By Mike Bodeen · 16 December 2019
The 2019 November numbers are in and they are not ones we can ignore. What we essentially have is a huge increase in demand alongside a huge decline in inventory. If you’re thinking of selling, congratulations! If you want to buy, well I hope you know a good Realtor to help you navigate this seller’s market 😉 You can see that median home values are up almost 8% from last year as well.
Active Listings: 13,869 vs 18,563 last year – down 25.3% – and down 4.5% vs 14,525 last month
Under Contract Listings: 9,572 versus 7,735 last year – up 23.7% – but down 1.5% from 9,716 last month
Monthly Sales: 7,119 versus 6,638 last year – up 7.2% – but down 11.4% from 8,032 last month
Monthly Average Sales Price per Sq. Ft: $179.57 vs $166.75 last year – up 7.7% – and up 3.1% vs $174.21 last month
Monthly Median Sales Price: $281,000 vs $260,500 last year – up 7.9% – down 1.4% from $285,000 last month
Why Our Clients Are in the Know!
We’ve been warning about these impending price increases for a month or two now but the local media has not caught on. Why are we ahead of the game with Real Estate news? As subscribers to the ultimate local real estate statistic machine known as “The Cromford Report,” The Bodeen Team has access to the most complete, extensive, and accurate Phoenix metropolitan real estate stats available anywhere – and we share those with you!
“‘If our forecast proves accurate it will mean the average $/SF for monthly sales will have advanced from $169.46 to $183.52 in just 4 months. This is a total rise of over 8%, equivalent to an annual rate of 25%.'”
Based on sales price increases and projections we’re now seeing and have seen in the past few months, and which we’ve reported to you each Monday, the Phoenix metro market has entered a new price wave not yet even being reported in the local media. On December 15th, the Cromford Report shared this:
Our mid-point forecast for the average monthly sales $/SF (price per Square Foot) on January 15 is $183.52, which is 1.9% above the December 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $179.85 to $187.19. If our forecast proves accurate it will mean the average $/SF for monthly sales will have advanced from $169.46 to $183.52 in just 4 months. This is a total rise of over 8%, equivalent to an annual rate of 25%.
So there you go, you’re (still) in the know.
Is a Name Worth $3,917 Per Square Foot?
Well not yet it isn’t. The Wall Street Journal wrote an interesting piece on Frank Lloyd Wright design homes from a value perspective recently. The article noted the $10,000,000 (actually $9,999,999) asking price for an Arcadia Frank Lloyd Wright design home currently for sale on almost 6 acres. This translates to $3917 per square foot (PSF). The article we’ve linked to below is an interesting read.
https://www.wsj.com/articles/whats-in-a-name-for-these-homes-its-frank-lloyd-wright-11576164626
But, as cool as it may be to own a Frank Lloyd Wright designed home, the question is, can our Phoenix Metro market support such a PSF? Not according to our Multiple Listing Service (MLS) pricing history, however. The highest PSF ever paid in Phoenix Metro to date, for any home sold on the MLS, occurred in Paradise Valley in 2007. A home sold for $2804 PSF.
Of further evidence the home may be priced too high? Perhaps it’s the 471 days it’s been unsold on the market.
As our clients have heard us say, Realtors don’t determine value. Sellers don’t determine value. Appraisers don’t determine value. Only buyers determine value!
Market data referenced in this article comes from The Cromford Report.