Listing Success Rate by Month for Metro Phoenix Through August 2014
The Listing Success Rate by Calendar Month is an indicator that allows us to map out previous trends within the Metro Phoenix market to give a few different perspectives. One of the key perspectives is allowing a snapshot of the busy times of the year versus times that are not as productive in the real estate market. The chart below allows those perspectives to paint a bigger picture for everyone in the market to buy or sell a home.
As we see, there is not much of a change with regard to the HUD transaction types. This is mainly because these types of transactions are difficult to qualify for and once a Buyer is pre-approved for this type of lending, they typically do not lose this financing or not close. Although, this process is more strict and does not allow for many hiccups, it provides Buyers with phenomenal benefits that outweigh any difficulty in the process. Buyers who qualify for these types of transactions are also most likely to have better credit (as this is a qualification), so these are the customers that Lenders prefer to keep.
Next, the chart below details the pattern for REO (Bank-owned) transaction types. This transaction type is similar to HUD transaction types, as they tend to have a higher Listing Success Rate by Calendar Month versus other transaction types. This is mainly because the properties that are involved in these types of transactions are actually assets of the lending institution (or, a lending institution). When a financial institution owns a lot of assets in the form of property that is not generating some sort of revenue, this asset becomes upside down. In cases like this, a lender prefers to find a qualified Buyer for their property and, even though there are a lot of different options, Lenders tend to make these loans more appealing. It is a reciprocal system that benefits the Buyer and the Lender.
The most remarkable changes noted in the chart above is actually the Short-sale transaction type. This has made such a significant dip, mainly because the Metro Phoenix real estate market mirrors the Metro Phoenix economical cycle – meaning when there are improvements in the economy of the Metro Phoenix area, those improvements are also reflected (conversely, in this case) in the Metro Phoenix real estate cycle. This is reflected in different ways, one of the most obvious is in the decrease in the Listing Success Rate for Short-sale transaction types. As the economy gets better, the need for Short-sale transaction types goes down. And that is a very welcome trend indeed!
Finally, the Normal transaction type is outlined above. This transaction type is the most reflective of the actual everyday Buyer and, although does not seem to show significant improvement – the improvements that it has have make a significant difference. As noted in the chart above, the Listing Success Rate for May 2011 was approximately 65% and, even with the roller-coaster ride it ends up at 73% in August 2014. This 8% improvement shows that there is more than meets the eye – Normal transactions is the type that picks up the slack when another does not. Most of the time, Buyers are elated to go through and complete the Normal transaction process when purchasing a home.
Based on the information in the chart above, the Phoenix Real Estate Market is still improving over the previous years. It’s a great time to live in the Valley of the Sun – Phoenix Arizona!
Listing Success Rate by Calendar Month for Metro Phoenix Through August 2014
Anna "Banana" Kruchten
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