Real estate agents should realize it’s easier to keep statistics than become a statistic. The market is dynamic, and small shifts can become trends and niches to exploit.

 

Last week, I went on a real estate tour sponsored by a local title company. Before the meeting began one agent was ecstatic because she had received multiple offers on her last several listings that were owner occupied. She was adamant that the market was making a miraculous come-back.

 

Another agent acquiesced and stated that sales last month were up substantially in the past 30 days over a year ago. A third agent mentioned that the new stimulus bill was signed and missives from NAR were positive. The small group was about to become a real estate revival. Ding, dong, the wicked recession witch was dead.

 

It was time for ‘statistic man’ to quell their ‘irrational exuberance’. I asked what percentage of those closings were short sales or REO’s. The crowd began to hush. One outspoken agent quipped, “Why does that matter?” It was time for data, graphs and charts to replace warm, fuzzy, personal feelings.

 

The Phoenix metro area has inventories levels that are twice those in a balanced market. The recent spurt in sales was predominantly in the lower price ranges. 91% of recent sales were below 350k. Properties over one million dollars have a five year absorption rate and severe financing limitations. 75.2% of pending sales are from short sales and repos. One third of these sales are cash indicating investor bottom fishing.

 

It’s a great time to buy in Maricopa County. First time home buyers have an $8,000 tax credit, lots of inventory, FHA financing with low down payments, and pricing that allows payments less than rents. But, in my opinion the market will remain unbalanced in favor of buyers for several more years.

 

Local real estate agents should put the seller champagne celebrations on hold for another 48 months. In the mean time study the statistics and know your local numbers.