Phoenix Residential Real Estate Contracts up 12%
Monthly Median Sales Price up 7.1%
The Phoenix Residential Real Estate market has been this summer in comparison to the busy Spring season. However, there is a bright side for sellers. While contracts in escrow have seasonally declined 17% since their peak last May, at 11,190 this measure is nearly 12% higher than last year’s count. Another bright side for sellers is, despite the seasonal slowdown of new contracts in escrow, listings under $400,000 are still getting within 98-99% of their asking price after negotiations. Nearly 28% of July closings through the MLS included some level of seller-assisted closing costs. That percentage is highest for listings between $200,000 and $250,000 at nearly 35%, and lowest for listings over $500,000 at under 5%. Be prepared for weekly price reductions to increase next month as more new listings begin to enter the market.
If you’ve been frustrated over the past 5 months with high buyer demand for well-priced properties within your price range, you should be seeing some relief now. August is typically a slow time for buyer activity across all price ranges and 2016 is no different. Contracts in escrow began their decline in June, dropping nearly 17% from a high of 13,432 in May to 11,190 by the first week of August. Active listings have also declined nearly 10%, down to 19,783 since their peak in March at 21,924. At this time of year, many sellers are tired of being on the market, making it a good time to revisit those listings that were not picked up during the peak or came on the market late in the season. August is a very slow month for new listings to come on the market, therefore expect inventory to be relatively stale until more new listings start coming on stronger towards late September and October.
Scottsdale housing prices remain steady and strong. According to the Cromford report, the average price per square foot for housing is $231/sf, just $2/sf over last year. And while this may not be the impetus to buy or sell. in and of itself, it’s an indicator.
Looking more closely at the cities that have experienced double digit (by %) growth in the past year, you will see that once again, we are in a market where many of the outlying areas are experiencing the greatest growth, and the greatest decline, with the exception of pricey Paradise Valley.
Scottsdale, remains a relatively central location, with easy access to both the Scottsdale and downtown Phoenix job centers. And with stable home prices, remains a smart buy in today’s real estate market.
January 2016: Phoenix Home Sales Update
Buyers: Time to Start Looking
January is one of the top months for new listings to hit the market, making it a good time to start looking. Buyers gain a negotiating advantage when there are more listings in competition with each other. Typical inventory trends tell us that November through January are the peak months for buyers to have the maximum choice of properties before competing buyers begin dwindling the supply and their negotiating advantage. The market as a whole is still a seller’s market, meaning that supply is below normal for the level of demand out there. This shortage is mostly for properties below $200,000, expect more choice in the upper price ranges.
Sellers: Time to Prepare
Get ready for the beginning of the purchasing season! The first week of the year is typically the lowest point for pending sales due to low buyer activity over the Christmas and New Year holidays. The lull doesn’t last for long, however. January is a big time of year for large tourist events in the valley including the Barrett Jackson Car Show, Waste Management Open, Collegiate Football Championship and more. By February, open house traffic will pick up and a notable increase in contracts submitted. In 2015, the number of contracts in escrow nearly doubled between January and June before submitting to the summer slowdown. This year, we’re starting off with 15% more properties in escrow compared to this time last year, a good sign for sellers to kick off the year. There are still a significant number of boomerang buyers recovering their credit after foreclosures and short sales a few years ago, providing a healthy level of optimism for demand in 2016.