By Mike Bodeen · 9 August 2021
Buyer good news continues, albeit gradually. The big 5 sales stats we look at monthly are listed below. The numbers continue to move in a positive direction for buyers. Though active listings are down 10% from last year, they are UP 24% versus last month. Under contract listings are down 3% from last month, therefore, sales are slowing and inventory’s growing.
Here’s the big 5:
Active Listings: 7,105 vs 8,477 last year – down 16% – up 24% vs 5,699 last month
Under Contract Listings: 11,044 vs 12,332 last year – down 10% – and down 3% vs 11,378 last month
Monthly Sales: 9,131 vs 10,544 last year – down 13% – and down 10% vs 10,179 last month
Monthly Average Sales Price per Sq. Ft: $251 versus $191 last year – up 31% – down 0.5% from $252 last month
Monthly Median Sales Price: $400,000 versus $315,000 last year – up 27% – and up 0.8% from $397,000 last month
As we’ve shared often in the past, the Phoenix Metro residential real estate market is blessed to have the Cromford Associates data team, in which The Bodeen Team subscribes, provide us with an inexhaustible supply of information for the benefit of our clients.
“I still read articles describing demand as exceptionally strong. This is absurd.”
The 30,000 foot picture however needs to be re-stated, that we are entering a window of time where the market may (emphasis “may”) enable sideline buyers to enter, or re-enter where there is less competition, but not a price drop – at least not anytime soon. In fact, we believe we will still be seeing high price increases for some months based on a still “over-heated” market. After that, a leveling off.
Supply Will Dictate Everything.
August 3rd, per Cromford: “Supply continues to move higher. We would usually consider a 24.7% increase in one month to be an exceptional growth rate. However, we are rising from a very low point and the number of active listings without a contract is still down 75% from what would be considered normal. We are witnessing new listings arrive at a faster rate than we usually see at this time of year, especially those priced between $400,000 and $1 million. This is helping buyers, but there are still far more buyers than homes for sale. I still read articles describing demand as exceptionally strong. This is absurd. Demand is only slightly above normal and has been getting weaker over the last several months. This is obvious both from the pending and under contract counts (down compared with last month and last year). and from the monthly sales counts (down compared with last month and last year). If demand were strong, then all these numbers should be responding to the increase in supply. They are not. The large majority of market commentators have not grasped that demand is not the issue. Interest rates are not the issue either. Everything today is about supply. Even after a rise of almost 25% there is nowhere near enough supply to take the stress out of the market.”
The ongoing challenge of the Phoenix Area market is that much of the current buying public is changing from a healthy rate of owner-occupied buyers, to out of state 2nd home buyers, investors (e.g., fix and flips), buy-to-rent corporate entities, etc. We’ll tackle this latest challenge in a future Market Snapshot.
So keep your eye on the supply. For now, that tells all! We’ll continue to update you each week.
Market data referenced in this article comes from The Cromford Report.