Contracts up 19% in this Price Range!

Contracts up 19% in this Price Range!
Flip Sales Rebounding Strong after Weak First Quarter

For Buyers:
New listings activated in June were down 10.0% compared to last June and overall supply has dropped 9.5% in 4 weeks, putting it below last year’s count for the first time all year.  Buyers have gotten used to very little supply under $200K but now they’re feeling it hard between $200K-$250K, where new listings were down a whopping 15.1%.  Trying to fill the gap, brand new town home/condo sales have been strongest between $200K-$250K with a median size of 1,362sf.  The top two builders that have sold the highest number of condos in this price range this year are Lennar in Gilbert and DR Horton in Mesa.  Other competing developers building multi-family between $200K-$250K include Bela Flor in Mesa and Maracay in Goodyear.  In Mesa, new condos in this price range have been extremely competitive with resale with an average price per square foot of $155.70 versus $157.47 for resale.

For Sellers:
Listings in escrow are up 7.4% and have soared nearly 19% over last year between $250K and $600K.  Homeowners with property valued under $250K are inundated with offers from investors as flip sales* have rebounded strongly over the past few months.  Making up for lost time after being down 4.2% in the first quarter, successful flip sales have now outperformed 2018 by 4.8%. The median sale price for a flipped home in May was $245K, up 8.4%, and the average size sold was 1,710sf.  The median gross gain for a traditional flip investor was $53K between their acquisition and sale price.  iBuyer companies such as OpenDoor, OfferPad and Zillow showed a median gross gain of just $9,900, however that doesn’t account for significant service charges to the sellers during escrow.

*A flip sale is defined in this case as the sale of property within 6 months of acquiring it.

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

Posted on July 31, 2019 at 8:51 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 , , , , , , , , , , ,

When is the Phoenix Housing Market Going to Slow Down?

 

  • Even though median prices are within 98% of the peak, the fact that interest rates are so much lower today means that homes are still affordable.
  • The median family income has risen $11,000 since 2005, indication there is room for families to bear the increase in price.
  • Despite appreciation rates higher than the rate of inflation over the past 7 years, families making the median income could afford 65% of what sold in Greater Phoenix last quarter.
  • Overall Greater Phoenix home prices have finally reached where they are supposed to be historically and it’s expected to continue rising through the end of 2018.

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

 

Posted on June 8, 2018 at 4:07 am
Eric Karlene | Category: Uncategorized | Tagged , , , , , , , , , , ,