By Mike Bodeen · 18 December 2017
We’re winding down the 2017 Phoenix Metro residential real estate market, which should go down as the 6th consecutive year of a stellar and balanced market, not seen — ever! Well, ‘ever’ is a long time, but not since 1994 when I started selling homes in the Valley. And having heard from many old timers, I’m intelligently guessing we’d be going back decades before that.
The point is this: The Phoenix area residential real estate market which survived the “great 5 year crash” of 2006-2011, albeit with scars, is still in the midst of a blessed run of healthy housing numbers. In the next few weeks, we’ll review a compilation of local and national real estate experts’ prognostications, plus add our own projections for what to look for in the coming new year. Today is a strong exhortation that may give you a clue of where we’re going.
Buyers be ready! If you’ve experienced first hand or have heard about our local home listing shortage, 2018 will be worse – at least in the sub $500,000 market! And Phoenix is not alone. This is a larger national problem as well. And whether a massive income tax bill passes this year or not, listings will remain scarce and I believe even increase in scarcity.
Current Average Days on Market by Price Range
As of December 9th, 2017
Under $200,000 = 35 Days on Market
$200,000 to $300,000 = 50 Days on Market
$300,000 to $500,000 = 86 Days on Market
$500,000 to $600,000 = 126 Days on Market
$600,000 to $800,000 = 162 Days on Market
$800,000 to $1 Million = 220 Days on Market
$1 Million to $2Million = 365 Days on Market
$2 Million Plus = 668 Days on Market
So, we say, be ready. Annual stats bear out the fact that the greatest number of listings to come on the market do so at the first of the year. Inventory peaks in February and bottoms out in July and remains lower through the holidays. Get your mortgage pre-approved with an excellent lender.
Buyer Beware! I add this caution, because the economy is already heating up and there hasn’t even been a tax code change yet. In a news release today, Reuters reported:
The regional central bank’s “Nowcast” model calculated the economy was expanding at an annualized pace of 3.98 percent in the fourth quarter, quicker than the 3.92 percent rate calculated a week ago. The New York Fed said its latest tracking estimate on GDP growth for the first three months of next year was 3.15 percent, compared with 3.12 percent from last week.
Why is this significant? It’s very significant that if we sustain 3% GDP and head higher to 4%, the Fed, which has already begun new rate increases, will no doubt increase them more and more quickly. This will shoot up mortgage rates, which are already forecast by a number of experts to rise to the mid to high 4% range this year. If we have near 4% GDP, Katie, bar the door!
Summation: Buyer get going!
Once again, thank you to Michael Orr of the Cromford Report for their amazing numbers provided us.
Merry Christmas!
– Mike
Market data referenced in this article comes from The Cromford Report.