The Cromford Report – Daily Observations April 2018

    April 30 – Over the last year here is how the big cities rank for appreciation rate. Here we have used the change in the annual average $/SF for single-family homes.

    1. Avondale 9.0%
    2. Maricopa 9.0%
    3. Queen Creek 8.4% (includes San Tan Valley unincorporated area)
    4. Buckeye 8.2%
    5. Surprise 7.8%
    6. Glendale 7.4%
    7. Peoria 6.9%
    8. Mesa 6.9%
    9. Fountain Hills 6.2%
    10. Gilbert 6.0%
    11. Chandler 5.9%
    12. Phoenix 5.9%
    13. Goodyear 5.3%
    14. Cave Creek 5.0%
    15. Tempe 4.9%
    16. Scottsdale 4.3%
    17. Paradise Valley 3.4%

    We can see clearly that the highest appreciation rates have been in the cities with lower overall pricing while those with higher pricing have appreciated more slowly. However they are all bunched together more closely now than they were this time last year. The range at the end of April 2017 was 2.2% (Fountain Hills) to 9.7% (Avondale). Two years ago the spread was even wider with Paradise Valley at -1.5% and Glendale at 10.0%.

    In the Southeast valley, Mesa has consistently out-performed Chandler, Gilbert and Tempe. However the top performing cities have been Maricopa and Queen Creek throughout most of the last 2 years.

    In the West Valley, Avondale and Buckeye have outperformed the rest while Goodyear and Peoria have been the laggards.

    In the Northeast Valley there has been less consistency, although Paradise Valley and Fountain Hills has generally lagged the other cities. Having said this, Fountain Hills is currently number one among the Northeast cities,

    April 27 – The housing market in Greater Phoenix is very strong but it is no longer improving for sellers. The Cromford® Market Index for the single-family markets in the top 17 cities is shown in the table below:

    We note that only 6 out of the 17 are showing improved conditions for sellers compared with March 26 while 11 are showing some deterioration.

    The 3 cities with the strongest improvement are Fountain Hills, Buckeye and Maricopa, on the fringes of the valley.

    Among the cities where conditions are worsening for sellers, Tempe, Goodyear, Chandler, Paradise Valley, Glendale and Peoria are most prominent.

    Gilbert has overtaken Chandler to take the number 2 slot. At number 9, Buckeye is now at its highest place ever.

    To puts things into perspective, 16 of the cities are still seller’s markets while Paradise Valley is in the balanced zone with a slight bias in favor of sellers. Not really anything for buyers to celebrate, but at least things have stopped moving against them.

    April 26 – Zillow is actively soliciting Instant Offers on its web-site now. If you enter a Phoenix area address, the home will appear with a prominent “Get Started” button which did not appear last week.

    A couple of obvious differences from Opendoor and OfferPad:

    • Zillow does not appear to be limiting themselves to homes under $500,000
    • They state that it will take 2-3 business days to get an offer, rather longer than the existing iBuyers, where 24 hours is the norm

    Having flirted with high sellers charges of around 9% this time last year, Opendoor seems to have settled down to a seller’s fee of 5.5% to 6% in 2018. The 9% level hurt their volume, but 6% seems to be pulling in an increasing number of sellers. The monthly rates for Opendoor are currently 278 purchases per month and 254 sales per month. This is up from 210 and 241 respectively at this point last month.

    OfferPad are less active, with a purchase rate of 72 and a sales rate of 86 per month.

    On top of these we still have Cerberus acquiring homes in the same price range to turn them into rentals. Their buying rate has eased from 270 last month to 155 in April.

    For once, a new entrant has decided not to launch first in Phoenix. The UK-based flat-fee brokerage Purplebricks has targeted California and New York with massive marketing spending. Good luck with that. The Purplebricks model has been extremely successful in the UK and Australia, but we will have to wait and see how they fare in the USA. The rules of the housing game are very different between the UK and the USA, in fact there is very little common ground. Almost everything you learn at AZ real estate school does not apply in the UK. There is no licensing of real estate agents in the UK, caveat emptor is the legal guide (i.e. no disclosures), there are almost no buyer’s agents and seller’s agents have no fiduciary duty to their clients. They also charge a lot less, but you tend to get less than what you pay for.

    I hear that Purplebricks has just started recruiting agents in Phoenix to become “Local Property Experts”, so it is possible they will launch here in the next 2 or 3 months.

    YouTube recruiting video

    April 25 – The latest S&P Case-Shiller® Home Price Index® was published yesterday and includes sales between December 1, 2017 and February 28, 2018.

    Here are the month to month change percentages:

    1. Seattle 1.74%
    2. Denver 1.23%
    3. San Diego 1.11%
    4. Detroit 1.10%
    5. Los Angeles 1.03%
    6. Las Vegas 1.03%
    7. San Francisco 1.02%
    8. Phoenix 0.92%
    9. Charlotte 0.77%
    10. Boston 0.74%
    11. Dallas 0.57%
    12. Miami 0.56%
    13. New York 0.50%
    14. Cleveland 0.44%
    15. Portland 0.42%
    16. Atlanta 0.40%
    17. Washington 0.39%
    18. Tampa 0.34%
    19. Minneapolis 0.34%
    20. Chicago 0.05%

    In 8th place, Phoenix has improved from 12th last month but not quite joined the upper echelons. It is well ahead of the national average of 0.42%

    Seattle’s pace is extreme again, gaining close to 2% in a single month.

    Here are the year over year changes:

    1. Seattle 12.7%
    2. Las Vegas 11.6%
    3. San Francisco 10.1%
    4. Detroit 8.4%
    5. Denver 8.4%
    6. Los Angeles 8.3%
    7. San Diego 7.6%
    8. Tampa 7.1%
    9. Portland 6.7%
    10. Atlanta 6.5%
    11. Charlotte 6.4%
    12. Phoenix 6.4%
    13. Dallas 6.4%
    14. New York 6.0%
    15. Minneapolis 5.8%
    16. Boston 5.7%
    17. Miami 4.6%
    18. Cleveland 4.1%
    19. Chicago 2.6%
    20. Washington 2.4%

    Phoenix is still in the middle of the pack, moving up from 14th place last month, and very close to the national average of 6.3%.

    April 23 – A quick look at the rental market on ARMLS shows we currently have 1.1 months of supply, the same as this time last year. The average rent per sq. ft. per month stands at 90.3 cents. On April 23, 2017 it stood at 85.8 cents, so the annual increase is 5.3%.

    Fewer listings are being placed through ARMLS. We currently have 2,102 active compared with 2,566 last year. Closed leases have dropped from 2,186 per month down to 1,868.

    It appears that a higher percentage of the rental market is taking place outside of ARMLS listings.

    The average rent for active listings on ARMLS is $2,323, up from $2,155 last year, an increase of 7.8%. This is higher than one would expect and is because many listings below $2,000 are leased without recourse to ARMLS advertising.

    April 21 – For the first 3 weeks of April we have seen 3% more new listings added than last year. This is not a huge number (238 to be exact) but it is a change. During the first 3 months of 2018 we saw 1.3% fewer new listings than in 2017. On its own this will not have much significance, but if new listings continue to run ahead of last year it may start to ease the supply shortage just a little.

    Another change in April is that the Cromford® Market Index has started to decline. This is the first time since 2007 that we have seen a decline during April. The decline is being driven by a fall in the Cromford® Demand Index. This has dropped from a peak of 103.1 on March 23 to 100.7 on April 21. The Cromford® Supply Index has also fallen slightly during this period from 64.1 to 63.7. The change in the Demand Index is the more significant of the two and it now stands well below last year at this time when we saw 105.3. Remember that demand includes the purchases by Cerberus who are acquiring most of their rental homes from ARMLS for-sale listings. So the underlying demand from owner occupiers appears to be noticeably weaker than last year at this point.

    Of course, with supply remaining very low, it is difficult to detect weaker demand in the real world. Only careful day by day study of the numbers reveal the weakening trend. The trend has not lasted long so far, but if it continues for a few months then it could become more significant. It could then show up as fewer homes under contract and lower closings. With 5.2% more agents active than last year, this could become a problem for agent productivity and earnings.

    We are not sounding an alarm here, just keeping a close watch on data signals that are a little surprising.

    April 19 – For the first time in many weeks we have more cities with a downward than upward trend in their Cromford® Market Index:

    10 cities deteriorated for sellers over the last month while 7 improved. Once again, Fountain Hills did very well while Buckeye and Maricopa pleased sellers too.

    Paradise Valley slipped below 110 and is now in the balanced market zone. Tempe, Scottsdale, Goodyear, Peoria and Surprise were the other cities with significant trends lower.

    Avondale consolidated its position at the top of the table.

    There are two modest trends influencing the action:

    1. New listings are now running slightly ahead of 2017 for April
    2. Sales and listings going under contract are slightly less strong (compared with normal) than they were during the first quarter

    This has caused a slight downward trend in the overall market CMI, which stands at 158.3 today, down from 160.2 last month.

    April 18 – Another investment corporation has moved into the Phoenix market, buying 52 single family homes in one transaction. The buyer is Luxor Capital Group which spent $13.1 million in cash on the rental properties. The seller was Living Well Homes, a Canadian investor who bought them during the ideal period in 2011. Luxor is similar to Cerberus but much smaller. Cerberus took a bit of a breather in the first 2 weeks of April but surged back into action this week. Its current run rate is about 190 homes purchased per month, down from 270 last month. Cerberus is also very active buying single family homes in Las Vegas, though its real estate business remains small compared to its other lines of business. For example, it is currently in talks attempting to purchase the Italian national airline Alitalia.

    At present, Opendoor is buying about 280 homes per month while OfferPad is buying about 65 per month. Of course the homes purchased by Opendoor and OfferPad come back onto the re-sale market pretty quickly. So far homes purchased by Cerberus and Luxor become or stay part of the single family rental market. Almost all of Cerberus purchases come from MLS listings, so the reduction in available homes for purchase is significant and not good news for buyers at the affordable end of the market..

    The only good news for buyers is that demand trends are drifting down a little, but so far not nearly enough to compensate for the lack of inventory. The drift down may be associated with higher interest rates, though the connection is not conclusive.

    April 16 – It was recently reported that a new record high of $18,800,000 was recorded for a single family home sold in Scottsdale 85255 during March. This sale did not go through the MLS so it does not affect the MLS record of $17,500,000 set earlier this year.

    A glance at the Affidavit of Value also shows that the purchase price included $2,500,000 in personal property, so the price for the home itself was only $16,300,000 and would therefore not set a new record anyway. The seller was based in California and the buyer in Oregon, intending to use the Silverleaf home as a non-primary or secondary residence.

    April 15 – OfferPad sold a total of 359 homes in Maricopa & Pinal Counties during the first quarter of 2018 at an average price of $254,221. This is a 162% increase in unit volume over 2017, with market share (by unit) growing from 0.5% to 1.2%.

    The average price paid rose 6.4% compared to the first quarter of 2017. Since OfferPad focuses exclusively on low to medium priced homes, the market share by dollar volume is a little lower, but grew from 0.4% to 1.0% between 1Q 2017 and 1Q 2018.

    OfferPad achieved $91.4 million in home sale during 1Q 2018, while Opendoor sold $161.2 million

    Total sales dollars from all sellers was $9,448.0 million, up from $8,282.3 million in 1Q 2017, an increase of 14.4%

    Since the market was expanding so quickly over the last year (especially in terms of dollar volume), the impact of iBuyers on traditional agents was less than if the market had been stable and prices growing at normal inflation rates.

    It is not yet clear if there is a limit on iBuyer market penetration, and if so, what that limit might be.

    April 14 – I am sure almost everyone has noticed Zillow`s announcement that they intend to start operating as an iBuyer in Phoenix. However they have not yet started so we have no statistical data to share about them. I somehow doubt that they will be using Zestimates as the basis for their instant offers, given that, in general, Zestimates are rather high compared with estimates produced by other automated valuation models.

    What we can share is information about how the existing iBuyers fared during the first quarter of 2018, although the data for March is still preliminary rather than final.

    Opendoor sold a total of 665 homes in Maricopa & Pinal Counties during the first quarter of 2018 at an average price of $242,449. This is a 46% increase in unit volume over 2017, with market share (by unit) growing from 1.6% to 2.2%.

    The average price paid jumped 9.5% compared to the first quarter of 2017. Since Opendoor focuses exclusively on low to medium priced homes, the market share by dollar volume is a little lower, but grew from 1.2% to 1.7% between 1Q 2017 and 1Q 2018.

    Opendoor had a rather quiet patch during 2Q 2017, when it appeared to experiment to determine price elasticity. However it it growing fast again now.

    Total quarterly unit sales were up 4.8%, so traditional agents were able to grow their business despite the impact of Opendoor and OfferPad, who we will examine tomorrow.

    April 13 – Our regular look at the Cromford® Market Index for the single-family markets in the largest 17 cities shows a wide range from 111 to 226. However all of these represent seller’s markets. 90-100 is the balanced range and below 90 represents a buyer’s market.

    We see 9 cities showing improvement for sellers and 8 showing deterioration.

    Fountain Hills is the stand-out performer over the last month with supply dropping sharply and buoyant sales. The other cities showing strong trends are predominantly lower-cost areas such as Buckeye, Maricopa, Queen Creek (which includes San Tan Valley) and Avondale.

    The most expensive areas, Paradise Valley and Scottsdale, have weakened over the last month.

    Still very much favoring sellers, the Southeast Valley has changed very little since March 12.

    Phoenix has continued to improve gradually although that trend seems to have run out of steam in the last 10 days.

    April 12 – Based on 2017 Agent Production numbers:

    • To be in the top 20%, an agent needed at least 10 transaction sides
    • To be in the top 10%, an agent needed at least 17 transaction sides
    • To be in the top 5%, an agent needed at least 25 transaction sides
    • To be in the top 2%, an agent needed at least 38 transaction sides
    • To be in the top 1%, an agent needed at least 50 transaction sides
    • To be in the top 100, an agent needed at least 71 transaction sides

    These calculations exclude iBuyer agents and new home sales people. Agents are ranked by numbers of transaction sides rather than by dollar volume.

    April 11 – We have updated the Agent Production Tableau chart to include all of the 1Q transactions. You can find it here.

    A new name has sprung to the top – Daniel Noma, who represents Cerberus Capital Management when it buys homes. With 482 sides up to April 8, Daniel is second only to Jacqueline Moore (698 sides), who represents Opendoor when they purchase homes. In third place is Brian Bair who represents the second major iBuyer in Phoenix – OfferPad (339 sides).

    Among the more traditional agents, the top 10 based on transaction dollars so far in 2018 are:

    1. Jeffrey Sibbach
    2. Beth Rider
    3. Walter Danley
    4. Jason Mitchell
    5. Mike Domer
    6. Joan Levinson
    7. Lisa Lucky
    8. JoAnn Callaway
    9. Robert Joffe
    10. Scott Grigg

    April 10 – Yesterday we looked at the highest ranked ZIP codes for long term appreciation since 2001. Today we do the reverse and look at the weakest ZIP codes by the same measure,

    Here are the top 20 for low long term appreciation.

    Rank ZIP Code Long Term Rate Starting $/SF Current $/SF
    1 Fort McDowell 85264 -2.42% $280.00 $183.52
    2 Morristown 85342 -1.75% $164.08 $120.99
    3 Laveen 85339 0.59% $97.79 $108.28
    4 San Tan Valley 85143 0.83% $87.66 $101.19
    5 Maricopa 85139 0.99% $73.77 $87.38
    6 Scottsdale 85262 1.01% $230.05 $273.47
    7 Tonopah 85354 1.34% $74.93 $94.32
    8 Waddell 85355 1.39% $93.48 $118.63
    9 Casa Grande 85122 1.48% $70.39 $90.63
    10 San Tan Valley 85140 1.52% $88.62 $114.89
    11 Queen Creek 85142 1.80% $94.30 $128.20
    12 Casa Grande 85193 1.91% $63.92 $88.56
    13 Arizona City 85123 1.95% $62.34 $86.99
    14 Rio Verde 85263 2.00% $133.41 $187.70
    15 Litchfield Park 85340 2.00% $92.14 $129.70
    16 Carefree 85377 2.02% $168.79 $238.31
    17 Goodyear 85338 2.08% $86.49 $123.40
    18 Phoenix 85085 2.09% $101.88 $145.48
    19 Wickenburg 85390 2.10% $108.38 $155.08
    20 Phoenix 85045 2.10% $106.17 $154.27

     

    For owners, the least impressive areas for return on investment over the long term from 2001 onwards have been:

    • Pinal County (85122, 85123, 85139, 85140, 85142, 85143, 85193)
    • The Far Northeast Valley (85262, 85263, 85264, 85377)
    • Southwest Valley (85338, 85339, 85340, 85354, 85355)
    • Outer Northwest Valley (85342, 85390)

    Past performance is not a guarantee of future returns, as they often say.

    April 9 – We can rank ZIP codes by their long term appreciation rate. We use the annual average price per sq. ft. and calculate the average appreciation rate between January 2001 and today. We used only single-family detached homes for this exercise.

    Here are the top 20. Some of them might surprise you.

    Rank ZIP Code Long Term Rate Starting $/SF Current $/SF
    1 Stanfield 85172 6.26% $39.91 $113.73
    2 Phoenix 85034 6.04% $48.12 $132.49
    3 Gila Bend 85337 5.93% $22.76 $61.54
    4 Scottsdale 85251 5.19% $114.17 $273.48
    5 Phoenix 85006 5.18% $82.53 $197.30
    6 Eloy 85131 5.04% $49.39 $115.33
    7 Scottsdale 85257 4.92% $88.83 $203.42
    8 Phoenix 85003 4.51% $119.29 $255.52
    9 Phoenix 85008 4.50% $78.89 $168.60
    10 Phoenix 85018 4.49% $139.67 $298.07
    11 Phoenix 85014 4.47% $96.42 $205.16
    12 Phoenix 85013 4.26% $96.38 $198.13
    13 Tempe 85281 4.26% $89.90 $184.64
    14 Phoenix 85015 4.22% $73.17 $149.27
    15 Scottsdale 85250 4.18% $119.65 $242.39
    16 Phoenix 85004 4.12% $106.23 $213.33
    17 Phoenix 85012 4.11% $112.01 $224.39
    18 Tempe 85282 4.04% $79.84 $158.24
    19 Scottsdale 85254 3.97% $105.78 $207.20
    20 Black Canyon City 85324 3.91% $70.65 $136.89

     

    For owners, the best areas for return on investment over the long term from 2001 onwards have been:

    • Central and East Phoenix (85003, 85004, 85006, 85008, 85012, 85013, 85014, 85015, 85018)
    • South and Central Scottsdale (85250, 85251, 85254, 85257) including the “magic” ZIP code 85254
    • North Tempe (85281, 85282)
    • A handful of areas on the outer fringes (Gila Bend, Stanfield, Eloy, Black Canyon City), none of which tend to be on investor target lists

    Many areas are missing from the top 20 list. The best performers in their respective areas are:

    • Southeast Valley: Chandler 85224 (3.87%)
    • West Valley: Glendale 85306 (3.70%)
    • Northeast Phoenix: 85032 (3.84%)
    • North Scottsdale: 85255 (3.71%)

    April 6 – Below is the table of Cromford® Market Index values for the single-family markets in the 17 largest cities:

    We have 10 cities improving for sellers, 6 deteriorating and 1 neutral. This is a positive picture overall but the size of the movements are unusually large. On the positive side we have:

    1. Avondale up 18%
    2. Fountain Hills up 17%
    3. Buckeye up 11%
    4. Maricopa up 10%
    5. Queen Creek up 9%
    6. Glendale down 7%

    Then on the negative side we also have some sizable moves:

    1. Tempe down 12%
    2. Surprise down 10%
    3. Paradise Valley down 9%
    4. Peoria down 8%
    5. Scottsdale down 6%

    With our largest city Phoenix showing a 4% rise, the trio of Chandler, Gilbert and Mesa slightly up (and already very high), the market is showing continued strength. All cities are still in the seller’s market zone (over 110).

    Some parts of the USA are reporting slowing price rises, but we are not seeing that in Greater Phoenix. Appreciation is higher in 2018 than it has been for several years. The annual $/SF for all areas & types is 7.3% above this time last year. The increase last year was 5.2%, with 5.5% the year before that while 2015 gave us 5.3%. Back in 2014 we were still experiencing the coiled-spring effect and $/SF had jumped 17.7%.

    Recent weakness on Wall Street could possibly impact demand in the high end luxury market, but the remainder of the market is showing few (if any) signs of weakness.

    April 5 – Unfortunately the activities of Cerberus makes a terrible supply shortage even worse. As of April 1, the low-end of the market looks like this:

    Price Range Active SFD (not UCB or CCBS) Annual Sales Rate Days of Inventory Normal Days of Inventory Worst Affected
    Up to $100K 64 466 50 76
    $100K – $125K 38 641 22 81
    $125K – $150K 87 2,102 15 79 Yes
    $150K – $175K 184 5,305 13 78 Yes
    $175K – $200K 547 9,476 21 81 Yes
    $200K – $225K 642 8,142 29 103
    $225K – $250K 934 9,048 38 113
    $250K – $275K 713 6,773 38 116
    $275K – $300K 844 6,570 47 128

    Anything single-detached below $275K is now extremely hard to find, and remember the above numbers are for the whole of Greater Phoenix. In the more central areas the supply is negligible.

    April 4 – Now we have more details available about Cerberus purchases in March we can take a look at where the homes they have purchase are located.

    So far they are very concentrated in Phoenix, Glendale and Tempe, these 3 cities representing 77% of all purchases. Mesa, Chandler and Peoria add another 16%. There is a scattering of homes in Surprise, Scottsdale, San Tan Valley, Gilbert & Queen Creek, but it is clear that Cerberus want to be near the center of the valley. Scottsdale is mostly too expensive for them. There are no purchases in Buckeye, Maricopa, Casa Grande, Sun City or Anthem. However there is just 1 in Florence, easily the furthest out we have seen.

    Popular ZIP codes include 85032 (47 homes purchased), 85282 (35), 85051 (38), 85015 (30), 85304 (30) and 85302 (29). These numbers represent a significant share of the homes bought during the last 4 months.

    If you are buying a home in the ZIP codes targeted by Cerberus, it would be realistic to expect a competing offer from them close to asking price.

    April 3 – Back in 2012 and 2013 everyone was asking the Cromford Report when the institutional investors would dump their single-family holdings and cause a glut of homes to appear on the market. When I gave the answer “not anytime soon, maybe never” a lot of people looked dubious. But in fact, very few of those rental homes have come back onto the open market even today. A few have changed ownership as consolidation of companies took place, but the total number of institutional investor homes has changed very little since those days.

    Now things are changing again. However it is not causing homes to come onto the market – quite the reverse. A new very large operator entered the Phoenix market in late November and has been buying up lower priced homes to turn them into rentals. It is already very tough to buy a home below $250,000, now buyers have Cerberus Capital Management to contend with as a competitor.

    Purchase quantities:

    • Nov 2017 – 4
    • Dec 2017 – 28
    • Jan 2018 – 66
    • Feb 2018 – 222
    • Mar 2018 – 263

    So we can see that Cerberus is purchasing almost as many homes now as Opendoor, representing about 3% of the market by unit. In doing so they are reducing inventory available for sale and increasing inventory available for rental.

    Cerberus is privately held and probably the second institutional investor that can accurately be called a hedge fund company. Although many of the early institutions to invest in single-family homes were referred to as hedge funds, most were REITs and all but a few were publicly traded. Blackstone is publicly traded but is otherwise in a similar place to Cerberus, even bigger and heavily diversified.

    Cerberus is also huge, managing over $30 billion in invested capital and focusing on high return (and high risk) distressed investments. Former vice-president Dan Quayle and former treasury secretary John Snow are among the executives, along with founder Stephen Feinberg. They have investments in retail, banking, weapon manufacturing, health care, government services, financial services, apparel, paper, transport, autos and real estate, to name just a few. One of their biggest real estate holdings is in Spain. There they own 80% of a joint venture holding the former assets of bank BBVA – bought at a 61.5% discount from book value and including a large number of foreclosed homes. This mirrors a slightly earlier transaction where Blackstone purchased real estate holdings from Santander, for 10 billion euros.

    About 70% of their purchases up to the end of February came from normal listings on ARMLS. Almost all the rest were from other investors as the second part of a fix and flip. Many of these were listed on the MLS too. In fact 20 of their homes were purchased from Opendoor and OfferPad. The average sales price was $231,746 and median $228,000. All were recorded as cash sales. They are paying current market prices.

    April 2 – Dollar volume of residential sales through ARMLS exceeded $3 billion in March. This is only the third time a single month has exceeded $3 billion in home sales.

    The other 2 months were nearly 13 years ago in June and August 2005.

    April 1 – Not so long ago the market was dominated by bank sales and short sales, and misinformed sources predicted this would continue for a long time thanks to the “shadow inventory” myth. In fact the banks were never “hiding” inventory but the myth spread because of incorrect calculations a large data corporation and the media’s delight in a negative conspiracy theory.

    Now we have a large number of ZIP codes with not one single-family REO for sale and no short sales either:

    • Phoenix 85003 85004 85006 85007 85024 85034 85053
    • Stanfield 85172
    • Valley Farms 85191
    • Casa Grande 85193
    • Mesa 85201 85203 85210
    • Scottsdale 85251
    • Fort McDowell 85264
    • Tempe 85281 95282 85283
    • Glendale 85301 85306 85307 85310
    • Aguila 85320
    • Arlington 85322
    • Gila Bend 85337
    • Morristown 85342
    • Palo Verde 85343
    • Youngtown 85363
    • Surprise 85378

    The list of ZIP codes with no REO listings (but 1 or more short sales is somewhat longer. However REO activity is extremely low even compared with before the bubble of 2004-2006.

    In addition to the above, the following have no single-family REOs:

    • Phoenix 85012 85013 85014 85016 85017 85019 85020 85021 85022 85027 85029 85033 85043 85048 85054 85083 85085
    • Apache Junction 85119
    • Queen Creek / San Tan Valley 85142 85143
    • Superior 85173
    • Mesa 85203 85207 85209 85210 85212
    • Scottsdale 85250 85257 85259
    • Paradise Valley 85253
    • Rio Verde 85263
    • Tempe 85284
    • Gilbert 85295 85296 85297
    • Glendale 85302 85303 85304 85305
    • Litchfield Park 85340
    • Waddell 85355
    • Wittmann 85361
    • Carefree 85377
    • Peoria 85381
    • Buckeye 85396

    These lists include some of the ZIP codes that were most affected by the wave of bank sales. For example Phoenix 85043 had 272 REOs listed on ARMLS in February 2009 along with 142 short sales or pre-foreclosures. Now it has just 1 short sale and only 73 listings in total.

    These days the ZIP codes with the highest number of REOs are some of those that were least affected during the crash. Scottsdale 85255, Sun City 85351 and Peoria 85353 each have 5. This is not because they have unusual levels of distress (they don’t). It is just because they are very large ZIP codes with much higher numbers of homes than the average ZIP code.

     

    © 2018 Cromford Associates LLC

    The data used to create the Cromford® Report is obtained from public records and obtained under license from the Arizona Regional Multiple Listing Service, Inc (ARMLS). Cromford Associates LLC and ARMLS expressly disclaim and make no representations or warranties of any kind, whether express, implied or statutory, as to the accuracy of the data used or the merchantability or fitness for any particular purpose.

    Testimonials

    Ruth Sells was just a pleasure to work with and the best Realtor we have had the opportunity of meeting in many years of searching. – the Stumpfs (client of Ruth Sells)

    Contact Us Now

    Any questions, comments, or feedback