Pending Sales Are Up In Phoenix

A rise in pending transactions bodes well for the future of real estate in the Phoenix metropolitan area.

As we have noted in the past, the free-market, when it is allowed to operate always has and always will re-dress the housing market. You may not like the way in which it is achieved, but it will occur naturally, if left to regular market forces. By this, I mean that well intentioned programs to enable folks to stay in homes they still cannot afford, only delays the inevitable.

Twice in recent memory, November 2008 and March 2009, prices have dropped so drastically, partly due to foreclosures and partly due to the economy, that sales have leapt up. Many people who thought they had missed the boat are now stepping up and finding that there are many bargains to be had.

Analysts use many benchmarks to gauge the health of the real estate market-pending sales is one of them. A pending sale is classified as one that has an executed contract, with an agreed price, has been taken off the "active" market, and is going through the regular processes prior to closing.

The Cromford report compiles such statistics and shows that in March 2009, pendings were up over March 2008 virtually across the board, with the exception of Anthem and Paradise Valley. The latter probably due to the high cost of homes and the tendency for the wealthier to be able to ride out bad economic times and stay put. The former, Anthem was down a little, but from a statistical standpoint of just one month, may merely be a hiccough.

One minor nitpick with the report is the figures for Cave Creek, which show 45 pendings versus 32 for March last year. Anybody with a working knowledge of Cave Creek would know that 45 is an absurdly high number for such a small town, as was the 32. the compiler of the report makes the same mistake that many "analysts" make. By dint of post office fiat, Cave Creek shares a zip code (85331) with a large portion of North Phoenix. This radically distorts the figures. I complained when the number of foreclosures reported in Cave Creek, which is detrimental to the community, were mis-reported; so in the interest of remaining fair, I must complain when it inflates the re-sale activity as well.

Other than that, things are slowly beginning to recover, so long as government doesn't stop by to "help" again.