January 2018 Phoenix Market Update: 2017 MLS Sales up 6% over 2016

Phoenix Real Estate Market Update January 2018

2017 MLS Sales up 6% over 2016
Over 50% of 2017 Sales Were in this Price Range….

For Buyers:
2018 is not going to be any less competitive for buyers in general. The market is starting out with 14% fewer listings compared to 2017, however there are 35% fewer listings under $200K, a price range that commands 34% market share of all MLS resales in Greater Phoenix. 51% of MLS sales were between $200K-$400K in 2017, and supply in this range is down just 7%. 14% of sales were between $400-$1M and supply is down nearly 9%. Only the market over $1M is starting 2018 with 4% more for sale, 2017 sales over $1M were less than 2% of the market.

For Sellers:
Over 51% of newly constructed condominiums, townhomes and single family residences sold in 2017 were between $275K-$500K as of November and approved single family permits are up nearly 12% going into 2018. Added inventory from new construction continues to keep mid-range property appreciation at sustainable levels at the current level of demand. The last wave of boomerang buyers are expected to rejoin the masses in home ownership this year after waiting 7 long years to qualify for conventional financing after foreclosure. These buyers span all price ranges and their return combined with positive inbound relocation and employment keep Greater Phoenix a positive environment for sellers.

Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report
©2018 Cromford Associates LLC and Tamboer Consulting LLC

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December 2017 Phoenix Market Update: Greater Phoenix Appreciation 62% Overall

Phoenix Real Estate Market December 2017

23% of Listings Under $200K Sell Over List Price
Greater Phoenix Appreciation 6.2% Overall, But Varies

For Buyers:
There are currently 1,399 normal* single family listings between $100K-$200K in Greater Phoenix and supply levels are not expected to rise in this price range going into 2018. In the last half of 2017, an average of 1,396 normal single family new listings were added each month while 1,375 per month were sold in this price range. In November, 23% sold over list price compared to 27% last June and 28% closed with full price offers compared to 28% in June.
*A normal listing is one that is not a short sale or foreclosure.

For Sellers:
The overall appreciation rate based on annual sale price per square foot in Greater Phoenix is 6.2%. However, supply and demand are not the same by price range. The greatest appreciation rates are under $200K due to a lack of new construction that would typically balance out the supply shortage. Sales under $200K are 33% of all sales this year, so their rate has a large effect on the overall average. New multi-family and single family homes are being added to the $200K-$500K price range to accommodate increased demand, but it’s still not quite enough. The market is balanced between $500K-$1M, while supply is still higher than demand over $1M despite a 10% rise in 4th quarter contracts. As a result, appreciation rates are as follows by price range:
• Under $200K: 7.7%
• $200K-$500K: 3.5%
• $500K-$1M: 1.7%
• Over $1M: 0.1%

Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report
©2017 Cromford Associates LLC and Tamboer Consulting LLC

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November 2017 Phoenix Market Update: 4th Quarter is Good for Buyers!

Phoenix Real Estate Market Update November 2017

4th Quarter is Good for Buyers!
Supply up 11% since August, Down 12% from 2016

For Buyers:
The 4th quarter is a good time to be a buyer seasonally. After April or May, buyer activity gradually declines every month with the 4th quarter seeing the lowest level of contracts in escrow. This is typical within all price ranges. Meanwhile, supply levels tend to rally with new listings in October after a stale Summer. This provides the remaining buyers with more listings to choose from and fewer competing offers. A welcome relief for many, however this seasonal lull doesn’t mean buyers will win with low offers. For most buyers, this environment only provides fewer competitors for their preferred properties. It doesn’t necessarily mean they will get a bargain.

For Sellers:
While 2017 is still outperforming the last 5 years in sales volume, contracts in escrow have declined 30% since peaking in April. Supply is up 11% after hitting a low in August, bringing current listing counts within 1% of where they were in April. While seasonal and expected, this creates a more competitive environment for sellers compared to the Spring season. As a result, the number of price reductions counted every week has gone up 20% since the beginning of September. Expect price reductions to remain high as sellers push to get their properties under contract before Thanksgiving.

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Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report
©2017 Cromford Associates LLC and Tamboer Consulting LLC

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October 2017 Phoenix Market Update: High End Sales Over $600k Up 27%

Phoenix Real Estate Market October 2017

3rd Quarter MLS Sales Up Only 2% Over 2016
High End MLS Sales Over $600K Up 27%

For Buyers:
The median home size sold through the MLS this year is 1,774 square feet. Interestingly, this measure has not fluctuated more than a couple square feet up or down since 2015. Considering the increasing cost per square foot, the fact that the median sized home sold has not fluctuated much means that buyers are willing to pay more for the right sized home if they have the choice. For buyers with less flexibility on price, the cost of waiting comes in the form of sacrificing extra closet space, work space, or even a bedroom. Last year, the median home size for buyers in the $150K-$175K price range was 1,470sf. This year it’s only 1,380sf, a difference of 90 square feet.

For Sellers:
The first half of 2017 was more exciting than the second half is turning out to be so far for MLS sales. 1st Quarter 2017 MLS sales outperformed 2016 by 14% and 2nd Quarter sales were up 7%, so a 2% growth rate for the 3rd Quarter puts a damper on our excitement. Low supply in the lower price ranges is mostly to blame as it’s difficult to have record sales growth if there are fewer people willing to sell their home. There are more people willing to put their home on the market in the higher price ranges however. New listings over $600K were up nearly 10% in the 3rd Quarter and sales were up an impressive 27%.

Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report
©2017 Cromford Associates LLC and Tamboer Consulting LLC

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September 2017 Market Update: Has the Phoenix Real Estate Market Recovered?

Phoenix Real Estate Market Housing Update September 2017

Active Listings Between $150K-$175K rise 17% since June
Has the Phoenix Real Estate Market Recovered?

For Buyers:
Supply between $150K-$200k continued rising in August.  However the $150K-$175K range had a more dramatic rise.  While still 26% below last year, it rose 17% since the beginning of June, a strong departure from the weekly decline this market experienced in the first half of 2017.  For buyers in the rest of the market over $200K, nearly all price ranges are running lower than last year with the exception of the top tiers.  For those buyers who have seen every listing available and still haven’t found a match, late September usually sees an increase in new listings across the board.  This makes the 4th quarter a good time to be a buyer.

For Sellers:

When do we know the Phoenix residential real estate market has “recovered”?  Many people assume when prices have returned to 2006 peak levels then the market has recovered.  However understandable, especially for those who purchased during that time frame, that’s not necessarily the case.  Average sale prices per square foot are still 27% away from the peak of 2006.  However, the market could arguably be considered recovered once prices reach the range that corresponds to the long term average rate of inflation, which from 2000-2016 in the United States is 2%.  In 2000, the average sales price per square foot for MLS resales was $96. Had the bubble and crash never happened, and annual appreciation stayed between 2-3% per year as normal, then prices would land between $134-$158 per square foot today.  Currently they’re running at $149, which equates to averaging nearly 2.6% annually and a 55% total gain since the year 2000. .

Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report
©2017 Cromford Associates LLC and Tamboer Consulting LLC

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