By Mike Bodeen · 4 January 2021
Our first Snapshot of the year for 2021, but the same ole story is being played out as in previous years, only this year, it’s on steroids.
One year ago, the esteemed Cromford Report, (our primary source for our accurate data), reported that the lack of homes for sale (supply) was “shocking!” As in shockingly low for you newbie readers.
So now what do we about this market today? Our current supply of homes for sale is 50.1% less than last year. No adjectives left for buyers but desperate?
Here are the stats as of January 3rd for the month of December.
Active Listings: 6,055 vs 12,141 last year – down 50.1% – and down 18.0% from 7,388 last month
Under Contract Listings: 9,868 vs 7,539 last year – up 30.9% – but down 20.7% from 12,440 last month
Monthly Sales: 9,989 vs 7,788 last year – up 28.3% – and up 8.9% from 9,175 last month
Monthly Average Sales Price per Sq. Ft: $211.62 vs $179.97 last year – up 17.6% – and up 1.8% from $207.84 last month
Monthly Median Sales Price: $332,000 versus $289,500 last year – up 14.7% – and up 0.6% from $330,000 last month
There was only a 1.4% increase in listings last year compared with 2019, but there was an annual rate of sales increase by 6%. So much for the extra inventory.
Because of the massive disparity between supply and demand, prices per square foot rose almost 18% in one year, while the monthly median sales price rose to $332,000 – a 14.7% acceleration.
And it’s not going to improve for buyers anytime soon, because sales prices lag behind leading indicators, such as current supply, demand, pending sales, etc., The Cromford Report reported today that this lag period could be “up to 15 months. We can therefore expect to see prices move even higher during the next 12-15 months with appreciation rates over 20%.”
“And if a global pandemic only worsened buyers’ situations then what?”
The Report also mentioned that any buyers who are thinking there could be an extra supply of inventory coming on the market when foreclosures are once again permitted, sans Covid 19, have “wishful thinking.” The reason why that’s probably a non-starter is because there’s been so much appreciation, most all owners have equity in their home which if they had to sell, they could do so and probably have some equity over and above their loan amount.
Further, Cromford stated, that “in 2007 prices started to crumble due to huge excess supply, meaning many homes went underwater quickly and homeowners could see no advantage from avoiding foreclosure. The current situation is opposite, not similar.
Historically, January has had the largest amounts of homes coming on the market. If there’s not a significant number of homes become available, then our market for buyers will worsen this year until something else threatens to derail the continued uprising of real estate values in Phoenix, Arizona. And if a global pandemic only worsened buyers’ situation, then what?
Buyers, that leaves four weeks to look, decide, offer and buy.
Market data referenced in this article comes from The Cromford Report.