Market Report – Wading Into The Phoenix Metro Pending Pool

Every month ARMLS (Arizona Regional Multiple Listing Service) publishes a Pending Price Index that forecasts average and median sales prices from 1 to 3 months into the future.

The 90 day forecasts were the least accurate when compared to the actual median and average sale price. Recently ARMLS decided to look into the pooling of traditional, foreclosure and short sales in order to determine which individual pendings scheduled to close in in thirty days actually did and how pendings might impact PPI indexing.

In 2011 monthly traditional sale to foreclosure to short sale ratio of pendings scheduled to close in 30 days was 1:1:1 while the same ratio looking at pending property dollar volume was 4:2 or 3:2.

Unsurprisingly, traditional sales and foreclosures closed on time more often that short sales and this data could be verified by actual agent experience in the field. Progressing from 30 to 60 to 90 days the makeup of the pending pool became more and more weighted with short sales. At 180 days  approximately 95% of both traditional and foreclosures had closed, while only 68% of the short sales had closed.

This could indicate why in months where dollar volume of short sales was significantly higher  the accuracy of the PPI 90 day predictions really missed the mark. At 180 days+ almost 14% of the pendings, mostly short sales, hadn’t closed and more than 65% of those would end in failure.

Looking back a couple of years, a short sale closing rate of 68% would have been a marked improvement to what was happening. Short sales have improved and while successful short sales are becoming more frequent the overall performance of pendings in the short sale market is still somewhat volatile and unpredictable.

What does all this mean to home buyers in the Phoenix Metro area? If you can be patient and deal with a potentially frustrating process then a short sale may be something to consider. If not, traditional sales and foreclosures offer the quickest route to home ownership.

Whether you are interested in traditional, foreclosures or short sales I’d love to help. Email or call me at (602) 793-1627 to begin the search for your dream home.

Comments are closed.

Skip to toolbar