Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings and more! That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Nov. 27, 2018

November Numbers are In

New Listings Up 18% in October between $250K-$400K
The 4th Quarter is Seasonally the Best Time to be a Buyer

For Buyers:

Seasonally the 4th Quarter is the best time to be a buyer and this year is no exception. Typically buyer contract activity is at its strongest from March through May and weakest between November and January. Buyers who were outbid by competing offers last Spring will have a different experience now. October saw 18% more new listings hit the market between $250K-$400K but a 12% drop in buyer contracts which caused overall supply to rise another 11%. The market is still a seller's market, but more seller competition for fewer buyers translates into more price reductions and seller concessions until the Spring "Buyer Season" is upon us once again. 

For Sellers:

The market may be softening between $200K-$400K (which accounts for over 56% of MLS sales), but that doesn't mean sellers are getting a raw deal. Monthly average sale prices per square foot in this price range have appreciated 5% since October last year and nearly 19% in the last 5 years. Under $200K, the appreciation rate is 9.5% in the past year and 44% in 5 years. $400K-$800K has appreciated 6% in the last year and 14% in 5 years and the annual average sale price per square foot* over $800K has appreciated 3% in the last year and 10.5% in 5 years. What's happening underneath that contract price, however, is an increased cost to sell at "top dollar". That cost can take the shape of longer days on market with multiple price reductions, repairs, needed upgrades to the home prior to list and closing cost assistance. 

*Annual averages are used in the higher price ranges to mitigate the sharp price fluctuations that affect this market. 

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

Posted in Market Updates
Oct. 24, 2018

October Numbers Are In

Seller Concessions Spike on Listings Sold between $200K-$250K

Price Reductions up 27% on Active Listings Between $250K-$400K

 

For Buyers:

October marks the 4th month in a row that supply has continued to rise between $200K - $400K, which is good news for many buyers as it provides them with more choice and fewer competing offers. However, for those buyers with budgets under $200K, this trend in supply doesn't apply to them and their choices are still extremely limited. Last January, inventory under $200K made up 18% of all active listings. Within that price range, single-family homes made up 50%, condos and townhomes 30%, and mobile homes 20%. As of this month, inventory under $200K only makes up 12% of actives and has declined 36% since January. Single-family homes make up 45%, condos and townhomes 36%, and mobiles homes 19%. This drop in supply equates to 591 fewer single-family homes, 198 fewer condos and townhomes, and 229 fewer mobile homes available for sale under $200K since the beginning of 2018. 

For Sellers:

When supply rises, sellers react in a number of ways to compete with one another for the existing buyer pool. One option is a price reduction on their active listing prior to contract. This does not necessarily result in a decline in sale price, only a decline in sellers' expectations for appreciation. Sales price trends may still continue to rise, but perhaps only at 5% instead of 8%, for example. Another option is to agree to a concession, such as paying a portion of closing costs or a home warranty; and finally to agree to a much lower sale price than what they were asking. Typically sellers agree to the first two options before submitting to a "low ball" contract, which is why sales price trends are the last measures to respond to a shift in supply and demand. With that being said, weekly price reductions this month between $250K-$400K are up 27% compared to last year, while price reductions between $200K-$250K are only up 1.7%. However, seller concessions on sales between $200K-$250K reached 41% so far this month compared to last quarter's measure of 36%. Only 21% of sales between $250K-$400K recorded a seller concession. Which leads us to conclude that sellers below $250K are agreeing to more concessions than price reductions; while sellers over $250K are submitting to more price reductions. Despite this slight weakening in sellers' advantage, Greater Phoenix is not close to a balanced or buyer's market so expect overall prices to continue rising over the next 3-6 months. 

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

Posted in Market Updates
Oct. 1, 2018

September Numbers are in!

Supply Continues to Rise in the Middle

Seller Price Reductions up 46% and 61% in these Price Ranges

 

For Buyers:

Overall supply is down 9.6% compared to last September. At first glance that's nothing new. However, for those of you who pay close attention to our monthly infographic (I know you're out there), you have no doubt noticed that last May supply was down 15.5%, June supply was down 12.2%, July was down 11.1% and August was down 9.9% from last August. What this means for buyers is that the Greater Phoenix market is still in short supply, but it's subtly becoming less bad. Most significantly, supply continues to increase between $200k-$400k. Last month we reported an 8.1% increase in listings between $200k-$250k since May, that is now 9.7%. Between $250k-$300k, supply has risen 15% in only 8 weeks. Between $300k-$400k, supply has slowly risen 10% since January. All other price ranges are either declining in supply or following their normal seasonal trends. This is great news for buyers; more choice in the marketplace means less negotiating pressure. However, don't expect sale prices to plummet anytime soon. The first price to respond to a supply shift isn't a sale price, it's a list price in the form of a price reduction.

 

For Sellers:

Despite the increase in supply between $200k-$250k, there hasn't been a correlating increase in weekly list price reductions from sellers yet. However that is not the case for the market between $250k-$300k where weekly list price reductions have risen 46% in the past 8 weeks and weekly reductions between $300k-$400k have risen 61% since January. This isn't an indicator that sellers are becoming desperate. Make no mistake, there are very few desperate sellers in this marketplace. There are, however, many optimistic sellers who may be taming their expectations. Average annual price appreciation per square foot remains between 3.5%-5.0% for sales between $200k-$400k, so it's still a seller's market despite recent developments. Expect prices to continue increasing at least through the remainder of 2018. 

 

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

Posted in Market Updates
Aug. 30, 2018

August Numbers are In!

Supply Between $200-$250k has Risen 8.1% since May
Seller Price Reductions Up 7% in Popular Price Range

For Buyers:

If your budget lies somewhere between $200,000 and $400,000 for a home, there's good news for you. Supply between $200,000 and $250,000 has been rising gradually over the past 12 weeks. After dropping 15% from 2,300 listings in January to 1,944 in May, it has since risen 8.1% to 2,101 listings in August, placing it only 6.7% below last year's count instead of 18% below like it was 3-4 months ago. Listings between $250,000 and $400,000 have also risen sharply 5.3% from 4,791 to 5,044 over the past 4 weeks, placing them only 0.2% below last year's count of 5,053 listings. The increase in competition has resulted in a notable 7.3% increase in weekly seller price reductions from an average of 778 per week in June to 835 in July. 56% of year-to-date sales in Greater Phoenix have been between $200k-$400k so this increase in supply should come as a little bit of relief for the majority of buyers. 

For Sellers:

If you have a home listed between $200,000 and $400,000, then you make up 48% of everything that's listed in the MLS. Listings under contract in this price range have averaged 7.4% higher in volume than 2017 all year, until now. Over the last two weeks, including the end of July through the first week in August, listings in escrow have dropped to 2.2% below last year's level. Buyer activity is expected to slow seasonally from the peak in April through the end of the year; however open contracts have dropped 26% since the 2018 April peak compared to a lower 20% drop in 2017 over the same time frame; all while corresponding supply has been rising. Sellers haven't seemed to notice this sharper decline as their average asking price per square foot has soared from just 3% higher than last year in March to as high as 7% higher in July. The average sales price per square foot was up 5.9% in July, compared to 4.6% in June. However, price is a lagging responder to shifts in supply and demand. We will have to wait and see if buyers accommodate sellers' price expectations given that they have more to choose from in the marketplace right now. 

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

 

 

Posted in Market Updates
June 28, 2018

June Numbers are In!

Is Greater Phoenix "Overvalued"?

Mortgage Payments are Lower Than They Were 13 Years Ago

For Buyers:

Interest rates have been increasing along with the inflation rate as of late, which has spawned a string of headlines about affordability. While the rate hike has knocked some buyers out of the market without a doubt, general affordability hasn't taken a big hit yet. According to the National Association of Home Builders and Wells Fargo, buyers making the median family income could still afford 65% of what sold in the Valley last quarter. A measure between 60-75% is considered normal. 

Let's look at the historical cost of a 1,900sqft home in Greater Phoenix, for example. In March 2005, a home that size would run $281k on average. Today that same home would be $309k, $28,000 more (+10%). However, the interest rate back then was 5.9% compared to 4.5% today, meaning that the principal and interest payment has dropped nearly $100 from where it was 13 years ago for the same home. At the same time, the median family income rose from $58k to $69k according to HUD (+19%). Which is why despite recent increases in interest rates, the affordability of real estate in the Valley is still considered good. 

For Sellers:

Last April Corelogic released a report ranking the Greater Phoenix area as "overvalued". In fact, they placed 37% of our nations top 100 metropolitan areas in that category. As of May, after 6 years of higher-than-normal appreciation rates, the monthly average sales price per square foot has finally reached its place along the long-term 3% appreciation line established between 2000-2003 before the 3005 bubble and 2008 crash. Meaning that if we had fallen asleep in 2003, and the last 15 years were just a long horrible dream, we would have woken up today and not known anything had happened. Prices are where they would have been had the market followed the average long-term rate of inflation. That brings to light that current appreciation rates of 6% or more are no longer sustainable in the long term. However, that doesn't mean that prices will "peak" or "crash" anytime soon. most likely as demand slowly wanes, prices will go flat and hang out until they once again fall in line with the rate of inflation, but don't expect that to happen in 2018. Supply and demand measures today indicate another 3-6 months of positive appreciation for the majority of homes priced below $400k. 

Commentary written by Tina Tamboer, Senior Housing Analyst with the Cromford Report
©2018 Cromford Associates LLC and Tamboer Consulting LLC

 

Posted in Market Updates
June 19, 2018

The Giving Group AZ

We are so proud to be a part of the Giving Group AZ! This a group of 100 friends dedicated to making contributions to four selected non-profits each year! You can find out more about our group and how to get involved here.

Today we presented the check to The Joy Bus! The mission of The Joy Bus is to relieve the daily struggles of homebound cancer patients with a fresh Chef Inspired meal and a friendly face. Their vision is to elevate the livelihood of their patrons with the joy of culinary sustenance. The Joy Bus Diner was opened here in Phoenix and is a 100% non-profit restaurant that is run by all volunteers. They provide hearty breakfast and lunch fare. Learn more about their story and how to get involved here. 

Posted in Valuable Articles
June 13, 2018

Sizzlin' Summer Deal

Economists have forecast that 800,000 people will leave California and New York for more affordable states like Arizona. Real estate values in Arizona are at an all time HIGH, but the inventory of available homes is at an all-time LOW. We are looking for homeowners that are ready to sell! Take advantage of our SIZZLIN' SUMMER DEAL...a full service 4.5% listing...now through August. Despite the heat, we are putting several homes under contract per week!! Call 602-363-9927 to set up a personal in-home consultation today! 

Posted in Offers
June 6, 2018

May Numbers are In!

Supply between $175K-$200K dropped 18% in 3 Weeks 

Summer is a good time to List Luxury Properties over $500K 

For Buyers: 

Supply under $200K has continued to drop rapidly, but the $175K-$200K range has accelerated its decline over the past month far more dramatically than any other price range. After being consistently 30-35% below last year, the active supply level dropped a whopping 18% in a 3-week period putting the current count for this group 44% below last year. Single family homes only make up 41% of active listings under $200K, but they account for 69% of actives between $175K-$200K. As more buyers are looking to condos and townhouses for affordable housing, supply for attached homes under $200K has dropped 33% over the last year. However, condo supply between $200K-$300K has actually risen 10% while single-family homes in the same price point have dropped 15%. 

 

For Sellers: 

We are officially at the peak of the market seasonally for listings in escrow. Over the next few weeks, especially as temperatures reach over 100 degrees in the Valley, expect to see a gradual decline in buyer contracts that will continue through the end of the year. This is a seasonal trend that consistently happens every year and in every price point, even the frenzy market under $200K. The one exception is the luxury market over $500K. While it’s typical to see a decline at the beginning of Summer like everyone else, escrow counts tend to drop for a couple months and then go flat until the end of the year. In fact, luxury supply drops more than buyer activity does in the Summer making it a great time to list luxury property for those willing to brave the heat between June and September. 

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report 

©2018 Cromford Associates LLC and Tamboer Consulting LLC 

Posted in Market Updates
April 6, 2018

Just Listed in Lone Mountain!

http://6217ecalleescuda.relahq.com

 

Welcome to the gated community of Lone Mountain, just west of Scottsdale Road. This 3 bedroom, 2.5 bath home features a den that can easily be converted to a spacious fourth bedroom. An open concept with lots of windows highlight the desert views and north/south exposure of this premium lot. Swim year round in the heated pool...relax under the covered patio by the fireplace or at the ramada with built in BBQ. Superior landscaping and lighting has all been done for you. Inside you will enjoy the spacious living area, chef's kitchen and formal dining room. The private master suite boasts a walk-in closet that you won't believe! The lot size, location and interior/exterior upgrades of this home make it an incredible value. 

 

Posted in Listings
April 4, 2018

Not Owning Your Home can Cost you A Lot of Money

 Click Here to see Article

Let's get real. Renting is easy. It feels comfortable to rent when you know you can easily call the landlord to fix the A/C, the garbage disposal or the refrigerator. There's no permanence to it. The fears associated with buying bring out thoughts such as "we would never qualify," or "there's no way we could afford it". 

Let me just stop those thoughts right there. Read the article above and see how NOT owning a home is actually costing you money in the long run. Start paying yourself instead of someone else! 

 

Posted in Market Updates