It is time to look at what’s happening with the Phoenix real estate market. Since much of our work is in the downtown Phoenix real estate sector, our report will pay special attention there.
The Overall Phoenix Real Estate Market Report for May-June 2013
You have probably heard the Phoenix real estate market is very hot. Articles in the Business Journal, Arizona Republic and national papers all tout our market as the most recovered and vibrant. If you’ve been reading our reports on UrbanConnectionRealty.com you know why… inventories are at record lows and demand is strong.
The number of homes for sale (Active Listings) has been dropping 2-3% a month this winter/spring. Compared to this time last year the numbers are down 13%. The surprise is sales are actually higher than last year, thus putting a lot of pressure on home buyers and giving sellers much more power.
The result has been a clear rise in home prices/values. According to ASU’s real estate guru, Mike Orr, May was a “blow-out” month and prices rose 1.9% from May 15th to June 15th and another bump of 1-1.2% is expected by mid-July.
Here are the basic ARMLS numbers for June 1, 2013 relative to June 1, 2012. NOTE: These stats are for the Greater Phoenix market, not your specific neighborhood.
- Pending Listings: (homes in escrow) 9,662 versus 11,656 last year – down 17.1% – and down 11.3% from 10,888 last month.
- Monthly Sales: 9,316 versus 8,439 last year – up 10.4% – and up 4.3% from last month.
- Monthly Average Sales Price per Sq. Ft.: $119.40 versus $101.85 last year – up 17% – and up 2.5% from last month.
- Monthly Median Sales Price: $175,000 versus $145,000 last year – up 20.7% – and up 1.7% from last month.
Many people are worried about another bubble happening. The Urban Boys are not too concerned. There are 3 major factors we believe will keep prices from uncontrolled climbing.
- Appraisers are doing a pretty good job of keeping a lid on skyrocketing home prices. In many cases we see the appraised value come in less than what was offered to the home seller. Since the lender will not loan more that the appraised value, many home sellers have to reduce the contract amount or start all over.
- Interest rates are starting to creep up. We believe the rise in rates will keep some people from entering the market.
- Summer! It’s not fun home shopping in 110 degree heat; better to take off to San Diego. Add schools reopening in August, vacations, a lack of out-of-state buyers and it is no wonder homes sales flatten out until mid-October.
What’s happening in downtown Phoenix real estate?
- Of the 4 major downtown zip codes, 85006 has the most affordable houses. It is also a very competitive area with most homes selling for above asking price.
- 54 homes and 31 condo/townhouses sold from May 1st to June 16th in the downtown region. Surprisingly, 2 condos topped out with the highest prices; One in Crystal Point and another in One Lexington. The average single family home sold in the $180K range.
- Historic homes are seeing a lot of interest and prices above $200/sqft are not uncommon. We are seeing a lot of interest in Pierson Place & Yaple Park. Both are rich with Ranch style homes and very popular with the mid-century modern clan.
- Condos are selling better, yet there are many that cannot get traditional financing. Several, like Phoenix Towers are CO-OPS and do not qualify for financing, some have law suits against the builders and others have too many investor owners to qualify for traditional bank financing. It can be frustrating for people trying to buy a condo. Lots of homework and patience is advised.
We are pretty excited about the current real estate market. Over the past two years we’ve seen the rebound needed to get a lot of homeowner out of the muck. Lenders are being more responsible so few non-qualified buyers are being given loans.
One stat we found interesting is the number of people who failed to sell their home during this hot market. Over 10,000 homes put on ARMLS went unsold (the listing expired or was cancelled) in the first 5 ½ months of 2013. One study says this is mostly due to 2 factors.
- First, the home was priced too high and did not attract a viable offer.
- Second, people hired friends or relatives with little real estate experience to market their home.
Just proves that buyers are not stupid and experience does matter.
We hope this info has been helpful. If we can be of further assistance, please let us know. For over twenty years we’ve been connecting people to the perfect place or simply answering questions.
Best to you as we move into the heart and heat of summer.
Ron Urban & Gene Urban
The Urban Team at Realty Executives