Arizona Real Estate and Community News

March 24, 2020

March-18

March 18 - A number of people seem to assume that we are heading for a recession and that home prices will fall. The first assumption is quite reasonable. The second assumption is based on fear and has little analytical data to back it up. Obviously anything can happen in a uncertain and disrupted world, but a fall in home prices is still looking very unlikely from today's numbers.

In 2005 the housing industry started to sicken because homes were being used as speculative commodities not for places to live. In 2005 I met a man in his early 20s who owned 12 homes in the Phoenix area, all with no occupants. How had he been able to buy them? 100% loans from unscrupulous lenders who went bust between 2007 and 2010. The housing industry (and more particularly the lending industry within it) was the cause of the 2008 recession. Phoenix was a hot spot for the cause of the problem, as was Las Vegas.

In 2020, housing is an innocent bystander to a probable recession caused by a pandemic. It has supply at extremely low levels and most homeowners have a large amount of equity. Even if they lost all their income and could no longer pay their mortgage, they could quickly find a buyer to release that equity. There is little likelihood of them facing foreclosure because the lender can be paid off with the sale proceeds. Only when demand collapses do the banks have to foreclose to get their money back. At the moment demand is still well above normal and has only shown very tiny signs of easing. In 2006 demand fell off a cliff yet home builders continued to build even more new homes because lenders continued to write ill-advised loans in huge numbers.

In 2020 builders are probably going to have to build fewer homes than they wish because of shortages of labor and materials. We are unlikely to see a glut of homes on the market for a very long time. A successful vaccine for the novel corona virus is more likely to appear before a surplus of homes could possibly develop.

Because the virus has not been contained yet, except in several parts of Southeast Asia, we are likely to see a lot of people out of work. We do not yet know how long it will take to get control of the pandemic in Arizona, but many people may be out of work for quite some time. These people are more likely to be renters rather than homeowners. Landlords may find it much harder to collect rents and the yields from their portfolios are likely to fall. Some may decide to evict tenants and sell their properties. At the moment the extra supply would be welcomed and receive multiple offers, even in these troubled times. The evicted tenants still exist and therefore still represent demand for shelter of some sort. There will be hardship, but not a flood of homes with no-one to live in them.

Housing demand is created by the existence of people and increases when more people turn up and decreases if they go away. In 2005 the people we were building new homes for were largely imaginary. In 2020 they are very real and migration trends have been very favorable with families and individuals moving to Arizona from other parts of the USA.

All the indicators for the Central Arizona housing market remain very healthy at the moment and we will report any change as soon as we spot one. There is no cause for panic and if you are delaying a purchase because you think the price will come down, you are probably making a poor decision.

 
(Information Provided by The Cromford Report)
Posted in Market Updates
March 22, 2020

Daily-Update

March 22 Update- In the first few days of last week there was little sign of the pandemic having an effect of the housing market. However, Thursday, Friday and especially, Saturday, has given us much more to chew on. There are a number of effects happening at the same time, all of which combine to create a sharp slow down in demand an increase in supply. The effects differ by geography and price range.

More Supply

Active listings without a contract across all areas & types stood at 12,086 on Saturday - up 9% from a week earlier. This is a sudden change from the previous week when counts were close to flat week on week. This is due to a couple of large effects and one small one:

  • a significant increase in new listings arriving
  • a significant decrease in buyer activity, so listings are not going under contract as quickly
  • a few more listings have been taken temporarily off market, but this is a minor effect compared with the 2 above

Since we are all supposed to be avoiding physical human contact, it is not surprising that showing activity has dropped dramatically. Few normal buyers are willing to make an offer without viewing a property, though some investors may be tempted. Since real estate activity has been declared a non-essential business, buying and selling, as well as construction are likely to drop sharply, especially if a close-down is ordered by government, as it has in several states. In fact I am surprised that showings remain as high as they do. Some people are clearly not taking the pandemic seriously enough, which is a big mistake that will cause the virus to spread more quickly and incur a higher mortality rate.

The increase in listings is heavily skewed towards the mid price end of the market. Between Sunday 15 and Sunday 22, we see an over all increase of 11% in active listings without a contract. However there is NO increase in active listings over $800,000. between $150,000 and $300,000 we have an increase of 19% in a single week.

Of course we were starting from an excruciatingly low inventory of active listings between $150,000 and $300,000, so it is not hard to see a high percentage increase from such an abnormally low base.

Why are we seeing more active listings so quickly?

  1. Short term and vacation rental operators have seen their business evaporate overnight. Airbnb bookings are at their lowest in memory and smart owners realize they now have an asset that is expensive to own and run with little to no income to support it. They are placing these properties up for sale or for long term rental, or both.
  2. Opendoor is the largest iBuyer and it has stopped its buying operation completely. We normally see a few hundred homes purchased each month by Opendoor. These do not hit the MLS until many week later after the residents have moved out and they have been readied for sale. Sellers now need to place these listings with agents or with one of the iBuyers that is still providing online offers. It is quite possible that these other iBuyers will do the same thing shortly. This will increase the number of MLS listings temporarily.
  3. A huge amount of wealth has been destroyed on the stock market in the last month as the indexes return to 2016 levels. This leaves cash in short supply and some owners may need to turn fixed assets in liquid assets at short notice.
  4. A large number of snowbirds have returned to their winter homes, in Canada or the northern US states. This is especially true of elderly and retired visitors. Being on vacation during a pandemic was not their plan.

We see the following increases for single-family homes in the 17 largest cities:

  1. Avondale 46%
  2. Gilbert 20%
  3. Chandler 19%
  4. Mesa 19%
  5. Buckeye 15%
  6. Queen Creek 15%
  7. Tempe 14%
  8. Phoenix 14%
  9. Glendale 14%
  10. Peoria 13%
  11. Surprise 11%
  12. Goodyear 11%
  13. Maricopa 9%
  14. Scottsdale 6%
  15. Cave Creek 4%
  16. Paradise Valley 3%
  17. Fountain Hills -5%

The Southeast Valley is seeing the largest percentages, as well as Avondale, which had an extremely low number of listings to start with

By dwelling type, condos and townhomes are being added most quickly, consistent with the liquidation of Airbnb assets:

  1. Condo / townhouse 15%
  2. Single-family detached 10%
  3. Mobile or manufactured 6%

The speed of change is as high as we have ever seen and underscores why it is important to monitor the housing market on a daily basis, not once a month as most people do.

 

Information provided by The Cromford Report
Posted in Market Updates
Dec. 7, 2019

November Market Update

Market Summary for the Beginning of November 2019

We note that October 2019 contained 23 working days and October 2018 contained the same. There is therefore no need to apply any adjustments when comparing the 2 months.

So what are the numbers telling us?

  • The seasonal increase in active listings during October did take place, but was weaker than normal and much weaker than last year
  • Demand remains high, looking at listings under contract and pending listing counts, although it always declines due to seasonal factors between September and November each year
  • Closed sales are still well ahead of last year and were almost as high as last month
  • Sales pricing is finally beginning to take off and has a lot of upward momentum building

Although the Cromford® Market Index has fallen a little over the past month, the huge rise over the prior 8 months is now beginning to have an effect on sales pricing. This is as expected. The CMI is a leading indicator which tends to need 6 to 12 months before its movements are reflected in sales pricing.

Since there is little sign of supply increasing substantially, we can expect continued strong upward moves in sales pricing over the next 6 months. We should be on the lookout for any changes in demand but at the moment interest rate movements appear favorable.

Here are the basics - the ARMLS numbers for November 1, 2019 compared with November 1, 2018 for all areas & types:

  • Active Listings (excluding UCB & CCBS): 14,525 versus 17,953 last year - down 19.1% - but up 5.6% from 13,755 last month
  • Active Listings (including UCB & CCBS): 18,322 versus 21,311 last year - down 14.0% - but up 4.1% compared with 17,592 last month
  • Pending Listings: 5,919 versus 4,770 last year - up 24.1% - but down 1.5% from 6,011 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 9,716 versus 8,128 last year - up 19.5% - but down 1.3% from 9,848 last month
  • Monthly Sales: 8,018 versus 7,352 last year - up 9.1% - but down the tiniest possible amount from 8,019 last month
  • Monthly Average Sales Price per Sq. Ft.: $174.39 versus $165.41 last year - up 5.4% - and up 2.8% from $169.56 last month
  • Monthly Median Sales Price: $285,000 versus $262,000 last year - up 8.8% - and up 2.0% from $279,500 last month

If you or anyone you know is looking to make a move, Please let us know!

Buying | Selling | Investing

480-773-5792

www.Sell4Free-AZ.com

 

 

(Previous Months Market Updates Below:)

October Market Update

September Market Update

August Market Update

July Market Update

June Market Update

May Market Update

April Market Update

March Market Update

February Market Update

January Market Update

Posted in Market Updates
Dec. 7, 2019

October Market Update

October 2019 ~ Market Update

The Cromford® Market Index stayed over 200 for the second month since 2005, but failed to rise further. The market remains hot and very unbalanced in favor of sellers but the situation did not get more extreme. This is largely due to seasonal factors. Between September and December we always see active listings grow each year. October in particular is a very popular month for creating a listing. However sales activity always declines steadily as the temperature cools, despite the influx of snowbirds, some of whom decide to buy somewhere, often in a spot more conducive to retirement or vacation rather than commuting.

In almost every year we have seen a move in favor of buyers during the period September to November, though the effect can be slight, moderate or significant. This year it looks to be slight, but it still exists.

We note that September 2019 contained 20 working days while September 2018 contained only 19. This gives September 2019 a 5.3% advantage. We should bear that in mind when looking at the large increases in monthly sales compared to September last year.

Compared with August 2019, September gave us

  • a slight increase in active listings
  • a noticeable drop in demand numbers (sales, pending, under contract)
  • very little movement in sales pricing
  • a large upward movement in for-sale pricing
  • a large upward movement in under contract pricing

The first 3 of these are to be expected every year in September. The last 2 are not so common and are the first sign of the significant up-tick in pricing that inevitably follows a major move higher by the Cromford® Market Index. It would be surprising if we do not see a corresponding move higher by sales prices over the next several months. Please don't say we didn't warn you.

Mortgage interest rates have plummeted since January creating an unexpected jolt of affordability into the housing market. In most circumstances, greater affordability translates into strong demand. However, there are now significant signs of weakness in the US economy (and the rest of the world). International trade disputes have a history of hurting both sides quite badly. In the USA, the manufacturing and agriculture sectors are probably the most exposed to unwelcome trends. The Federal Reserve will often cut interest rates in a faltering economy and if they do, and if these cuts translate to even lower mortgage rates, we could see continuing jolts of affordability for the housing market. If we are to enter a recession, then the housing market will not be the leading cause like it was in 2008. In Central Arizona it should remain in pretty decent shape as long as the current employment trends hold reasonably steady. Unlike last time, the Greater Phoenix housing market looks well placed to weather a mild to moderate economic storm.

Here are the basics - the ARMLS numbers for October 1, 2019 compared with October 1, 2018 for all areas & types:

  • Active Listings (excluding UCB & CCBS): 13,755 versus 16,819 last year - down 18.2% - but up 1.1% from 13,609 last month
  • Active Listings (including UCB & CCBS): 17,592 versus 20,303 last year - down 13.4% - but up 0.1% compared with 17,577 last month
  • Pending Listings: 6,011 versus 5,195 last year - up 15.7% - but down 5.3% from 6,350 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 9,848 versus 8,679 last year - up 13.5% - but down 4.6% from 10,318 last month
  • Monthly Sales: 7,987 versus 7,067 last year - up 13.0% - but down 10.4% from 8,913 last month
  • Monthly Average Sales Price per Sq. Ft.: $169.58 versus $161.31 last year - up 5.1% - and up 0.2% from $169.19 last month
  • Monthly Median Sales Price: $279,500 versus $260,000 last year - up 7.5% - but down 0.2% from $280,000 last month

If you or anyone you know is looking to make a move, Please let us know!

Buying | Selling | Investing

480-773-5792

www.Sell4Free-AZ.com

 

 

(Previous Months Market Updates Below:)

September Market Update

August Market Update

July Market Update

June Market Update

May Market Update

April Market Update

March Market Update

February Market Update

January Market Update

 

Posted in Market Updates
Dec. 7, 2019

September Market Update

September 2019 ~ Market Update

With the Cromford® Market Index over 200 for the first time since 2005, the market is obviously hot and remarkably unbalanced in favor of sellers. Demand is some 8% above normal, which is strong but not too unusual. What is unusual is that supply is 43% below normal. We have had supply below normal ever since May 2011. but the weak flow of new listings has exacerbated the situation.

Active listings widened the gap compared to last year but declined much less in August than they did in July. Normally active listings grow each year between August 1 and September 1, so even though the decline was gentle it is not good news for buyers.

Listings under contract gained more momentum when compared with 2018 but fell sequentially (as is normal every year). Closed listings beat last year by 6.7%. August 2018 had the maximum 23 working days while August 2019 has one less so this comparison is biased in favor of 2018 making the 6.7% more impressive for 2019 - we are doing about 11% more business through the MLS than this time last year, measured in units. Of course the average price is up over the last 12 months so dollar volume is up by almost 16%.

Demand usually subsides between July and January every year so unless there a brand new trend develops we should see new listings maintain enough momentum to keep active listing counts from falling much further, if at all. However when demand grows again again in February we can expect a mad scramble. We will probably look back on 3Q 2019 and wonder how prices managed to stay so low. Based on existing data, the Cromford® Report expects a strong upward trend in closed pricing between October 2019 and June 2020.

Here are the basics - the ARMLS numbers for September 1, 2019 compared with September 1, 2018 for all areas & types:

  • Active Listings (excluding UCB & CCBS): 13,609 versus 16,222 last year - down 16.1% - and down 1.0% from 13,746 last month
  • Active Listings (including UCB & CCBS): 17,577 versus 19,831 last year - down 11.4% - and down 1.9% compared with 17,920 last month
  • Pending Listings: 6,350 versus 5,262 last year - up 20.7% - but down 2.0% from 6,479 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 10,318 versus 8,871 last year - up 16.3% - but down 3.1% from 10,653 last month
  • Monthly Sales: 8,810 versus 8,253 last year - up 6.7% - but down 5.8% from 9,348 last month
  • Monthly Average Sales Price per Sq. Ft.: $168.99 versus $161.27 last year - up 4.8% - but down 0.42% from $169.66 last month
  • Monthly Median Sales Price: $280,000 versus $262,000 last year - up 6.9% - and unchanged from $280,000 last month

If you or anyone you know is looking to make a move, Please let us know!

Buying | Selling | Investing

480-773-5792

www.Sell4Free-AZ.com

 

 

(Previous Months Market Updates Below:)

August Market Update

July Market Update

June Market Update

May Market Update

April Market Update

March Market Update

February Market Update

January Market Update

Posted in Market Updates
Dec. 7, 2019

August Market Update

August 2019 ~ Market Update

The market is hot and becoming very unbalanced in favor of sellers. Demand recovered suddenly during the second quarter and has stabilized at a level significantly above normal. The last 2 months have seen supply drop sharply from its already low level, so we now have a wholly inadequate number of homes for sale to keep the market functioning normally.

Last month we noted the unusual drop in active listings (excluding UCB & CCBS), which fell to 4.1% below the 2018 level on July 1. On August 1 this gap has expanded to a startling 12.4%. Much of this decline was due to the low number of listings activated during July - 8,260 is our current count, the lowest number for July that we have seen since we started keeping records. With pending and UCB contracts up by 13 to 15% from last year, the supply has tightened dramatically. Where have all the sellers gone?

9,325 closed listings is another strong monthly total for July. The 9.2% growth over July 2018 is a little misleading, however. This is because July 2019 had 22 working days, so the number of closings per day was 424. July 2018 had only 21 days so 407 closings per day. The difference is 4%.

Dollar volume for July was $3.1995 billion. This is the highest total for any July in history.

Pricing is showing no excitement whatsoever, behaving as if the market was normal. This cannot last. Remember that sales pricing is a trailing indicator, often as much as 12 months behind the leading indicators. We expect to see fireworks in pricing over the next 12 months. In fact the current situation reminds us of 2004. The huge imbalance between supply and demand and the absence of distressed properties are very similar. The big difference is that 2004 was seeing large price increases and a significant number of the homes were being bought for resale by speculative investors and remained empty. The level of mortgage fraud in 2004 was also extraordinary. Hopefully that is not the case in 2019.

These are very interesting times, unlike the past 5 years which were stable and predictable.

Here are the basics - the ARMLS numbers for August 1, 2019 compared with August 1, 2018 for all areas & types:

  • Active Listings (excluding UCB & CCBS): 13,746 versus 15,686 last year - down 12.4% - and down 11.0% from 15,442 last month
  • Active Listings (including UCB & CCBS): 17,920 versus 19,415 last year - down 7.7% - and down 10.5% compared with 20,030 last month
  • Pending Listings: 6,479 versus 5,655 last year - up 14.6% - and up 0.6% from 6,642 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 10,653 versus 9,384 last year - up 13.5% - but down 5.1% from 11,230 last month
  • Monthly Sales: 9,325 versus 8,543 last year - up 9.2% - but down 1.7% from 9,483 last month
  • Monthly Average Sales Price per Sq. Ft.: $170.16 versus $160.79 last year - up 5.8% - but down 1.2% from $172.21 last month
  • Monthly Median Sales Price: $280,000 versus $265,000 last year - up 5.7% - and up 0.4% from $279,000 last month

If you or anyone you know is looking to make a move, Please let me know!

Buying | Selling | Investing

480-773-5792

www.Sell4Free-AZ.com 

Saving You Thousands!

Saving You Thousands!

(Previous Months Market Updates Below:)

July Market Update

June Market Update

May Market Update

April Market Update

March Market Update

February Market Update

January Market Update

Information provided courtesy The Cromford Report.
Posted in Market Updates
Dec. 7, 2019

July Market Update

July 2019 ~ Market Update

The months of May and June 2019 were both exceptionally strong, especially considering the market was looking wobbly back in January

Let us start with the basics - the ARMLS numbers for July 1, 2019 compared with July 1, 2018 for all areas & types:

  • Active Listings (excluding UCB & CCBS): 15,442 versus 16,101 last year - down 4.1% - and down 8.5% from 16,869 last month
  • Active Listings (including UCB & CCBS): 20,030 versus 20,464 last year - down 2.1% - and down 8.1% compared with 21,799 last month
  • Pending Listings: 6,642 versus 6,092 last year - up 9.0% - but down 5.3% from 7,015 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 11,230 versus 10,455 last year - up 7.4% - but down 6.0% from 11,945 last month
  • Monthly Sales: 9,463 versus 9,234 last year - up 2.5% - but down 10.1% from 10,528 last month
  • Monthly Average Sales Price per Sq. Ft.: $172.30 versus $163.43 last year - up 5.4% - but up 0.2% from $172.01 last month
  • Monthly Median Sales Price: $279,000 versus $268,000 last year - up 4.1% - and up 0.4% from $278,000 last month

The most unusual change during June was the 8.5% drop in active listings (excluding UCB & CCBS), which lurched from 5.3% higher than 2018 on June 1 to 4.1% below 2018 on July 1. Much of this decline was due to the low number of listings activated during June - 8,731 is our current count, the second lowest number for June since 2001 and down 11% from June 2018. On top of a very busy month for contracts and closings this has caused the supply to tighten dramatically.

9,463 closed listings is a huge number for June. This is because June 2019 had only 20 working days, so the number of closings per day was over 473. June 2018 had 21 days so less than 440 closings per day. The difference is almost 8%.

Dollar volume for June was $3.315 billion. This is the highest total for any June in history.

The monthly median sales price of $279,000 is a new record high. The annual median sales price is also at a new record high at $268,000.

Average price per sq. ft. is nowhere near setting a new record, because the homes being sold today are much larger than those being sold at the last peak. The monthly average $/SF record is $190.05 set in May 2006. We edged up very slightly to $172.30 from $172.01 during June.

We now wait to see if July will continue the strong trends of May and June or start to ease off.

If you or anyone you know is looking to make a move, Please let me know!

Buying | Selling | Investing

480-773-5792

www.Sell4Free-AZ.com 

Saving You Thousands!

Saving You Thousands!

(Previous Months Market Updates Below:)

June Market Update

May Market Update

April Market Update

March Market Update

February Market Update

January Market Update

Information provided courtesy The Cromford Report.
Posted in Market Updates
Dec. 7, 2019

June Market Update

June 2019 ~ Market Update

The month of May 2019 was a monster. New all-time records were set for sales units and dollar volumes through ARMLS, surpassing not only 2018 but the bubble year of 2005.

But let us start with the basics - the ARMLS numbers for June 1, 2019 compared with June 1, 2018 for all areas & types:

  • Active Listings (excluding UCB): 16,869 versus 16,018 last year - up 5.3% - but down 3.7% from 17,513 last month
  • Active Listings (including UCB): 21,799 versus 20,809 last year - up 4.8% - but down 7.8% compared with 23,650 last month
  • Pending Listings: 7,015 versus 6,608 last year - up 6.2% - but down 4.2% from 7,326 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 11,945 versus 11,399 last year - up 4.8% - but down 4.2% from 12,463 last month
  • Monthly Sales: 10,466 versus 10,104 last year - up 3.6% - and up 8.3% from 9,667 last month
  • Monthly Average Sales Price per Sq. Ft.: $172.11 versus $164.23 last year - up 4.8% - but down 0.01% from $172.20 last month
  • Monthly Median Sales Price: $278,000 versus $265,000 last year - up 4.9% - and up 3.0% from $270,000 last month

10,466 is the largest unit sales count we have ever measured for a calendar month. The previous record high was 10,345 which was set in June 2011 at the height of the REO feeding frenzy.

Dollar volume for May was $3.647 billion. The previous high was $3.354 billion which was set in May last year. The previous high was $3.245 billion set in June 2005 at the height of the real estate bubble.

These were not the only new records. The monthly median sales price of $278,000 is a new record high. The annual median sales price is also at a new record high at $265,900.

Average price per sq. ft. is nowhere near setting a new record, because the homes being sold today are much larger than those being sold at the last peak. The monthly average $/SF record is $190.05 set in May 2006.

May 2019 contained 22 working days, the same as May 2018 and April 2019, so no mental adjustments need to be made to these numbers to account for any difference in working days.

Supply is still higher than last year, but it is dropping faster than it did at this point a year ago. New listings are arriving at roughly the same rate as 2018 so the reason supply is falling is that homes are going under contract faster than last year.

May is usually the strongest month in each year, so we can expect monthly volumes to decline for the rest of 2019. We are also reaching the point where prices go a little soft for 3 or 4 months. This is mostly caused by the mix of homes sold because the high end is much weaker during the 100 degree weather. Wealthy people can afford to be somewhere other than Phoenix during the Summer.

It is unlikely that anyone would have predicted a May like this back in January. June looks pretty good too, but it has almost no chance of beating May. June 2019 starts and ends with a weekend and has only 20 working days, so we should expect a 9% fall in sales and dollar volume during June compared with May. It also starts with 4.2% fewer homes under contract. Set your expectations accordingly.

If you or anyone you know is looking to make a move, Please let me know!

Buying | Selling | Investing

480-773-5792

www.Sell4Free-AZ.com 

Saving You Thousands!

Saving You Thousands!

(Previous Months Market Updates Below:)

May Market Update

April Market Update

March Market Update

February Market Update

January Market Update

Information provided courtesy The Cromford Report.
Posted in Market Updates
Dec. 7, 2019

May Market Update

May 2019 ~ Market Update

Starting with the basic ARMLS numbers for May 1, 2019 and comparing them with May 1, 2018 for all areas & types:

  • Active Listings (excluding UCB): 17,513 versus 16,329 last year - up 7.3% - but down 6.1% from 18,650 last month
  • Active Listings (including UCB): 23,650 versus 21,440 last year - up 5.6% - but down 3.2% compared with 23,399 last month
  • Pending Listings: 7,326 versus 7,393 last year - down 0.9% - but up 5.3% from 6,958 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 12,463 versus 12,504 last year - down 0.3% - but up 6.5% from 11,707 last month
  • Monthly Sales: 9,676 versus 9,185 last year - up 5.3% - and up 13.9% from 8,496 last month
  • Monthly Average Sales Price per Sq. Ft.: $171.80 versus $162.84 last year - up 5.5% - but down 0.1% from $172.04 last month
  • Monthly Median Sales Price: $270,000 versus $255,000 last year - up 5.9% - and up 1.5% from $266,000 last month

Last month we saw strong growth in listings under contract. This month we see strong growth in closed listings. This is why listings under contract is such an important number - it gives us early warnings of a change in the market. On this occasion the change is strongly positive for sellers. Sales are not only recovering, they actually exceeded April 2018 by 5.3%. Now those in the know are aware that April 2019 had a 4.8% advantage over April 2018, because it contained 1 additional working day. Many people tend to forget how significant the number of working days can be in retarding or advancing sales counts. But even allowing for that unfair advantage, April returned higher sales per day than April 2018. In fact April 2019 was the strongest month since 2005 for unit sales.

Currently the listings under contract count is almost the same as last year, so we should expect closed sales in May 2019 to be similar to May 2018. Both have 22 working days so this will be a fair fight.

New listings have been flowing a little more freely since March - we know sellers get encouraged by lower interest rates as well as buyers. However the new higher level of demand is making short work of the extra supply and active listings without a contract dropped over 6% during April. Supply is higher than last year, but it is falling more quickly than it did in 2018.

As we predicted, prices are rising, but at a slower pace than in 2018. The median sales price was up 5.9% compared with a year ago, while the average $/SF was up 5.5%.

Buyers waiting because they thought prices would fall have been left in the dust. The market continues to strengthen and the likelihood of falling prices in the near term is minimal. We have extremely low levels of distress, chronic low supply and the best buyers can hope for is that the appreciation rate will trend lower. We think that is a reasonable expectation, but it it shows no sign of turning negative. It would take a very different set of numbers from the ones above for that to be a possibility.

All in all, the market is more vibrant now than almost anyone expected it to be. This is good news for sellers, agents, title companies, lenders and developers. If interest rates start to rise again then we may see another mild slowdown, like we experience from September 2018 to February 2019, but at the moment the market engine is firing on all cylinders once more.

If you or anyone you know is looking to make a move, Please let me know!

Buying | Selling | Investing

480-773-5792

www.Sell4Free-AZ.com 

Saving You Thousands!

Saving You Thousands!

(Previous Months Market Updates Below:)

April Market Update

March Market Update

February Market Update

January Market Update

 

Information provided by The Cromford Report

 

Posted in Market Updates
Dec. 7, 2019

April Market Update

April 2019 ~ Mkt Update

Starting with the basic ARMLS numbers for April 1, 2019 and comparing them with April 1, 2018 for all areas & types:

  • Active Listings (excluding UCB): 18,650 versus 16,972 last year - up 9.9% - but down 1.6% from 18,959 last month
  • Active Listings (including UCB): 23,399 versus 21,829 last year - up 7.2% - and up 0.9% compared with 23,197 last month
  • Pending Listings: 6,958 versus 7,128 last year - down 2.4% - but up 13.7% from 6,119 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 11,707 versus 11,985 last year - down 2.3% - but up 13.0% from 10,357 last month
  • Monthly Sales: 8,487 versus 9,645 last year - down 12.0% - but up 30.0% from 6,526 last month
  • Monthly Average Sales Price per Sq. Ft.: $171.87 versus $161.44 last year - up 6.5% - and up 1.9% from $168.62 last month
  • Monthly Median Sales Price: $266,000 versus $254,283 last year - up 4.6% - and up 0.8% from $264,000 last month

The housing market across Greater Phoenix improved significantly during March but has yet to catch up with 2018.

Supply without a contract is up almost 10% from a year ago. However it is down 1.6% from last month and new listings were lower in March 2019 than in March 2018 or 2017. Supply has been chronically low for many years and very little has changed in that department.

What we experienced starting in September 2018 was a minor but noticeable drop in demand. That declining trend is now being replaced by growth in demand. As usual we see this in pending listings and UCB listings before it shows up in closed listings. Under contract listings are only 2.3% lower than this time last year. At the start of March they were 11.5% lower. If this improvement keeps up then under contract listing counts could even overtake 2018 during April. We will have to wait and see.

Closings run well behind contracts and have not caught up with 2018 rates yet, but they are improving, March was up 30% from February. We should also mention that March 2019 had 1 fewer working days than March 2018 so 5% of the 12% gap can explained by that fact alone, leaving a 7% deficit. In February there was an 8% deficit. Because of the surge in contract activity we expect the gap to close further in April.

With demand comfortably exceeding supply, prices continue to rise, though not as quickly as they did this time last year.

Almost all the gloomy statements you may have seen about the Phoenix housing market outside the Cromford Report have proven to to be wildly overblown. It is in good shape and, thanks to lower interest rates and higher loan limits, we are seeing demand headed back to normal.

If you or anyone you know is looking to make a move, Please let me know!

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(Previous Months Market Updates Below:)

March Market Update

February Market Update

January Market Update

 

Information provided by The Cromford Report

 

Posted in Market Updates