Phoenix Housing Market Update March, 2020

By
Real Estate Agent with Value Added Service, 602-620-2699 SA5376460000
https://activerain.com/droplet/5mSg

The Phoenix Housing Market Update for March, 2020 includes some statistics into early April, but is a good representation of real estate market activity.

 

With the current pandemic, these reports will show activity as to what's for sale, sales prices, cash buyers, how long it currently takes to sell a home (on average), the total number of sales and where prices are going.  Make sure to read the commentary at the end of the report.  

 

All of these reports are by subscription of the Cromford Report. Please don't share or violate copyright laws. 

 

 

As of today, 4/8/2020,  there are 2726 cases of COVID-19 in the Maricopa Countya rea of Phoenix with 4.5 million people has 1559 cases.  Please visit the CDC site linked to Arizona to verify the daily count.  

 

This chart reflects new listings as they hit the market monthly.  As you can see, our active listings are still lower year over year from 2019.  This report is one to watch for new listings as showings are down due to social distancing and other reasons related to COVID-19. 

 

New Monthly Listings Phoenix March 2020

For the month of March, it took an average of 54 days to sell a house in Maricopa County.  Starting off in April, the number of days it takes to sell a house in the Phoenix Metro area is 48 days.  It will be interesting to see how this number changes moving forward since showings during this virus are down significantly.  

Phoenix Average Cumulative Days on Market

Of significance is the large number of cash purchases that doesn't show signs of stopping!  Of the total number of sales, over 20% are purchased with cash.  Rising prices have slowed some of those buyer purchases, but the number has remained steady during the last six years. 

 

Cash Home Purchases in Phoenix

The peak for homes under contract in 2019 occurred on 4/27/19 with 12,478 homes under contract.  Currently, the peak this year is for March 14 with 12,011 homes.  This number is expected to decline as some hold off on housing activity due to social distancing.  Our Canadian snowbirds may yet still be in Canada as borders are closed, which MIGHT be hindering purchases and sales.  Some who might have been planning to sell MIGHT be holding off.   Every peak on this chart occurred during the month of April so we are expecting the number of listings under contract to decline.  Homes need to be priced right, clean, and move-in ready.  This is not the time to over-price a   listing, but that depends on the price range.  

 

Listings under contract in Phoenix March 2020

The Monthly Median Price in Phoenix continues to rise and is currently $305,000.   This number is a 12% increase year over year in price.  Nice increase. 

 

Monthly Median Sales Price Phoenix March 2020

Sales for March, 2020 are 10% higher than March, 2019.  As we move forward it will be interesting to see where we land.  Foreclosures continue to remain low with 467 for the month of March. 

There were 805 short sales for March, 2020; 805 households have missed 3 or more mortgage payments and have been issued a Notice of Default.  There were 955 short sales in March, 2019, reflecting a 16% drop in short sale notices year over year for March.

 

Sales per Year Phoenix March 2020

 Following the market changes with these reports is a good way to be informed and stasy ahead of what's happening.  Reports like this are historical in nature; however, Under Contract Price Per Square Foot is a good indicator of where prices are going since those homes haven't closed yet. 

Under Contract Price per Sq Ft Phoenix March 2020

Under contract price per square foot dipped March 13th, but there have been declines in this number before, especially since this is an average and includes all price ranges.  How far this decline will go is a good question.  Watching this number and the other indicators helps to define buyer sentiment.   

 

The following is a direct quote from the Cromford Reportt's creator, Michael Orr as of April 7:

 

"April 7 - New residential listing counts took a jump between March 19 and April 3, but are now dropping back sharply and today the weekly count of new listings is down over 12% compared with the same period in 2019. This is not surprising as the pandemic saps seller motivation almost as much as it dampens buyer enthusiasm. This new trend in new listings means supply is still inadequate to meet demand even though demand has been artificially crushed by the COVID-19 outbreak and the measures taken to control it. The implication is that prices are still not seeing any prospect of experiencing any downward pressure in the near or medium term.

History shows that home prices only fall when their is a glut of homes available and sellers have to compete with each other to move them. A fall in demand, however severe, is not sufficient to drive prices lower. There has to be an excess in supply relative to that demand. We saw this between 2006 and 2009 for the entire market and for the luxury market between 2015 and 2017. You may see a few builders offer incentives to close contracts, but it would be surprising if they cut list prices or lot premiums in the current market conditions.

The same trend is not true of rental listings which continue to grow healthily. They are up nearly 35% from 2019 for the last 4 weeks. It will still take a long time before this trend results in enough rentals to meet demand. However the current situation means that rents are likely to rise less quickly than they would have done before corona virus.

Each year we see a fall in average $/SF for re-sales between late May and late September but this is a result of the sales mix containing far fewer high-end homes. This is likely to be an even stronger trend in 2020 because the luxury market has seen many homes taken off the market and what extra supply has arrived has been strongly biased towards the affordable end. The mix of what is for sale is therefore biased towards the lower $/SF which will result in lower averages in the closed figures. The fall in average $/SF during the hottest months does not mean home values are falling any more than it did in the years 2000 through 2019. You should take this into account when reading all the sales price numbers for the next 6 months."

Again, please do not plagiarize or copy this material as it is by subscription. Please contact me if you have specific questions!

 

 

 

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Rainmaker
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Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you Endre Barath, Jr. !  Good luck and hope all of your deals are winners!

Apr 09, 2020 09:00 AM #4
Ambassador
2,017,857
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Hi Jan, I think the momentum carried much of us through March and into April. It will be interesting to see how this plays out in the coming weeks. 

Apr 09, 2020 01:56 PM #5
Rainmaker
1,010,014
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

You're right  Debb Janes EcoBroker and Bernie Stea JD !  The low inventory was  a good thing at least, even if inventory does pick up.  Stay safe!

Apr 09, 2020 02:54 PM #6
Rainmaker
2,732,795
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Phoenix home buyers and sellers are sure to value your real estate market reports, Jan!

Apr 09, 2020 03:29 PM #7
Rainmaker
1,010,014
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you Myrl Jeffcoat !  Have a great evening!

Apr 09, 2020 06:24 PM #8
Rainmaker
3,628,777
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Jan - it is good you don't fall prey to willy-nilly real estate predictions for Phoenix but take a thoughtful and knowledgeable approach to activity.  Of course, contacting you when it comes to learning and maintaining updated is good advice for those thinking of buying/selling in the area.  

Apr 10, 2020 05:26 AM #9
Rainmaker
1,010,014
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you Michael Jacobs !  It doesn't do anyone any good to share stats that aren't accurate, as you know.   I appreciate fact filled information, not gossip.  It's frustrating to see people misquote during times like these.  Have a great day!

Apr 10, 2020 09:17 AM #10
Rainmaker
4,322,979
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Jan, you have a very comprehensive market report for Phoenix and wonder how the pandemic will affect late March and early April sales.

Apr 16, 2020 04:33 PM #11
Rainmaker
1,010,014
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Good question Joan Cox !  I'll be doing another report in early May to reflect April over April results.  Showings are down signficantly and sales are off so we'll see.  I bet this is having an effect on your market as well!

Apr 17, 2020 08:06 AM #12
Rainmaker
919,600
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

Great insight, and congratulations on receiving your appraiser license I saw in a previous post. Well done. Very thorough report and good information for buyers and sellers in light of the current situation.

Apr 20, 2020 01:29 PM #13
Rainmaker
1,010,014
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you for commenting Nick Vandekar, 610-203-4543 . I did not earn an appraisal license, I host the green courses as a volunteer.  Sorry if that was confusing!  I've done that 4 times now in Arizona to add appraisers to the green registry for those homes with high performance features that should get extra value.  Have a great day!

Apr 20, 2020 01:34 PM #14
Rainmaker
919,600
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

I saw the headline and had not read the post, should have gone back and read it. But, I still think hosting those courses is a big investment in the Green Product and helpful for appraisers to be added to the green registry.

Apr 20, 2020 01:37 PM #15
Rainmaker
1,010,014
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you Nick Vandekar, 610-203-4543 !  I regularly raise $8 - $10,000 to host those 2 day courses. The instructor flies in from Florida so it's logistics, ordering books, signing contracts, being present for 2 solid days to make sure everything goes without a hitch, a big undertaking.  In order to be on the green registry on the AppraisalInstitute.org site, they have to complete 4 days of courses.  It's a huge bonus to them because this education from us as volunteers is really cheap as compared to what others charge them.  Appraisal courses are expensive

Apr 20, 2020 01:40 PM #16
Rainmaker
2,182,545
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Jan Green - I really and truly believe that you are the busiest woman and EcoBroker in Scottsdale, AZ and its surrounding communities! You are a wealth of information and very detail oriented too. All buyers  and sellers will appreciate your knowledge and expertise. I also believe, highly successful people, people who have risen to the top of their profession, are very similar to you, but there really is only one you!!! 

Apr 21, 2020 12:11 PM #17
Rainmaker
1,010,014
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you Patricia Feager, MBA, CRS, GRI,MRP !  I appreciate you and your expertise and love reading your posts!  I hope you are doing well, but I bet you're also doing positive projects these days in light of the virus!

Apr 21, 2020 02:30 PM #18
Rainmaker
2,146,345
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Jan - point made about pricing is a good one.  The supply is very low and remiains so.

Apr 27, 2020 05:21 AM #19
Rainmaker
1,010,014
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you for commenting Grant Schneider !  It's important for others to know that even though our contracts are down, days inventory is still very low.  Our market is much different than others who have more COVID cases.  As they say, real estate is about location, location, location!  Have a great day!

Apr 27, 2020 12:07 PM #20
Rainmaker
3,413,034
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Jan Green and thanks for sharing this information with us.  Always intersting to see what other areas are doing in these times.

 

May 01, 2020 09:54 AM #21
Rainmaker
1,010,014
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you for stopping by Will Hamm !  You're right.  I'm due to write another update now that we have another month of this craziness.  Hope you're doing well!  

May 01, 2020 10:00 AM #22
Rainmaker
1,824,360
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

thanks for sharing this market update - it is so important to keep track of what is going on in different parts of the country

May 07, 2020 05:35 PM #23
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