Anyone working in the Phoenix real estate market or looking to buy property knows that the market is very competitive and difficult at this time. Inventory is low, investor purchasing is up and that leaves the everyday Joe and Jane out in the heat. (Yes I said heat not cold, it is Arizona afterall). We have seen years of a difficult market, but the interesting thing to note is that the difficulty has varied greatly. From homes under water and long sale times to tremendous activity and multiple offers. The ups and downs make real estate agents question their sanity.
This swing is well noted in this months report from the Center for Real Estate Theory and Practice at the W P Carey School of Business at Arizona State University. These are some of the most detailed reports on the Phoenix real estate market and widely quoted throughout the industry. This months report was issued earlier this week and here are the headlines:
• Single family home prices have risen quickly and are now far higher than in May 2011:
o The median sales price is up 32.4% from $111,000 to $147,000
o Average price per square foot is up 22.2% from $80.30 to $98.14
• Townhouse/condo prices have increased by a slightly larger percentage:
o The median sales price is up 37.3% from $69,900 to $96,000
o Average price per square foot is up 23.1% from $84.89 to $104.05
• Overall supply (excluding homes already under contract) is down 50% on June 1 2012 compared
with June 1, 2011, and distressed supply is down 80% over the same time frame.
• Foreclosure starts on single family and condo homes rose 1.2% between April and May 2012 and
were up 5.2% from May 2011
• Recorded trustee deeds (completed foreclosures) on single family and condo homes were up
18% between April and May 2012 but were down 52% from May 2011
• 71% fewer single family homes reverted to lenders at trustee sale compared with May 2011
• Sales of single family homes were 5.8% lower than in May 2011, constrained by lack of supply
• Single family home sales increased year on year for
o New homes (up 57%)
o Normal re-sales (up 74%)
o Short sales and pre-foreclosures (up 15%)
• Single family home sales reduced year on year for:
o Investor flips (down 4%)
o Bank owned homes (down 46%)
o GSE (Fannie Mae, Freddie Mac, etc.) owned homes (down 76%)
o HUD sales (down 67%)
o Third party purchases at trustee sale (down 16%)
Unless otherwise stated all the statistics shown are for Maricopa and Pinal Counties combined.
No matter which metric you follow, median pricing, price per foot or any other, there is no question that the market has swung upward quickly. First time buyers, investors and many who have been foreclosed on but can now qualify again are vyeing for limited inventory. Frustration levels are high among buyers, but potential seller's hopes are buoyed by the prospect of actually making some money.
More details on various aspects of the report to come in future blogs.
Adam Tarr PC
Citywide Real Estate