Phoenix Median Sold Price Fell 4.5% from June to July and is Forecast to Fall 1.9% in August

By John Wake

Check Out the Latest from the Brilliant Tom Ruff at The Information Market

The Cromford Report

Looking at all residential homes for sale in the metro Phoenix MLS, in a week or two, the number of houses for sale should match levels for the same week in 2015.

The number of single-family, non-distressed houses for sale in the Phoenix MLS is leveling off but is 2.7 times the same week last year.

Last time, the number of houses listed for sale in the Phoenix MLS skyrocketed BEFORE the Great Recession started. This time won’t be like last time but this shows the worst-case scenario.

Twitter

Yikes! https://t.co/zGKpLPD4OH
— John Wake (@JohnWake) August 17, 2022

83% of home builders have reduced prices, mostly through purchase incentives, in the last 3 months.
29% of those builders tell us those incentives totaled 6% or more of the home price.
Most of the 17% who have not reduced priced are located in the Eastern U.S. pic.twitter.com/QsMUkoiRcu
— John Burns (@johnburnsjbrec) August 18, 2022

Prices are set by the most optimistic buyers.

In stocks, the most optimistic buyers will buy when prices are high but they pay market price.

In houses, the most optimistic buyers will buy when prices are high and pay ABOVE market price.

Different price dynamics.
— John Wake (@JohnWake) August 19, 2022

These 2 Tweets on the impact of buyers and sellers having more and more information sounds a lot like Tom Ruff’s comment above about social media.

There's a story.

Back in 2004+ I thought we were flying blind and if we just had more data about what was happening in the market people would realize what was a happening and things wouldn't get so crazy. I assumed people were rational agents. The solution was more data.

1/2
— John Wake (@JohnWake) July 19, 2022

That didn't play out as expected.😀

We have zillions more data but prices went up even faster this time.

Apparently more information allowed more herding, imitation, inertia, irrational exuberance, momentum, over-extrapolation of past price trends, and their feedback loops.
— John Wake (@JohnWake) July 19, 2022

Click on the graphs to go to the full-size, interactive version.

Notice how very small changes in New Listings and Solds eventually cause HUGE changes in the number of houses For Sale and house Prices (see graph above).

This information can vary a lot in different parts of metro Phoenix. Your real estate agent can find the data for your specific city or zip code at The Cromford Report.

Published on August 21, 2022