By Mike Bodeen · 29 November 2021
Some signs we observe can help us determine the direction of the Phoenix Metro residential sales market.
For example, in January 2008, only 8% of all sales closed “above” list price – a 20 year low. In June of 2021, 60% of all sales closed above list price – a Phoenix record. So, what direction is the market moving currently? Trending slightly downward to 45%. That’s still a lot.
Another look: March 18th. The average closed price per square foot (PSF) on this March date rose above 100% of the average sales price for the first time. For over 8 months this seller’s market stayed above the 100% level, but on November 11th it slipped to 99.99%, and now it’s dropped to 99.92%. Based on this, the market could be said to be trending downward.
The long term average sales price to list price PSF is 97.25%. Statistically, per the Cromford Report, prices tend to rise when this PSF is above 97%. So the moral of this story is that prices could very well continue to rise, even though there are signs that the market will be creeping downward, but not dropping like lead, whatever that means.
What we’re still encountering on the street is multiple offers, especially in the low to moderate price ranges (up to $600k). These usually result in prices exceeding the list price.
On Friday the stock market suffered its largest loss of the year mainly because of the revelation of the Omicron coronavirus variant emerging in S. Africa and other countries. Will this new variant put us back to the same place we were 18 months ago, and what happened then to real estate in the country? It took off! Everywhere!! Especially in Phoenix.
Will we see a repeat of this? The Lord knows.
Market data referenced in this article comes from The Cromford Report.