By Mike Bodeen · 3 January 2022
A Mixed Start to a New Year
Happy New Year Everyone!
Here we go!!
We start our first issue of 2022, with the main question: Is there hope for home buyers in 2022 or is it more of the same sad slumping story?
Coming out of the gate, the numbers are mixed. On the positive side for buyers, the number of homes under contract (9,512) in the Phoenix Metro communities is less than last month (11,465) and last year (10,007), meaning demand is down a little bit.
Sales this last month (8,902) are also down compared to last month (8,954) and last year (9,598). Days on the market are increasing. For homes currently listed, the Days on Market are currently at 66, compared to 57 last month, however last year’s were higher at 76.
Mortgage rates have thus far remained very attractive (3.25%) and conventional mortgage loan limits were raised in November to $647,200. FHA Loan limits were likewise raised to $420,680 for Maricopa County.
That’s the good news for buyers.
The most important number we’re looking at for our buyers, however, is the number of listings. Available listings are at their lowest January 2nd level since 2001, when they started keeping track, a mere 5,201. This is compared to the previous January low last year which was 5,536 – a 6% drop. In 2020, the number of listings was 11,593. We thought the number was low then. We consider around 20,000 homes available to be a normal, balanced market in the Valley. 2022 represents a 55% drop in the amount of homes for sale compared to two years ago.
The other hugely important number is appreciation. The average price continues to rise significantly every month. The “average” sales price for monthly sales is $525,000. This is in comparison to $515,000 last month and $430,000 at this time last year.
The median sales price now stands at $425,000 – up $5,000 from last month. The median one year ago was just $331,000. This is a 28% median rise in one year!
We think the appreciation rate will steadily slow in ’22, but honestly buyers, I wouldn’t bet the farm on it. I might not even bet a steak dinner from a steer on that farm.