Re-sale prices are not predicted to come down this year.

For Buyers:

Re-sale prices are not predicted to come down this year.  Between August 2018 and January 2019 it looked like the market was going to balance out and cause prices to stabilize around the 2nd half of 2019.  However two things happened to change that prediction.  First, average 30-year mortgage rates dropped from a high of 4.94% in November 2018 to 3.82% as of June 2019.  That alone has saved buyers around $177/month on a median-priced $279,000 home with 4% down.  Second, private sector annual earnings in Greater Phoenix rose 1.8% in April after an 8-month period of stagnation.  In the last decade home prices have gone flat just twice, in 2011 and 2014.  Both times there was a corresponding decline in annual earnings. If annual earnings continue to grow and interest rates remain low, the Greater Phoenix seller market will continue to push home prices up this year.

For Sellers:

The May peak buyer season is over.  From this point through the end of the year it’s not uncommon to see contract activity gradually decline 30-40%.  The good news is that despite the predictable decline, listings under contract are coming in 3.7% higher than this time last year.  It’s not evenly distributed along all price points however.  Contracts on listings over $600K are up 3.4% while the $500K-$600K range is up an impressive 33.5%!! Contracts between $250K-$500K are up 16.1% and the low $200K’s are up 8.1%.  Lack of inventory under $200K means that contracts in this range are down 20.6%.  Expect your highest annual appreciation rates to be between 6-10% in the $150K-$225K range as this is where the majority of investor flip activity lies. $225K-$500K appreciation is between 3-5% and over $500K is between 1-3%.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2019 Cromford Associates LLC and Tamboer Consulting LLC

Posted on June 8, 2019 at 8:52 pm
Eric Karlene | Category: Market Updates - Cromford Reports | Tagged , , , , ,

Nov 2018 – The 4th Quarter is Seasonally the Best Time to be a Buyer

New Listings Up 18% in October between $250K-$400K
The 4th Quarter is Seasonally the Best Time to be a Buyer

For Buyers:
Seasonally the 4th Quarter is the best time to be a buyer and this year is no exception.  Typically buyer contract activity is at its strongest from March through May and weakest between November and January.  Buyers who were out-bid by competing offers last Spring will have a different experience now.  October saw 18% more new listings hit the market between $250K-$400K compared to last October while buyer contracts are about the same within the same price range.  There was only a 1% increase in new listings in the lower price range between $200K-$250K but a 12% drop in buyer contracts which caused overall supply to rise another 11%.  The market is still a seller’s market, but more seller competition for fewer buyers translates into more price reductions and seller concessions until the Spring “Buyer Season” is upon us once again.

For Sellers:
The market may be softening between $200K-$400K (which accounts for over 56% of MLS sales), but that doesn’t mean sellers are getting a raw deal.  Monthly average sale prices per square foot in this price range have appreciated 5% since October last year and nearly 19% in last 5 years.  Under $200K, the appreciation rate is 9.5% in the past year and 44% in 5 years.    $400K-$800K has appreciated 6% in the last year and 14% in 5 years and the annual average sale price per square foot* over $800K has appreciated 3% in the last year and 10.5% in 5 years.  What’s happening underneath that contract price, however, is an increased cost to sell at “top dollar”.  That cost can take the shape of longer days on market with multiple price reductions, repairs, needed upgrades to the home prior to list and closing cost assistance.

*Annual averages are used in the higher price ranges to mitigate the sharp price fluctuations that affect this market.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2018 Cromford Associates LLC and Tamboer Consulting LLC

Posted on November 14, 2018 at 4:53 pm
Eric Karlene | Category: Uncategorized | Tagged , , , , , , , , , , ,

Price Reductions up 27% on Active Listings Between $250K-$400K

Seller Concessions Spike on Listings Sold Between $200K-$250K
Price Reductions up 27% on Active Listings Between $250K-$400K

For Buyers:
October marks the 4th month in a row that supply has continued to rise between $200K – $400K, which is good news for many buyers as it provides them with more choice and fewer competing offers.  However, for those buyers with budgets under $200K, this trend in supply doesn’t apply to them and their choices are still extremely limited.  Last January, inventory under $200K made up 18% of all active listings.  Within that price range, single family homes made up 50%, condos and townhomes 30%, and mobile homes 20%.  As of this month, inventory under $200K only makes up 12% of actives and has declined 36% since January.  Single family homes make up 45%, condos and townhomes 36%, and mobile homes 19%.  This drop in supply equates to 591 fewer single family homes, 198 fewer condos and townhomes, and 229 fewer mobile homes available for sale under $200K since the beginning of 2018.

For Sellers:
When supply rises, sellers react in a number of ways to compete with one another for the existing buyer pool.  One option is a price reduction on their active listing prior to contract. This does not necessarily result in a decline in sale price, only a decline in sellers’ expectations for appreciation.  Sales price trends may still continue to rise, but perhaps only at 5% instead of 8%, for example.  Another option is to agree to a concession, such as paying a portion of closing costs or a home warranty; and finally to agree to a much lower sale price than what they were asking. Typically sellers agree to the first two options before submitting to a “low ball” contract, which is why sales price trends are the last measures to respond to a shift in supply and demand.  With that being said, weekly price reductions this month between $250K-$400K are up 27% compared to last year, while price reductions between $200K-$250K are only up 1.7%.  However, seller concessions on sales between $200K-$250K reached 41% so far this month compared to last quarter’s measure of 36%.  Only 21% of sales between $250K-$400K recorded a seller concession.  Which leads us to conclude that sellers below $250K are agreeing to more concessions than price reductions; while sellers over $250K are submitting to more price reductions.  Despite this slight weakening in sellers’ advantage, Greater Phoenix is not close to a balanced or buyer’s market so expect overall prices to continue rising over the next 3-6 months.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2018 Cromford Associates LLC and Tamboer Consulting LLC

Posted on October 9, 2018 at 6:55 pm
Eric Karlene | Category: Market Updates - Cromford Reports | Tagged , , , , ,

Seller Price Reductions up 46% and 61% in these Price Ranges

Supply Continues to Rise in the Middle
Seller Price Reductions up 46% and 61% in these Price Ranges

For Buyers:
Overall supply is down 9.6% compared to last September.  At first glance that’s nothing new.  However, for those of you who pay close attention to our monthly infographic (I know you’re out there), you have no doubt noticed that last May supply was down 15.5%, June supply was down 12.2%, July was down 11.1% and August was down 9.9% from last August.   What this means for buyers is that the Greater Phoenix market is still in short supply, but it’s subtly becoming less bad.  Most significantly, supply continues to increase between $200K-$400K.  Last month we reported an 8.1% increase in listings between $200K-$250K since May, that is now 9.7%.  Between $250K-$300K, supply has risen 15% in only 8 weeks.  Between $300K-$400K, supply has slowly risen 10% since January.  All other price ranges are either declining in supply or following their normal seasonal trends.  This is great news for buyers; more choice in the marketplace means less negotiating pressure. However, don’t expect sale prices to plummet anytime soon. The first price to respond to a supply shift isn’t a sale price, it’s a list price in the form of a price reduction.

For Sellers:
Despite the increase in supply between $200K-$250K, there hasn’t been a correlating increase in weekly list price reductions from sellers yet.  However that is not the case for the market between $250K-$300K where weekly list price reductions have risen 46% in the past 8 weeks and weekly reductions between $300K-$400K have risen 61% since January.  This is not an indicator that sellers are becoming desperate. Make no mistake, there are very few desperate sellers in this marketplace. There are, however, many optimistic sellers who may be taming their expectations. Average annual price appreciation per square foot remains between 3.5% – 5.0% for sales between $200K-$400K, so it’s still a seller’s market despite recent developments.  Expect prices to continue increasing at least through the remainder of 2018.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2018 Cromford Associates LLC and Tamboer Consulting LLC

Posted on September 11, 2018 at 4:51 pm
Eric Karlene | Category: Uncategorized | Tagged , , , , , , , , ,

10050 E Celtic Dr – Beautiful Scottsdale Remodel – Open House!

Posted on August 21, 2018 at 4:37 am
Eric Karlene | Category: Properties | Tagged , , , , , , ,