By Mike Bodeen · 1 October 2018
As is most often the case with Valley real estate sales and values, the third quarter of each sales year seems to slump. This just completed quarter was no different. I wonder if just being in the summer melting pot itself isn’t partly to blame, though that’s no doubt too simplistic.
Mike Orr of the Cromford Report, where we imbibe our oft used statistics, states, “It is not so much that home values go down; more that the sales mix moves away from more expensive properties and the price pressure from the second quarter eases away.”
He continues, “Despite the seller’s market that prevails over the whole valley, the third quarter slump was in full force in 2018. However, it has now run its course and we can see the pressure building for another upward price trend in the fourth quarter. Take a look at the Tableau chart for Under Contract $/SF and you can see a sharp upward turn over the past few weeks. This happened at the same time in 2017 and was followed by 9 months of powerful upward movement. Unless there is a significant change in market conditions we are likely to see something similar over the next 9 months. Such a significant change would involve either a large increase in new listings or a major fall in the sales rate, neither of which are looking likely at the moment.”
“Year over year, Phoenix climbed to 5th nationally with an average price increase of 7.5%”
Nationally, the Case-Shiller® Home Price Index® report was published a few days ago covering sales during May, June and July 2018. A few things strike me. The major west coast high priced cities (Seattle, San Diego, Los Angeles) have stopped their price increases. Portland and San Francisco prices have radically slowed. And Phoenix rose to the #3 Metro area in the country for month to month price changes.
The month to month change in indexes were as follows:
Las Vegas +1.39%
Cleveland +1.35%
Phoenix +0.74%
San Francisco +0.64%
Tampa +0.61%
Atlanta +0.54%
Portland +0.47%
Miami +0.44%
Detroit +0.41%
Minneapolis +0.39%
Chicago +0.33%
Denver +0.33%
Dallas +.18%
Washington +0.16%
Charlotte +0.15%
Los Angeles +0.13%
Boston +0.14%
New York +0.09%
San Diego +0.01%
Seattle -0.01%
Year over year, Phoenix climbed to 5th nationally with an average price increase of 7.5%, higher than Boston, New York, Los Angeles and Portland.
To see Las Vegas as #1 (by a lot) in price rises, is a bit of DeJa Vu. We saw this back in 2004-2005 when the market, here and there, was hugely speculative. May that modern day adage hold true, “what happens in Vegas, stays in Vegas.”
Mike Bodeen
Market data referenced in this article comes from The Cromford Report.