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2^nd Issue of January 2007

Resale Sales Analysis

November ARMLS Reports reported sales of 5,320, which is a decrease of 249 from October.  On a seasonally adjusted basis sales were down 2,030 from November 2005.

Sales Patterns

There are several different factors that interact to make up the current sales numbers.  One of the most significant is the seasonal pattern clearly seen in the graph below.  The winter months show the lowest sales volume, while the summer months are the highest in sales.  This basic pattern is true for each year displayed.

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A second factor is an abnormal market condition.  The investor/speculator craze in 2004 and 2005 was just such a condition.  Therefore comparing sales numbers to those time periods shows a significant decline, which is not necessarily an indication of the health of our real estate market.  I believe sales similar to the 2002 and 2003 sales volume represents a normal sales level for the Phoenix metro area market with current interest rates and job growth.

Commentary

An important phenomenon to understand is the very significant jump in sales between 2003 and 2004.  For most of 2004 and 2005 sales numbers were much higher than would normally have been expected because of the excess home purchases for non-owner occupied purposes.  Investor/speculator buying was a significant contributor to this increase, and we are now seeing many of these properties re-listed on the market.