By Mike Bodeen · 4 July 2016
Well, it was probably a safe bet that ex-President Clinton (aka Bubba) and Attorney General Loretta Lynch were not discussing Arizona’s real estate bubble (run up in home values just before it pops) while they met on Sky Harbor’s tarmac one week ago. One reason being, there isn’t one. Another reason being, they both have bigger fish to fry or catch and release.
The numbers are in for the first half of the year which we will be analyzing shortly in our mid-year report which is snail-mailed quarterly to clients and friends. If you’re reading this but not getting your hard copy monthly, you’re not on our mailing list. You can change that by supplying us with a mailing address.
In our current market, a number of cities are seeing a decline in the average listing price per square foot (psf). According to Michael Orr of the Cromford report, we often see a third quarter drop in psf which starts in June. Looking at the 12 major cities the following changes are over the past 120 days:
1. Avondale – up 2.8% from $103.18 to $106.02
2. Chandler – up 2.0% from $155.30 to $158.36
3. Gilbert – up 0.8% from $145.91 to $147.02
4. Queen Creek – up 0.6% from $118.14 to $118.79
5. Goodyear – up 0.4% from $128.32 to $128.88
6. Peoria – up 0.3% from $145.12 to $145.49
7. Tempe – down 0.1% from $176.80 to $176.71
8. Glendale – down 0.2% from $133.74 to $133.49
9. Mesa – down 0.6% from $149.27 to $148.33
10. Phoenix – down 0.7% from $184.35 to $182.99
11. Scottsdale – down 3.1% from $317.83 to $307.93
12. Surprise – down 3.8% from $124.25 to $119.49
Buyers often ask us the question, “How much off the listing price does the seller on average come down?” Over the past 12 months the average percentage of “final” list price achieved by closed escrows are listed below:
1. Tolleson – 99.34%
2. El Mirage – 98.95%
3. Avondale – 98.83%
4. Laveen – 98.67%
5. Waddell – 98.56%
6. Queen Creek – 98.43%
7. Buckeye – 98.35%
8. Surprise – 98.30%
9. Youngtown – 98.29%
10. Glendale – 98.26%
11. Apache Junction – 98.25%
12. Gilbert – 98.23%
13. Goodyear – 98.11%
14. Maricopa – 98.09%
15. Peoria – 98.03%
16. Litchfield Park – 97.97%
17. Mesa – 97.95%
18. Chandler – 97.92%
19. Tempe – 97.81%
20. Anthem – 97.77%
21. Florence – 97.71%
22. Wittmann – 97.66%
23. Desert Hills – 97.66%
24. Sun City West – 97.61%
25. Sun City – 97.57%
26. Phoenix – 97.54%
27. New River – 97.42%
28. Casa Grande – 97.13%
29. Coolidge – 97.11%
30. Sun Lakes – 97.06%
31. Arizona City – 96.85%
32. Eloy – 96.79%
33. Cave Creek – 96.48%
34. Gold Canyon – 96.18%
35. Fountain Hills – 95.95%
36. Scottsdale – 95.94%
37. Tonopah – 95.38%
38. Rio Verde – 94.50%
39. Carefree – 94.36%
40. Wickenburg – 93.87%
41. Paradise Valley – 91.91%
We note that 9 out of the top 10 cities are in the West Valley and 6 out of the bottom 10 are in the Northeast valley. Do you think higher pricing has anything to do with that?
One other stat not shown here can make the above somewhat misleading. The average percentage of the “final” list price is measuring the difference between sales price and what it was last listed for… not what it was originally listed for. If that number was measured, it would be a greater disparity, especially for the more expensive cities.
So, while there’s no current danger of a market bubble, the low and moderate price ranges are moving up, and the higher price range homes are definitely open to offers!
Market data referenced in this article comes from The Cromford Report.