From Michael Orr at the Cromford Report: The short supply of homes for sale in the Phoenix area is getting more severe.
March 29 – The supply shortage is getting increasingly severe as new listings are now being added to ARMLS at the slowest seasonal rate since the current ARMLS database began in 2000. This new chart illustrates the trend. Note that January and February listings are well down compared with the same month last year. Note also that with only 2 days left to go in March we are going to be substantially down on both 2010 and 2011. In fact it already is certain to come in at the lowest level for any March in the last 13 years.
Yes, I think the Scottsdale real estate market is insane. And not just Scottsdale, it’s Phoenix, Chandler, Mesa, Gilbert, and all the rest of the Valley of the Sun.
I’ve been working like a maniac for the month of March, and have seen so much craziness. I feel for buyers who are totally challenged to find a home in our low inventory situation, and then who have to overbid to get one of the very few homes available.
Sellers on the other hand are starting to come out of the closet. And being surprised to find that they may not have to give their home away. That they actually have a product, their home, that’s in demand.
It’s total craziness.
One of my home buying clients sent me their short list of homes on Friday afternoon, so I can set up showings for Saturday. I schedule the showings, and then Saturday morning, I check the MLS, just to make sure that all of the homes they wanted to view were still available. Three of the six homes they wanted to see were under contract, overnight.
This same client now jokes cynically that if a house has been on the market over 20 days, there just must be something wrong with it.
Another home buyer is telling that searching for her first home is like another full time job. Her frustration level has escalated, too.
Sellers, on the other hand, are calling the shots. Setting a price to today’s market, one that’s realistic for the home’s condition and location, will almost guarantee multiple offers.
Last night, I called to set up a showing for a Scottsdale home that went on the market a couple days ago. The first allowed showings were for today. As of last night, the selling agent said he had ten showing appointments scheduled for today, and that three buyers were ready to make offers, sight unseen. He was sure that the house would sell for over list price.
If that isn’t insanity, what is?
On the plus side, home prices are appreciating. Sellers who thought they would have to short sale, and aren’t terribly “under water” can see that some day they may have a home with some value.
I was able to help a seller last month, who thought she was going to have to short sale her Scottsdale townhouse. We priced the home so that she could walk away without have to bring any cash to the closing table. She got her first offer within days, and when the home didn’t appraise, she took a second offer that did appraise over the very same price two weeks later!
And for another potential home seller, who thought she was going to have to short sell, we found that the estimated selling price of her home increased over 5% in just a couple weeks.
Some of my comments here are tongue-in-cheek. But, seriously, buying a home should really be a highlight, not a chore, or a battle, or even a second job.
If you’re a home seller, call me! Let me tell you what I think the value of your home is today. And then, give you some ideas of what the market is doing in your neighborhood.
If you are a home buyer, yes, please call me, too. I will counsel you on what you need to do before you start your home search, and then also on strategies to get your offer accepted.
The real estate market is always changing, here in Scottsdale, as well as the rest of the world. We were hoping for a balanced market and looked how quickly it’s changed back to a seller’s market. And in only seven short years.
March 8 – As home prices rise at an accelerating rate, we today hit $125,000 for the monthly median sales price (all areas and types) for the first time since August 12, 2010. The lowest monthly median recorded was $107,000. This was measured on February 24, 2011 and again on August 17 and 18, 2011. So the monthly median sales price has risen 16.8% in less than 7 months and looks likely to rise considerably more in the coming months. Appraisers are finding it hard to keep pace with this rate of increase as comps are out of date within a couple of weeks. This is similar to 2005 except we are starting with prices a very long way below 2005 levels.
From personal experience, I can tell you that it’s really an interesting and challenging time in the Phoenix real estate market.
As an example, I listed a Scottsdale townhouse in January, which had multiple showings, and an almost full-price offer within the week. The buyers loved the house, but not enough to pay the difference when the house appraised at $7,000 less than the purchase price. The house went back on the market, and a second buyer placed the same offer almost immediately. When his appraisal came in several weeks later, the house appraised for OVER the purchase price.
If I put that same townhouse on the market today, I suspect that it wouldn’t last a day, it would have multiple offers, and that at least one of them would be over the listing price.
One of the really good side effects of the appreciation is that owners, with homes that are borderline short sales, are now able to see the light and start planning to sell, without the repercussions of a short sale.
It’s a crazy time to be a buyer, or a real estate agent for that matter, but in the grand scheme of things, this appreciation is very welcome and another step on the road to a more balanced market.