Per Michael Orr of the Cromford Report and the WP Carey School at ASU, February was an excellent month for the optimists with improvements for sellers across the majority of price ranges and geographic areas. The main exception was the luxury end of the market, where supply has been growing and demand diminishing.
Here are the basic ARMLS numbers for March 1, 2015 relative to March 1, 2014 for all areas & types:
• Active Listings (excluding UCB): 23,541 versus 26,589 last year – down 11.5% – and down 1.7% from 23,950 last month
• Active Listings (including UCB): 27,315 versus 29,613 last year – down 7.8% – but up 0.8% compared with 27,095 last month
• Pending Listings: 6,709 versus 6,462 last year – up 3.8% – and up 25.1% from 5,631 last month
• Under Contract Listings (including Pending & UCB): 10,483 versus 9,486 last year – up 10.5% – and up 30.5% from 8,776 last month
• Monthly Sales: 5,982 versus 5,444 last year – up 9.9% – and up 24.9% from 4,790 last month
• Monthly Average Sales Price per Sq. Ft.: $130.08 versus $127.38 last year – up 2.1% – but down 0.6% from $130.86 last month
• Monthly Median Sales Price: $195,000 versus $182,000 last year – up 7.1% – and the same as last month
The rise in the under contract count over last year – up 10.5% – understates the magnitude of the improvement because it includes all areas & types. The balance between supply and demand has altered the most for the price ranges between $75,000 and $800,000. Outside that wide and important price range, things don’t look like they are improving much at all. The luxury market has certainly weakened, but then it has had a very good run for the past 2 years while the rest of the market has floundered. Everything in real estate is cyclical, so it is probably time for the luxury market to rest for a while and let the lower and mid range markets have their turn.
Sales in January were slightly below January 2014, but in February more than made up for that and we saw an increase of almost 10% over February 2014.
The most encouraging development is the return of the entry level home buyer and this can be seen in the places where demand is clearly outstripping supply. Specific examples include Mesa 85202, 85203, 85204, Phoenix 85017, 85019, 85027, 85029, 85031, 85033, 85035, 85037, 85040, 85043, 85053, El Mirage 85335, Avondale 85323, Glendale 85302, 85304, 85306, Chandler 85224, Youngtown 85363, Tolleson 85353 and Tempe 85283. All of these have a Contract Ratio over 90, qualifying them as “hot spots”. Last year at this time only 2 ZIP codes – Youngtown 85363 and Mesa 85210 were higher than 90 across the entire valley.
Last month we commented that the first time home buyer is critical to the next stage of the recovery. It looks like we finally got what we have been waiting for. Now we have to hope that February was not a one-time blip and that the trend will continue through the spring.
Additionally per the Arizona Real Estate Investors Association(AZREIA), Phoenix has now moved into to a SELLERS MARKET. oUR BELIEF IS THIS WILL FURTHER STRENGTH SELLER FINANCING ADVANTAGES. As this is written, many proeprties do not appraise. Forty percent of available “solid” buyers still cannot purchase setting up a perfect storm for Seller Financing and Sellers for the following reasons: Due to damand, sellers can sell for more than market to a greater pool of buyer and without an apprasial and…………..much faster due to tripple the pool of the normal MLS buyers.
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