By Mike Bodeen · 10 May 2021
The Phoenix Metro residential real estate market is HOT, but there does appear to be relief in sight. How long toward a normal market is not known, but probably not soon.
Here are the April stats delivered to your doorstep:
Active Listings: 5,080 vs 14,051 last year – down 63.8% – but up 24.2% from 4,089 last month
Under Contract Listings: 12,187 vs 9,512 last year – up 28.1% – but down 3.1% from 12,575 last month
Monthly Sales: 10,172 vs 7,174 last year – up 41.8% – but down 2.2% from 10,396 last month
Monthly Average Sales Price per Sq. Ft: $243.50 vs $183.96 last year – up 32.41% – and up 5.1% from $231.75 last month
Monthly Median Sales Price: $373,000 vs $299,999 last year – up 24.3% – and up 4.1% from $358,250 last month
As you can see, there is a dramatic difference in the listing count currently compared to last year. This may not be the best comparison as last year’s numbers were heavily tainted by the Covid. What we can see is the comparison between this month’s listing count versus last month: Up 24% from one year ago!
The other eye popper is the rate of appreciation from last month to the beginning of May. The monthly average sales price per square foot (psf) was up 5.1% from the previous month. For context, 5% use to be our annual appreciation for a number of years. The monthly median sales price was up 4.1% in the same period.
“The monthly average sales price per square foot was up 5.1% from the previous month…5% use to be our annual appreciation for…years.”
These numbers show a very hot market with supply dramatically mismatched to demand, per the Cromford Report. However they also confirm a cooling trend that has been developing over the last 7 weeks. This was first reported by the Cromford® Market Index but is now being confirmed by a number of other metrics.
As we have mentioned, these numbers are not sustainable, which is why there is also a cooling trend running parallel with the upward pricing. How much of a cooling trend? Probably like going from 115 degree summer heat to 110 degrees – but if the trend continues, which we think it will, we could see some real change in the next few months.
As we mentioned last week however, any downward trend will at some point result in a leveling off. And that leveling period may only be a temporary pause. Market forces will dictate the action.
Market data referenced in this article comes from The Cromford Report.