bounce back from the steep price declines in 2007 through 2010.  Now, with more inventory, price increases have flattened out in 2014.

As an example, the Phoenix Case-Shiller index through July shows prices up less than 1% in 2014, and the Zillow index shows Phoenix prices flat over the last year!

September Residential Sales and Inventory, Greater Phoenix Area, ARMLS
  Sales YoY
Change
Sales
Cash
Sales
Percent
Cash
Active
Inventory
YoY
Change
Inventory
Sept-08 6,179 1,041 16.8% 54,4271
Sept-09 7,907 28.0% 2,776 35.1% 38,340 -29.6%
Sept-10 6,762 -14.5% 2,904 42.9% 45,202 17.9%
Sept-11 7,892 16.7% 3,470 44.0% 26,950 -40.4%
Sept-12 6,478 -17.9% 2,849 44.0% 21,703 -19.5%
Sept-13 6,313 -2.5% 2,106 33.4% 23,405 7.8%
Sept-14 6,252 -1.0% 1,609 25.7% 26,492 13.2%
1 September 2008 probably includes pending listings

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