Market Update for July

Market update for July-
Seems Demand actually is right where it should be in a regular market, the problem we are having is that we have only 8500 Active homes for sale today when this time last year and the year before we had nearly double that.
An equal Supply and Demand market is above 20k homes in our area and it’s been a very long time (5yrs) since we’ve seen that.  That said, in 1.5 months- if we had no new listings, we’d literall RUN OUT OF HOMES FOR SALE!?!
Check out the chart below showing what our market has done the first half of 2020.
If you or someone you know have thought about selling a home – now may be the perfect time; our market index and median price along with the listing success rates are all in the favor of a Seller today bigtime!
One thing about real estate I can say from my 27 year experience is Real Estate is cyclical and timing your moves is critical to your success when investing in real estate.  2020 has proven to be a year that no one could have predicted, however we cannot continue at this rate and we will definitely see a softening of the market- whether due to politics, interest rates, or lowering demand as buyers continue to be frustrated.  The last chart below shows the emotions behind the cycles… I do think as we edge closer to the election this year, we may find ourselves in the unease portion of the curve which could lead to some softening of pricing and may increase the inventory as a result, but ultimately no one has a crystal ball so only time will tell.
Let us know how we can help and if you want an analysis on your own home today- please let us know!


 
Top 5 Cities Selling Over Asking Price
Contracts Accepted in 8 Days or Less Under $400K
For Buyers:
Greater Phoenix has a population of approximately 4.8 million people and 1.4 million single family homes,
condos and townhomes in total inventory. As of July 8th, only 8,579 of these units were available for sale
through the Arizona Regional MLS. If that number doesn’t cause you to gasp, then this might: only 1,023 are
single family homes under $300,000 and that number is diminishing every day.
The last month has seen a surge of buyer activity, but it was not met with an equivalent surge of new listings.
New listings overall compared to last year were down 7.8% while contracts in escrow soared 24% higher. For
buyers under $300K however, new listings were down 22% in June compared to last year and are down 38%
so far in July. This is causing an extreme amount of buyer competition in this price range.
When buyers expand to over $300K, then new home construction starts supplementing inventory and
providing some much needed alternatives. The top 3 cities for single family home permits are Phoenix, Mesa
and Buckeye with notable spikes in building permits issued in Surprise, Maricopa and Queen Creek. Most
new homes are selling between $300K-$500K, but buyers looking for a brand new single family home under
$300K still have some options. Their best bet is in Pinal County or Buckeye with average sizes between 1,800-
2,000 square feet for their budget.
Conversely, new listings over $500K saw a spike last month, up 20% over last year. 1,596 new listing came on
the market and 2,046 contracts were accepted in this price range in June.
For Sellers:
Brace yourselves. Half of the sellers who accepted contracts under $400K in the first week of July were on
the market for just 8 days or less with their agent prior to contract acceptance. Sellers who took contracts
between $400K-$600K had a median of 14 days on the market with their agent and those who landed contracts between $600K-$1M had a median of 41 days. It’s a good time to be a seller.
While 28% of all sales in July so far have closed over asking price, that percentage peaks at 41% for those between $200K-$300K. Top cities for closings over asking price are Tolleson, Avondale, Glendale, Gilbert and
Youngtown. Gilbert is the only city in that list with a median sale price over $300K.
Seller-assisted closing costs remain popular and were involved in 23% of all sales in the first week of July.
That percentage increases to 33% on transactions closed between $150K-$300K. Top areas where 50%-60%
of sales involved seller accepted closing cost assistance were Youngtown, West Phoenix, Aguila, Glendale,
and Tolleson.
This supports the theory that sellers receiving offers over asking price in the West Valley and other affordable
areas are still open to accepting closing cost assistance if a contract meets their most important needs.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2020 Cromford Associates LLC and Tamboer Consulting LLC