ARMLS - January 17, 2024 Phoenix Metro Area Stats

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Permission is granted only to ARMLS® Subscribers for reproduction with attribution on to “ARMLS® COPYRIGHT 2023 For questions regarding this publication contact Brand@ARMLS.com.

DATA FOR DECEMBER 2023

Published blished January J 17, 2024

Sales are up +6.8% month-over-month.

The year-over-year comparison is down -3.3%.

Closed MLS sales with a close of escrow date from 12/1/23 12/1/2 to o 12/31/23, 2/31/23, 0 day d DOM sales removed

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ARMLS STAT

DECEMBER 2023

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New inventory has a month-overmonth decrease of -26.5% while the year-overyear comparison inc increased by +4 +4.4%.

New MLS listings that were active for at least one day from 12/1/23 to 12/31/23, 0 dayy DOM DO sales sal removed

Total inventory has a month-overmonth decrease of -4.9% while yearRYHU \HDU UHÀHFWV a decrease of -10.2%.

Snapshot of statuses on 12/31/23

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ARMLS STAT

DECEMBER 2023

Snapshot of statuses on 12/31/23

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December UCB listings percent of total inventory was 9.7% with December CCBS listings at 1.6% of tota total inventory.

Months supply of inventory for November was 3.97 with December at 3.54.

Current inventory of Active/UCB/CCBS divided by the monthly volume of DECEMBER 2023, 0 day DOM sales removed hly sales sa

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ARMLS STAT

DECEMBER 2023

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Average new list prices are up +6.6% year-overyear. The yearover-year median list prices went up +4 +4.4%.

List prices of new listings with list dates from 12/1/23 to 12/31/23, 0 day DOM sales removed emov

The average sales price is up +8.7% year-over-year while the year-overyear median sales price is up +4.4%.

MLS sales prices for closed listings with a close of escrow date from 12/1/23 to 12/31/23, 0 day DOM sales removed

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ARMLS STAT

DECEMBER 2023

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An Increase is forecasted in January for Average sales prices while a slight decrease is forecasted in Ja January for median sale prices.

ARMLS proprietary predictive model forecast, 0 day DOM sales removed

Foreclosures pending monthover-month showed a decrease of -0.4% while the yearRYHU \HDU ¿JXUH was down -4.5%.

Snapshot of public records data on 12/31/23 active residential notices and residential REO properties.

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ARMLS STAT

DECEMBER 2023

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Distressed sales accounted for 0.3% of total sales, up from the previous month of 0.2%.

Short Sales were up +3 +300.0% compared to last l year. Lenderowned sales had a -15.4% decrease year-over-year.

New MLS listings that were active for at least one day from 12/1/23 to 12/31/23, 0 dayy DOM DO sales sal removed

Days on market were down -9 days year-over-year while month-overmonth went up +4 days.

MLS sales prices for closed listings with a close of escrow date e from f 12/1/23 to 12/31/23, 0 day DOM sales removed

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

Sh D am 48 PR b w 0- R res w 22 ea k w i l 9 .S -6 ty s a nd ho 4 w 68 H Sc ow ot a ts rd da le H om es .c om

I had no idea that choosing a word of the year was a thing,, but bu apparently, it has been a thing th for quite a while. Despite being aware of the word of the year for the just-ended -ended previous year, like “authentic,” hentic “AI” (although it feels more like an abbreviation than a word), and my personal “rizz” for 2023, I’ve stuck to my sonal favorite, fa ’ve always alw own word for the year – “OVER!” I never realized that people a word to “set their and theme for the eople chose c ir intentions inten New Year.” I’m thinking this concept was something started by life coaches. r elep Now that I know, this year, instead of my usual resolutions of tackling my elephantine and lethargic tendencies, I’m going to opt for a gentle guiding “rizz”, but it’s just too 2023 ng word wo for 2024. I thought about choosing ch IRU PH $V IRU P\ ZRUG IRU ,¶OO VKDUH WKDW LQ MXVW D ELW %XW ¿UVW WKLV LV \RXU 67$7 <HDU LQ 5HYLHZ H WKD LQ V LV \RX As per our usual custom, we will from prior writings, providing a ill begin beg our “Year in Review” with excerpts e quick highlight reel for each month. th. After Afte our monthly mo ly rundowns, run ns, we will w then share a series of annual charts, and rap up by taking a glimpse forward ward to t 2024.

24.

This is your STAT 2023 Year in Review Review:

7

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

January 2023

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2023 sales volume came out of the starting blocks blazing like a turtle and maintained that pace throughout the calendar year. With interest rates rising to 7.3% in late October extremely err and a early November 2022, January’s Ja low sales volume came as no surprise. The 4,265 home sales,, as reported

by ARMLS, were lowest rep e the he second se sales total for January in the last 20 years, as only 2008 reported sales. Also, January ported orted fewer fe ary y is that tha time of year when prognosticators prognosticate. Goldman Sachs demonstrated questionable judgment monstra onstra gment nt in January 2023.

Despite the cautious use of the word “could” in their assessment, assessme ssessme the pessimistic sentiments entiments ntiment were exacerbated by housing crash disciples who persisted in their predictions June, eventually falling silent. dictions until u ling radio rad ra

And here was our response respo e to their respon thei th forecast. recast.

Do they even actually remember emem memberr 2008?

2008 It is absolutely amazing how many times in the past few weeks I’ve seen and heard the year 2008 bandied in housing reports. For those that don’t remember, 2008 was the ndied died about ab epicenter of what is referred to as The he Great Recession.

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

February 2023

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7KH KRXVLQJ EXEEOH EXUVW FDXVLQJ D JOREDO ¿QDQFLDO FULVLV ,W ZDV WKH PRVW VHYHUH HFRQRPLF UHFHVVLRQ LQ WKH United States since the Great Depression of the 1930s. In 2008, Maricopa County reported upwards of 8,500 new notices of trustee sales recorded in a single month and actual foreclosures (recorded Trustee’s Deeds) surpassing 4,500 in a single month. In 2008, by year’s end, the median saless prices fell 46% from a high in of $264,800 to p pr n 2006 2 a December close of $143,000. Whether we blame Goldman Sachs achs for fo f conducting a lazy analysis nalysis alysis or the headline editor of hyperbole, our market is actually experiencing a needed eeded eded and an a necessary market correction, correctio rrectio not a crash.

)OXFWXDWLRQV LQ PRUWJDJH UDWHV KDYH D PXFK PRUH DFXWH LPSDFW RQ DႇRUGDELOLW\ WKDQ KRXVH SULFH DSSUHFLDWLRQ XFK PRU PR UGDELOLW\ GDELOLW\ or depreciation. The impact of the changes in will become apparent in late n mortgage mortga rates we are seeing ng this week w March to early June’s closings.

Home prices, like any productt or service, are driven by supply Supply and demand in the servi plyy and demand. d housing market are being impacted environment.

Existing homeowners are reluctant to sell ted d by a volatile olatile interest rest est rate r environm nvironm WKHLU FXUUHQW KRPH EX\ D GLႇHUHQW SURSHUW\ DQG WKHQ ERUURZ DW D KLJKHU UDWH WKHUHE\ UHVWULFWLQJ VXSSO\ HUHQW SUR UHQW SUR HUW\ DQG WK W\ DQG WKHQ ERUUR HQ ERUU Z DW D KLJ DW D KLJ March 2023

The increase in mortgage listings have declined sharply year over year. Not only mor mort age rates rate is the key ke reason ason new n ZHUH KRPHV SXUFKDVHG LQ DQG HDUO\ DW JUHDW UDWHV D ODUJH QXPEHU RI UH¿QDQFHV DOVR WRRN SODFH HG Q DQG HDUO\ 5HG¿Q 'HSXW\ &KLHI (FRQRPLVW 7D\ORU 0DUU H[SODLQV LW WKLV ZD\ ³(OHYDWHG PRUWJDJH UDWHV DUH SHUKDSV D ELJJHU RQRP 7D\ORU 0 RQRPLV 7D\ORU UU H[SODLQ H[SODL deterrent for would-be sellerss than for fo would-be ould-be buyers. Giving up a 3% mortgage rate for one in the 6% range is a tough pill to swallow.” Currently, just below 60% of what would be considered typical or average. ntly, tly, supply supply ply registers reg For homeowners with low mortgage ge e rates, rates it makes perfect sense to stay put, but what about homeowners with either low or no mortgages? That’s right, rig I’m talking about the boomers. righ 9

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

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:KLOH EDE\ ERRPHUV GH¿QHG DV $PHULFDQV EHWZHHQ WKH DJHV RI DQG FRPSULVH MXVW RYHU RI WKH U.S. population, they account for nearly 42% of homeowners nationwide. In a recent point.com survey (I have no idea who they are, what they do or the validity of their data), the question was asked, “How important is it for you to remain living in your home as long as possible?” As a boomer, who other boomers and does ho knows kno kn oes boomer things, the results of the point.com survey make sense to me.

Survey Results for Question “How important is it for you as long as possible” ou to rremain living in yourr home a via Point.com

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

April 2023

May 2023

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As the title and mortgage industries are aware, sales volume in April was down 25.1% year over year. In terms of sales volume as reported by ARMLS, April’s sales volume of 6,535 homes ranked 19th out of the 21 years ARMLS has reported data. Only 2007 and 2008 saw lower sale volumes. volume The median sales price ice rose ro for the third consecutive month. Prices are rising due to restricted supply. We are ar once again approaching g a dire di shortage of homes for sale.

In May, institutional buyers, corporate buyers homes and sold 49 for yers and an hold entities purchased ased 57 resale r a net gain of eight homes as a group. The institutional buyer’s activity has shifted away from resale purchases to tutio focusing on build-to-rent properties. Our current Newly built home sales are up curren shining star is “new construction.” nstruct 11.75% year over year in Maricopa County. builders are in an optimistic mood with their stock prices recently unty. Home H optimi hitting new highs.

June 2023

$V ZH WUDQVLWLRQ IURP RXU ³EX\LQJ VHDVRQ´ WR WKH ³Rႇ VHDVRQ ´ , H[SHFW SULFHV WR ³ZREEOH´ WKURXJKRXW WKH URP RXU EX\ QJ DVRQ´ W H ³Rႇ VH remainder of 2023. STAT for July to be $430,000. Our recent projections have TAT is projecting rojecting the he median media sales ales price p been slightly lower than n the t e reported reporte median price. Our Ou reported median sales price of $443,000 in June may very well be the high-water mark 2023 closing numbers are reported, it is not unreasonable to expect a ark for fo 2023.

023. When W c modest year-over-year increase price. Reports of our housing values collapsing in 2023 look e in the median dian sales s extremely foolish.

11

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

July 2023

August 2023

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“Comparisons with this time last year continue to get easier, as a year ago the market was deteriorating quickly as institutional investors and iBuyers pulled out of the market. ke Now we have a re-sale market which is plodding along slowly with poor demand and weak supply. There e is little lit to get excited about unless you are in the QHZ KRPH FRQVWUXFWLRQ EXVLQHVV ´ ³$W WKH WLPH RI ZULWLQJ WKH W\SLFDO \HDU ¿[HG PRUWJDJH UDWH LV XS WR VR W\SLFD H UDWH L D௺RUGLQJ WR EX\ D KRPH MXVW JRW D OLWWOH KDUGHU 6HOOLQJ DQ H[LVWLQJ KRPH ZLWK D PRUWJDJH ORRNV HYHQ OHVV DWWUDFWLYH [LVWLQJ RRNV VR QHZ 0/6 OLVWLQJV DUH DUULYLQJ LQ YHU\ ORZ QXPEHUV DV WKH\ KDYH GRQH DOO \HDU ´ DV WKH\

It was reported in a recent theMReport.com declined to their lowest level com article that mortgage applications pplicati VLQFH 'HF +LJKHU LQWHUHVW UDWHV KDYH OHIW KRPHEX\HUV IDFLQJ DႇRUGDELOLW\ LVVXHV ZKLOH KRPHRZQHUV DUH DYH OH ႇRUGDEL disincentivized to sell. In conclusion, the number of home listings under are down, which has led to num nder contract co fewer mortgage applications, which,, in turn, home September sales volume will be tu , will lead to fewer fe ome closings. clo inauspicious, but as Michael Orr of the Cromford romford report eport reminds re nds us, “The important measure is the balance between supply and demand, not demand is down more than demand is down, so prices mand on o itss own. At At the moment, mom nt, supply sup DUH ¿UP ´

12

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

September 2023

October 2023

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According to a recent Fannie Mae survey, as reported by Doug Duncan, Fannie Mae Senior VP and Chief Economist, “High mortgage rates have surpassed high home prices es as the top reason why consumers think it’s a EDG WLPH WR EX\ D KRPH &RQVXPHUV DUH DOVR QRW VHHLQJ PXFK D௺RUGDELOLW\ UHOLHI LQ VLJKW DV WKH\ FRQWLQXH WR H[SHFW D௺RUGD KH\ FR KRPH SULFHV WR LQFUHDVH LQ WKH QH[W PRQWKV 7KH\ DOVR LQGLFDWHG WKDW WKHLU SHUVRQDO HFRQRPLF VLWXDWLRQV DUH GLFDWHG RPLF VKRZLQJ VLJQV RI VWUDLQ LQFOXGLQJ ORZHU \HDU RYHU \HDU KRXVHKROG LQFRPHV DQG D UHGXFHG VHQVH RI MRE VHFXULW\ XVHKRO G VHQ ,Q RXU YLHZ DOO RI WKLV SRLQWV WR KRPH SXUFKDVH D௺RUGDELOLW\ UHPDLQ D SUREOHP IRU WKH IRUHVHHDEOH IXWXUH ZKLFK ZH ELOLW\ UHP IRUHVH forecast will keep home sales sluggish into next year.” words, for the near futur future, we expect more of the r ” In other o same.

Housing is shelter, and when it comes to shelter, you can buy or you can rent. While ARMLS is the go-to source for listing and public recordss data, limited of rental data. At STAT, we have access data we are ar somewhat mew ited in terms te to the best local analysts on public ublic records rec s data, MLS LS data dat and nd builder build data, just not apartment data. It is often UHSRUWHG WKDW 0DULFRSD &RXQW\ LV H[SHULHQFLQJ D VHYHUH KRXVLQJ VKRUWDJH , ¿QG WKHVH UHSRUWV KLJKO\ VXVSLFLRXV , QW\ LV H ULHQFLQ D VHYHUH XVLQJ ZRXOG DJUHH WKDW ZH KDYH DQ DႇRUGDEOH KRXVLQJ VKRUWDJH EXW DQ RYHUDOO KRXVLQJ VKRUWDJH ,¶P QRW VR VXUH DQ Dႇ GDEOH KR QJ VK J JH EXW November 2023

,Q 1RYHPEHU ZH RႇHUHG RXU ³KROL67$7´ ZLWK D TXLFN PDUNHW EUHDNGRZQ XSGDWHG \RX RQ QHZ KDSSHQLQJV LQ RႇHUH XU ³KRO 7´ ZLWK WKH ZHVW YDOOH\ DQG VKDUHG WKUHH UHFHQW QHZV DUWLFOHV ² WZR QDXJKW\ DQG RQH QLFH :H ¿QLVKHG RXU KROL67$7 ZLWK HH UHF QHZV D sage advice for both sellers and d buyers b rs from none other than Tina Tamboer. November was a time for setting the WDEOH OLWHUDOO\ DQG ¿JXUDWLYHO\ DV ZH EHJDQ WR XSGDWH RXU DQQXDO FKDUWV H EHJD J

13

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

Now for the promised charts.

ARMLS SALES DATA VOLUME 2023: 70,605

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Home sale volume was down 14.00% year over year, and nd 32.27% 32.27 lower than 2021’s precipice. precipic ecipic Out of the \HDUV $50/6 KDV EHHQ UHSRUWLQJ GDWD RQO\ DQG ZHUH ORZHU 7KH GLFWLRQDU\ GH¿QHV UHFHVVLRQ DV D ZHUH ZHU \ GH¿QHV H¿QHV ³SHULRG RI WHPSRUDU\ HFRQRPLF GHFOLQH GXULQJ ZKLFK WUDGH DQG LQGXVWULDO DFWLYLW\ DUH UHGXFHG JHQHUDOO\ LGHQWL¿HG E\ GH DQG LQ DQG LQ GXFHG J FHG J a fall in GDP in two successive quarters.” With a decline sales volume of 21.70% ine ne in overall ov 1.70% from 2021 to 2022 and 14.00% decline this year, I think it safe to say our housing has been receding. housing market m eding. ng. The Th T Federal Reserve began KLNLQJ UDWHV LQ 0DUFK RI 7KH LPSOHPHQWDWLRQ RI WKHVH SROLFLHV ZDV WDUG\ DEUXSW FRQVLVWHQW DQG HႇHFWLYH LRQ RI WK RI W \ DEUXSW DEUXSW

14

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

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ARMLS Total Sales by Year with Rank via ARMLS

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

ARMLS MEDIAN SALES PRICE DATA: $430,000

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7KH PHGLDQ KRPH VDOHV SULFH SHDNHG LQ 0D\ -XQH RI DW DQG ¿QLVKHG ZLWK D PHGLDQ sales price of $411,995. This past year, even though we had dismal As a result, mal al demand, supply was even weaker. w ARMLS reported a 4.37% increase in the median sales price. Ass evidenced from the chart below, prices have evide evid low, home h UHPDLQHG UHODWLYHO\ ÀDW RYHU WKH ODVW \HDUV Percent Change in Year over Year Median Sales Priceas

by ARMLS December riceas ceas Reported R Decemb ecemb 2002-2023 via ARMLS

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

ARMLS GROSS DOLLAR VOLUME: $38,938,131,025

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ARMLS reported the fourth highest gross dollar volume total in its 23-year reporting history. Even though we saw weak sales volume, home price gains in 2023 were positive, quite ive, ve leaving 2023 gross dollar volume vo respectable. Industry professionals that rely on transactional volume a very challenging olume ume experienced e allengin engin year.

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Gross Dollar Sales Volume as Reported by ARMLS Year and Rank via ARMLS S by Yea MLS LS

17

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

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The chart below portrays ARMLS sales volume on a quarterly basis and is quite telling. 2018 and 2019 show W\SLFDO VHDVRQDO SDWWHUQV LQ WKH GDWD 7KH WKLUG TXDUWHU VSLNH LQ UHÀHFWV WKH LPSDFW RI &RYLG VWLPXOXV PRQLHV people going home to work and wanting more space, and historically low interest rates. 2021 shows sales volume returning to a regular seasonal pattern, but at elevated levels. We rates in the e then th see the impact of rising mortgage m third quarter of 2022 with a sudden fall in demand. When viewing pattern wing g 2023 202 data, you’ll see the same me seasonal se as 2018 and 2019, but at extremely muted values.

ARMLS Quarterly Total Sales via ARMLS

18

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

WALL STREET BUYS: 2,014

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Let’s now leave ARMLS data and look at public records data for Maricopa County. In 2023, Wall Street buyers (institutional + iBuyers) accounted for 2,014 total home purchasess in Maricopa County. This is down 86.75% from do their 2021 record insanity. The aftermath of their lack of logic and in 2021 led to billions d restraint rest ions ns of dollars in losses for the iBuyers and left institutional buyers with ROI’s far below elow ow what wha they had been experiencing. riencing. ncing Yearly Total iBuyers and Institutional Buyers via The Information Market he Infor

19

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

At their peak, “Wall Street” investors consumed between 10% and 12% of all homes purchased in Maricopa &RXQW\ 7KH ZRUVH SDUW ZDV WKH\ ZHUH DOO GULQNLQJ IURP WKH VDPH FXS²DႇRUGDEOH KRXVLQJ VSHFL¿FDOO\ KRPHV SULFHG in the $300,000 to $500,000 range.

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Yearly Total Ratio of iBuyers and Institutional Buyers to Total Sales via The Information Market otal al Sa Sal on n Mar

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

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When we turn to the quarterly charts, we can see the gradual increase in iBuyer activity from 2015 through 2019. Then came Covid-19 in the second quarter of 2020 when they temporarily ceased operations. They may not have caught the virus, but they did catch an extremely bad case of FOMO (Fear Of Missing Out). Nothing cures a bad case of FOMO like quarterly reports, and in theirs, the iBuyers billions, with a couple off the rss lost lo l t players even choosing to cease iBuying activity. Today, their purchases are a fraction and early fractio of what they were in n late ate 2021 20 2 2022. We’re no longer seeing losses when comparing the price iBuyers purchased ce at which w sed their properties and the SULFH DW ZKLFK WKH\ ZHUH ³ÀLSSHG ´ $FFRUGLQJ WR RXU FDOFXODWLRQV L%X\HUV DUH SD\LQJ DURXQG RI DSSUDLVHG YDOXH XODWLRQV WLRQV URXQG QG on current purchases.

21

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

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Quarterly iBuyer Buys via The Information Market

When we turn n to the quarterly uarterly chart hart for institutional in titutional utiona buyers (wall street monies with a buy/hold/rent strategy), we see a chart very similar im ar to the quarterly uarterly iBuyer iBuyer uyer chart. cha The institutional buyer’s activity has shifted away from resale purchases to focusing sing on o build-to-rent build-t ent build-tont properties. prope

22

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

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Quarterly Institutional Buyer Buys via The Information Market

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

AND THE OSCAR GOES TO:

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And the trophy for the best performing residential housing sector in 2023 goes to new construction! While WKH RWKHU UHVLGHQWLDO VHFWRUV RYHU WKH SDVW ¿YH \HDUV KDYH KDG WKHLU KLJKV DQG ORZV QHZ FRQVWUXFWLRQ KDV EHHQ HLU K LU UXF steady and consistent. Home builders had a very good 2023, with th home hom builder stock pricess hitting record highs. In a recent Realtor.com article, Kelly Zuccarelli, the National Builder for Wells ilder and an a Condominium Program gram m Manager Ma Fargo Home Lending, summarized our current environment ³%XLOGHUV DUH R௺HUHG ¿QDQFLQJ LQFHQWLYHV ment nt perfectly, perfe ௺HUHG ¿Q HG ¿Q W\SLFDOO\ QRW DYDLODEOH IRU EX\HUV RI H[LWLQJ KRPHV SXUFKDVHUV RI QHZO\ EXLOW KRPHV FDQ VHH PRUH D௺RUGDEOH PRQWKO\ UFKDVHUV FKDVHUV FDQ VHH payments compared to buyers of similarly priced existing existing homes.” h Sales of Newly Built Homes in Maricopa County

by Year via The Information Market ounty b rmation mation M

24

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

Maricopa County Foreclosure Data:

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Remember the Goldman Sachs report we mentioned in January and the “potential” 2023 housing collapse that was to rival 2008? Well, let’s just share the charts. To be totally transparent, we were wrong in our an ans ou projections also, as we had anticipated a slight increase in distressed residential and, instead, we saw decline. al properties prope aw a modest m Total Year Ending Inventory of Distressed Residential Properties Active Notices + Bank Owned Homes via al Prope The Information Market

25

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

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With foreclosures, homeowners with equity have options, making an actual foreclosure highly unlikely. Here is a snippet from the annual median appreciation table which we displayed earlier. The chart runs from 2011 through ,W¶V VDIH WR VD\ KRPHV SXUFKDVHG EHWZHHQ DQG XQOHVV UH¿QDQFHG KDYH FRQVLGHUDEOH HTXLW\ 2YHU WKH ODVW WZR \HDUV KRPH SULFHV KDYH UHPDLQHG UHODWLYHO\ ÀDW OHDYLQJ KRPHEX\HUV ZLWK PLQLPDO GRZQ SD\PHQWV ZLWK LQJ QJ GR little-to-no equity, which makes them more vulnerable by default. also be noted thatt we had ult.. It should sh sho ha extremely low sales volume the past two years, further restricting the number falling into this category. mber er of buyers b bu egory Annual Appreciation Table Snippet from 2011-2023 The Information Market 3 via Th et

26

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

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We did see the expected modest increase in year-over-year notice of trustee sales. 2023 saw 254 more residential notices recorded in 2023 than in 2022, an increase of just over one notice per business day. The 3,844 notice of trustee sales recorded in Maricopa County in 2023 is still extremely low. Distressed property sales and purchases will again be a non-topic in 2024.

Residential Notices of Trustee Sale by Year via The Information ormation matio Market

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

Sh D am 48 PR b w 0- R res w 22 ea k w i l 9 .S -6 ty s a nd ho 4 w 68 H Sc ow ot a ts rd da le H om es .c om

7KH ¿UVW GDQJHU ]RQH IRU IRUHFORVXUH DFWLYLW\ LV WZR \HDUV DIWHU D ORDQ¶V RULJLQDWLRQ $ PDMRU LPSHWXV IRU IXWXUH foreclosure activity is the environment (prices/mortgage rates/down payments/volume/underwriting standards) at WKH WLPH WKH KRPH ZDV SXUFKDVHG UH¿QDQFHG +RPHV SXUFKDVHG DIWHU WKH ODVW QG TXDUWHU RI ZLWK D PLQLPDO down payment would be considered at risk. Foreclosure activity in n 2023 20 remained at historical lows.

2 low It should be noted, 2020 and 2021 numbers were being subdued through government intervention. There governm vernm re were only 354 homes foreclosed on in 2023, 70 of the 355 homes foreclosed on were ere from fro loans that originated d in n 2005, 2005 2006 and 200.

Yes, we are still cleaning up dirty laundry from 17 to 19 years ars ago. ago The 70 homes foreclosed closed sed on o in 2023 exemplify P\ GH¿QLWLRQ ³7KH HQYLURQPHQW DW WKH WLPH WKH KRPH ZDV ¿QDQFHG ´ ZDV ¿QD

28

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

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Completed Residential Foreclosures via The Information Market

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

Our 2023 Family Photo

H om es .c om

H ow ar d

If there is one chart that perfectly portrays the decline in real estate activity over the past two years in Maricopa County, it would be this one. In 2005 there were 1,974,575 County, in 575 documents recorded in Maricopa ar 2021 there were 1,387,670 documents recorded and in 2023 there ere were we only 662,637. The number numbe umbe of documents recorded in Maricopa County this past year was 52.25% lower wer er than 2021 and 66.44% lower werr than 2005’s record total.

Ninja loans in 2005, historically low rates in 2021, and a rising sing rate ra environment in 2022 22 and nd 2023 20 scream, “Federal policy matters.“

nd

Number of Recorded Documents in Maricopa County by Year via The Information a Coun formatio ormatio Market

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

In Conclusion:

Sh D am 48 PR b w 0- R res w 22 ea k w i l 9 .S -6 ty s a nd ho 4 w 68 H Sc ow ot a ts rd da le H om es .c om

We started our year in review talking about a single word to describe 2023 and a single word to guide and inspire us in 2024. “Cyberattacks”, “lawsuits”, “volitleinterestrates”, “lowdemand”, “lowersupply”, tere er we “extremlylowtransactionalvolume”, “stableprices” and “marketcorrections” are all single words correctio rrectio ds that accurately a describe the past year. I’ll stick with my word for the previous us year- “OVER!” The Federal Reserve has raised interest rates 11 1 times since March 2022, the e fastest fastes pace of tightening since WKH HDUO\ V ,Q WKH SDVW WZR \HDUV WKH )HGHUDO 5HVHUYH KDV UDLVHG LWV EHQFKPDUN UDWH WLPHV LQ DQ HႇRUW WR 5HVHUYH HVHUY KPDUN UDW DUN UD FRRO LQÀDWLRQ 1RZ WKDW LQÀDWLRQ KDV VORZHG WKH )HGHUDO 5HVHUYH H[SHFWV WR KROG UDWHV VWHDG\ EHIRUH FXWWLQJ WKHP H )HGHU HGHU KROG UDWH ROG UDWH later in 2024. At least, that’s what Google would ChatGPT would tell ould ld tell you. y ell you that th attempting to predict mortgage rates is discouraged because numerous unpredictable factors such as economic unp predict edic economi conomi indicators, global events, central bank policies, and market speculation make ake the th task highly unreliable e and risky. ris 7KDW VDLG ZH ¿QG RXUVHOYHV EHJLQQLQJ LQ DOPRVW H[DFWO\ WKH VDPH SRVLWLRQ DV ZKHQ WDONLQJ DERXW V EHJLQQ EHJLQQ QJ J DOP DOPR [DFWO\ WKH DFWO\ WKH IRXU NH\ PHWULFV VXSSO\ GHPDQG VXSSO\ YV GHPDQG DQG LQWHUHVW UDWHV DQG VXS \ YV GHPD DQG VXSS YV GHPDQG DQG L QG DQG WHUHVW UDW UHVW UDW &URPIRUG 6XSSO\ ,QGH[ QGH[ GH[ &URPIRUG 6XSSO\ ,QGH[ O\ ,QGH[ \ ,QGH[

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31

ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

Sh D am 48 PR b w 0- R res w 22 ea k w i l 9 .S -6 ty s a nd ho 4 w 68 H Sc ow ot a ts rd da le H om es .c om

• The 30-year FRM averaged 6.66%as of January 11, 2024, up from last week when it averaged 6.62%. A year ago, at this time, the 30-year FRM averaged 6.33%. eek ek when whe it averaged 5.89%. A year ago ag at this time, the • The 15-year FRM averaged 5.87%, down from last week 15-year FRM averaged 5.52%. ectations ctations for the coming year, with this thi year’s STATs leaving Similar metrics to begin the year set similar expectations me a little hopeful. In the words of Michael Orr, “We which way things are e are still stil very short of 2024 data st ata a to show sh s heading. Both supply and demand are picking up, as we Supply has risen 0.5% w would always expectt in n January.

Janu LQ WKH ¿UVW GD\V ZKLOH OLVWLQJV XQGHU FRQWUDFW DUH XS 7KLV LV EDUHO\ HQRXJK GDWD WR GUDZ D FRQFOXVLRQ EXW WKH FW DUH XS DUH XS RXJK GD indicators are better for sellers than buyers. ratio has risen to 35.98. this is consistent with rs. The The contract c n from rom 35.13 35 a neutral, balanced market, but with the e trend again moving in favor off sellers. sellers seller I would say a case for (very) mild optimism can be made. There is certainly rtainly ainly no sign whatsoever of a housing market crash. What the market needs most now is higher transaction volumes. coming, but to hope for it is legitimate.” And with olumes. mes. I do no not yet know if that at is com that, our word for 2024 – “HOPE!” PE!”

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ARMLS STAT

DECEMBER 2023

COMMENTARY

BY TOM RUFF

ARMLS PENDING PRICE INDEX (PPI)

Sh D am 48 PR b w 0- R res w 22 ea k w i l 9 .S -6 ty s a nd ho 4 w 68 H Sc ow ot a ts rd da le H om es .c om

Last month, STAT’s mathematical model projected the median sales price for December at $435,000; the actual amount was $430,000. Looking ahead to January, the ARMLS the median ML Pending Price Index is projecting MLS roj VDOHV SULFH WR UHPDLQ ÀDW LPSO\LQJ D PHGLDQ VDOHV SULFH RI ,Q -XQH ZH UHFRUGHG WKH KLJKHVW PRQWKO\

UGHG WK GHG WK median sales price ever reported at $475,000. If our mathematical is correct ($429,900), matical atical model m 9,900), 00), the th median sales price will be 4.85% higher year over year and down 9.49% 9% from our o record high. For the he second secon year in a row, our year end median sales price projection was higher than closing prices,, suggesting reporting errors in an n the reported re sugges the data.

We began January with 3,150 pending contracts, contract 1,649 UCB listings and 272 CCBS, giving us a total of 5,071 residential listings practically under contract. same type of listings one year ago. At act. This compares to 4,910 of the he sam the beginning of January, the “pending”” contracts are very similar, with contra th h this year yye reporting only 161 more contracts than last. There were 20 business days of 2023 and 21 ays ys in January Ja 1 this year. ye yea ARMLS reported 4,265 sales in January 2023. The highest sales volume ever er in January J nuary occurred urred in 2021 021 21 with 7,076. With one extra business day this year and with pending contracts similar, milar, January’s January’s ry’s sales sale sal s volume volum is expected expect to be about 5% higher this year than last.

We are anticipating January’s y’ss home hom closings osings ass reported reported byy ARMLS ARM to be in the 4,500 range.

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ARMLS STAT

DECEMBER 2023