By Mike Bodeen · 20 September 2021
An interesting stat I came across this morning were the numbers behind who is buying in our Metro Phoenix communities. Based on Cromford’s research* into the Maricopa County August sales market, we see the following breakdown of Buyers compared with August of 2020. The total of all these sales are 11,092.
*County Affidavits of Value (all recorded sales – not just MLS)
Maricopa County Sales of homes:
1) Intended to be Primary residences (6906) are down 14%
2) Intended to be Rentals (2176) are up 97% (near doubling)
3) Intended to be secondary residences (2010) are up 98% (near doubling)
One obvious takeaway is that fewer (14%) home sales were for those seeking a primary residence. As we’ve mentioned previously, reasons for this involve the higher costs of our homes, effectively eliminating some from the market, many of which would be first-time home buyers. Some buyers may have just given up on the sales process due to the emotionally draining experience of offering, offering, offering, but striking out each time.
Rental purchases nearly doubled. These purchases, though a part of primary resident competition continue to provide housing in the community, albeit as rentals. Since we have a horrific shortage of rental inventory, it’s a good thing that these properties will remain in the pool for primary residents, unless they’re used as short term Air BnB type-rentals. The affidavit of values don’t differentiate how an owner might rent them out.
The surprising, even troubling stat was the doubling of secondary residences. This is typically a 2nd home that an owner uses part time during the year. Think “Snowbirds.” 18% of all sales were for this category. A doubling? That’s a lot!
Why are they buying here? What are they thinking? Well, nobody knows, unless there’s further research done. And the why doesn’t really matter, except the end result does matter, because these purchases actually do take away primary housing from the already chronically low home inventory available.
If this trend continues, and potentially grows, that is not a good thing for buyers, as it could mean a further constriction of supply.
Market data referenced in this article comes from The Cromford Report.