If your budget lies somewhere between $200,000 and $400,000 for a home, there’s good news for you. Supply between $200,000 and $250,000 has been rising gradually over the past 12 weeks. After dropping 15% from 2,300 listings in January to 1,944 in May, it has since risen 8.1% to 2,101 listings in August, placing it only 6.7% below last year’s count instead of 18% below like it was 3-4 months ago. Listings between $250,000 and $400,000 have also risen sharply 5.3% from 4,791 to 5,044 over the past 4 weeks, placing them only 0.2% below last year’s count of 5,053 listings. The increase in competition has resulted in a notable 7.3% increase in weekly seller price reductions from an average of 778 per week in June to 835 in July. 56% of year-to-date sales in Greater Phoenix have been between $200K-$400K so this increase in supply should come as a little bit of relief for the majority of buyers. For Sellers:
If you have a home listed between $200,000 and $400,000, then you make up 48% of everything that’s listed in the MLS. Listings under contract in this price range have averaged 7.4% higher in volume than 2017 all year, until now. Over the last two weeks, including the end of July through the first week in August, listings in escrow have dropped to 2.2% below last year’s level. Buyer activity is expected to slow seasonally from the peak in April through the end of the year; however open contracts have dropped 26% since the 2018 April peak compared to a lower 20% drop in 2017 over the same time frame; all while corresponding supply has been rising. Sellers haven’t seemed to notice this sharper decline as their average asking price per square foot has soared from just 3% higher than last year in March to as high as 7% higher in July. The average sales price per square foot was up 5.9% in July, compared to 4.6% in June. However, price is a lagging responder to shifts in supply and demand. We will have to wait and see if buyers accommodate sellers’ price expectations given that they have more to choose from in the marketplace right now.
Home prices rising faster in Phoenix than rest of country, report says
PHOENIX – Home prices in the Phoenix area have been rising faster than the rest of the country, according to a new sales report.
That’s good news for Valley sellers and bad news for buyers.
The median sale price of a Phoenix metro home was $254,000 for the second quarter of 2018, a 9 percent increase over same period last year, according to research released Thursday by ATTOM Data Solutions.
“The market is still pumping along very rapidly in the Phoenix market,” Daren Blomquist, ATTOM senior vice president, told KTAR News 92.3 FM.
The national average was slightly more at $255,000, an all-time high. That was an increase of 6.3 percent from a year ago, the slowest annual appreciation since the second quarter of 2016.
Blomquist said the Phoenix average is just 1 percent under the record high of $257,700 set in the second quarter of 2006. And it was a 133 percent increase from when the marketed bottomed out in the first quarter of 2001.
Phoenix homeowners who sold in the second quarter of 2018 had owned their houses an average of 8.24 years. That’s the longest seen since 2000, Blomquist said.
“People are staying in their homes longer, not just because they had to, which was the case in the wake of the recession as people lost a lot of value in their homes, but really I think more voluntarily now,” he said.
That reluctance to sell contributed to lower inventories and higher prices, Blomquist said.
Those who do put their houses on the market have been cleaning up. Phoenix home sales for the quarter netted an average profit of $69,000, a return of 37 percent. Both of those numbers were the highest since the third quarter of 2007.
“If you did sell, you’d be making a lot of money in Phoenix,” Blomquist said.
KTAR News 92.3 FM’s Jeremy Foster contributed to this report.
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$290,000 2/1.75 2,141 SF
13427 N 107TH DR. Sun City, AZ 85351
$839,900 5/3.5 4,667 SF
2528 W Lodge DR. Phoenix, AZ 85041
$899,000 4/4 3,470 SF
6932 E Presidio Rd. Scottsdale, AZ 85254
New-Home Sales Sink to a 9-Month Low as Housing Market Wobbles
What happened: Sales of newly-constructed homes missed the MarketWatch consensus forecast of a 640,000 pace and revisions to the prior several months were mostly downward. July’s pace was the lowest since last October. It stood 1.7% lower than June sales, but 12.8% higher than a year ago.
Big picture: The government’s home-construction reports are based on small samples and are often revised heavily, making it hard to rely on any one month’s data. But for the year to date, sales are 7.2% higher than the same period last year. The recovery is still going on in the new-home segment of the market, and it remains grudgingly slow.
Builders are increasing their pace of construction but slowly. Tariffs are going to increase input costs, making the road ahead more difficult for the housing market, which desperately needs fresh supply.
What they’re saying: The slowdown in housing is becoming acute enough that even the Federal Reserve is watching. Minutes from the central bank’s last meeting show policymakers discussing housing starts and permits, as well as sales of new and existing homes.
“Housing activity in general has retreated from levels that were temporarily boosted by 2017 natural disasters –hurricanes and wild fires— that forced displaced households to seek alternative housing. The housing sector is also undergoing an adjustment to affordability that is less attractive than it was for most of the cycle, as well as changes in the treatment of SALT deductions in the federal tax code. That is the bad news,” said Ward McCarthy, Jefferies LLC economist.
“The good news is that there is no evidence of the type of imbalances that could cause a sharp downturn, such as heavy inventories and/or rising mortgage default and delinquency rates. We also note this is not the first temporary slowdown in housing activity this cycle.”
Market reaction: Investors are also taking note. Shares of most big builders are down by double digits since the start of the year. PulteGroup, Inc. shares have lost about 12%, while Taylor Morrison Home Corp.’s stock has declined 19%.