Reporting on the 2020 Phoenix Housing Market - for the 52nd week of 2020 active listings are down a whopping 52%! There are many factors that contribute to low inventory in housing nationwide. Many homeowners have already achieved low interest rates for their homes and aren’t selling at this point in time. Baby boomers are aging in place, some homeowners think there will be a housing buble, but millennials are now first-time home buyers and snapping up homes as the 2nd largest segment of the population . New construction has not kept pace with the population growth or demand in the Phoenix Metro Area. Since 2010 builders have not kept pace and are still behind. There are now lotteries and waiting lists for lots in new home subdivisions. Competition is fierce and strategies have changed in order to secure a contract with multiple offers being commonplace.
The seasonal trend shifted this year due to Covid. Listings that were entered into the MLS in March stalled as showings screeched to a halt with the increasing news of the pandemic. But soon enough buyers and sellers received the news of how to practice safely buying homes, and many realtors resorted to virtual showings and open houses. Demand surged!
Frequently, I’m asked about various price ranges. To give a true picture of Active Listings by price range this chart reflects all of the homes by price range in various shades of green! Notice the HUGE drop in affordable housing. Just this week, I listened in on a call (my second on the topic of diminished affordable housing). The speaker is building manufactured/modular housing projects popping up in several parts of the country to solve this increasing problem. More on this in another post.
With so few listings and more buyers than sellers, you can bet that homes are selling over list price. According to data from Realtor.com, shared by ABC 15, the Phoenix Metro Area can expect an approximate 11% increase in sales prices over the 2020 numbers, and 2021 is still red hot!
The largest number of homes selling over list price are between price ranges $200,000 and $300,000. The total number of sales over list price is 36.7%, approaching the highest number since 2005. The highest amount selling by price category is $2 - $2.5 million. So paying over list price isn’t just for lower prices! Second in that category are homes priced from $2.5 - $3 million.
How fast does it take to sell a home in Maricopa County? Just 41 days! Ignore the last bar in this graph as as that's for the first few days in January so not represented in full. This is the fastest time in the last 5 years for selling a home, outside of October and November, 2020 when homes sold in 38 and 39 days.
The gap between list vs. sale price has narrowed to one line on this chart. Notice that during the housing recession between 2010 and 2011 that opportunities to purchase a home for less than list price existed. If a home doesn't sell in 40 days in this market, there are other factors weighing on that sale. It's over-priced, has leased solar panels, or is in a horrible location. If a home backs to a busy road, that isn't as bad as it used to be, but if it's over-priced it will lag on the market.
On to sales. 2020 reflected a surging housing market that almost surpassed the highest number of sales in any year since 2005. A total of 100,654 homes were sold, narrowly missing 2005 total of 103,177 sales. Expect that pace to continue as more businesses move to Arizona. According to "Crane Watch" there are 10 significant developments in the bilions that have either started construction or soon will be across the Phoenix Metro Area.
If you are looking for a seasoned professional who understands the current sales market to sell you home, give me a ring!