By Mike Bodeen · 4 September 2017
Supply Down. Pending Sales Down. Sales Up. Values Up.
Some interesting findings in our August report, though few surprises.
The few surprise categories include the continuing trend of lower listing inventory, steady and healthy appreciation rates, and higher sales than one year ago at this time.
So where’s the surprise? We’re down in “under contract and pending” listings compared to last month and last year. Could this be a sign of a market slow down? Well, that’s certainly possible, but not likely, especially if inventory remains low, which it currently is. I’m more concerned about increased rental demand from a “Harvey Factor.” (See below)
September 1, 2017 and comparing them with September 1, 2016 for all areas & types:
Active Listings: 17,486 versus 19,186 last year – down 8.9% – but up 0.4% from 17,412 last month
Pending Listings: 6,002 versus 6,331 last year – down 5.2% – and down 1.4% from 6,085 last month
Under Contract Listings: 9,871 versus 10,318 last year – down 4.3% – and down 2.8% from 10,157 last month
Monthly Sales: 8,168 versus 8,003 last year – up 2.1% – and up 1.8% from 8,021 last month
Monthly Average Sales Price per Sq. Ft: $149.48 versus $138.64 last year – up 7.8% – and up 0.5% from $148.79 last month
Monthly Median Sales Price: $244,900 versus $227,800 last year – up 7.5% – and up 1.6% from $241,000 last month
We still have a seller’s market in most locations and price ranges, but the current trends means the seller’s advantage has very little momentum. Before buyer’s get too excited, the trends are very mild in nature. As such we do not currently see major increases in buyer’s bargaining power coming anytime soon.
The Harvey Factor
Another question arises in the wake of the Hurricane Harvey devastation. Will we and other states nearby see a surge in newcomers renting and buying homes? As farfetched as that may seem we don’t yet understand the magnitude of tens and perhaps hundreds of thousands of folks displaced by this storm. Awhile back I had a client who was relocating from the Gulf Coast. I asked this successful young lady why she chose to move to Phoenix. She replied, “I did my homework and did not want to move anywhere where there were natural disasters such as earthquakes, tornados and hurricanes.
Only a few states qualified including Nevada and Arizona.” She wisely chose Arizona.
At first, I can see an increase in renters. This would stretch our tight rental market even more than it currently is raising rents. Beyond that, I think many will feel like they don’t want to live with the threat of another “Harvey” in their lifetime and will opt to move to warm but safe states.