(Graphs are from The Cromford Report)

September looked pretty much like August. It was good with some caveats. It won't get interesting, too much, until the tax credit ends November 30th.

Sales were down only a little bit from 7,972 to 7,837. Normally the decrease this time of year would have been greater. Sales are still up 31% from last year, no small feat.

What's encouraging is that pending sales are up over last month. Many of those are short sales waiting for approval, but most are not, so there is lots of interest out there.

For the most part, the problem is no longer too much inventory, and I'm speaking in general, it's the type of inventory. At 4.8 months of supply it is a clear and definite sellers market, though normal sellers will not benefit, because prices are down and there remains lots of distress in the the market.

Even so some normal sellers who are not upside down are able to sell well and there is even a small by tidy flip and fix market filling in a needed niche.

Where there is a bid discrepancy is in the price ranges. Anything at or below the FHA limits is selling fast and especially as the price segments decrease. To give you an example or two. Joanna was out showing homes and one was a home priced below market at $89,000, a lender owned home.

Market price was $100,000-$110,000 but they had 30 offers, many cash and some $50,000 over the asking price. So there were people willing to pay $30,000 to $40,000 or 50% above market value. How silly is that.

How silly is it that agents continued to pour in offers even after knowing there are 5, 10, 15, 20 offers and it's even silly that the listing agents continued to take the offers.

If the buyers is getting a loan there is no way it will go smoothly because there is no appraiser that can even come close to valuing it there.

The only possibility is cash and It would boggle my mind if someone was smart enough to have that much cash and so not knowledgeable to over pay for a property: it's unlikely.  Anyway, that is a common enough scenario, multiple offers and under priced home that is.

On the the other side of the price range there are plenty of choices for luxury home buyers, especially over $800,000. Some of the homes are simply amazing with prices to match. What you would buy in 2007 is half price now and some of the lender owned luxury homes are simply steels: superb bargains.

What is interesting, and we mentioned it last month, is the transfer of dominance from lender owned to pre-foreclosure and short sales. (read about the difference between a shot sale and a pre-foreclosure) The percentage of active homes that are bank owned has slid continually and is down to 12.5% of active properties.

Sales of bank owned home has decreased as well to 49.6% vs 53% last month and 59.8% last quarter. Much of that has to do with the rush to buy lender owned home by both investors and home buyer.

After normal listing, many of which don't even compete or belong on the market, short sales are the predominant group at 36.3%. I say short sales, but it includes pre-foreclosures, though most of the pre-foreclosures in this market are shot sales.

Short sales also make up 19.7% of the sold homes. While still a wild unpredictable process short sales are easier to do then before from all sides, but it's still almost like gambling and with no rules.

Some things we'll look at later this month will be how many homes are purchased cash and how many of those are by investors. We'll also do a comprehensive overview of the small multifamily market at Arizona Apartment Investor, Urban Phoenix market overview and what's going on in North Central Phoenix and of course the occasional city and price specific reports.