This article looks at the early 2014 Phoenix real estate market with an emphasis on the downtown Phoenix real estate market.
It is time to give our take on what is happening with the early 2014 Phoenix real estate market. In our last real estate market report, published in early December, we chatted about how the market had reached a state of supply and demand equilibrium. The shift towards equilibrium was fast, beginning in July 2013 when it was still a Seller’s market to December when there was neither a buyers or sellers advantage. The question is: where are we now as February 2014 doors opened?
Early 2014 Phoenix Real Market Report and News
January 2014 has been sluggish. Demand has fallen to about 2008 levels but supply is much lower too. This is good news for buyers but home sellers are not so happy. Before you go all doom and gloom, January is always lethargic. Here is some insight from real estate guru Michael Orr from ASU.
Well I hate to say it, but so far 2014 is not shaping up too well for the Greater Phoenix housing market, at least from a seller’s perspective. Rather than rebounding from the disappointing second half of 2013, we are mostly seeing signs of weaker than normal demand and growing supply. As yet this has had a very modest impact on the Cromford® Market Index. However, knowing how that formula works makes me think that it is probably headed lower in the short term. The major contributions to the index are:
- Active & UCB listings -27,700 today – up 9.4% since January 1
- Pending listings – 5,407 today- up 15.9% since January 1
- Monthly sales – 4,696 today- down 21.3% since January 1
Pending listings were up 14.6% last year, but this represented a growth of 1,169 listings, whereas this year’s 15.9% represents only 740, because pending listings had sunk so low by the end of 2013.
Active listings grew only 5.8% between Jan 1 and Jan 20 last year, and on a much lower base. Inventory is building much faster than in 2013, and the starting point was 21% higher this year.
The monthly sales rate dropped only 7.7% between Jan 1 and Jan 20 last year, much less than in 2014.
All told, this is the weakest start to a year since 2008. Having said that, the house buying season doesn’t really get up to full speed until the Super Bowl is over.
The truth of the winter-spring Phoenix real estate market will be better forecast at the end of February. Our personal take is the early 2014 Phoenix real estate market is finding its balance. We are likely to feel small pendulum shifts during our traditional February to July buying season. We expect a nice selling/buying season with buyers able to pick and choose and home sellers realizing they are not driving the car as in the past couple years.
Investor buyers have mostly moved on with few professional stakeholders finding good opportunities in our market. We expect to see some of the early in investors… those who bought foreclosures in 2008-2010 to start putting some of their properties on the market. This is simply because the big market upswings/corrections have happened and some will want to pull their cash profits out and move on to fertile ground.
The oddly good news lies in the intense winter much of the nation is experiencing. If the past tells the future, we will see lots of mid-west and east coasters fleeing to better weather. When folks watch the Phoenix Open and see people wearing shorts they are likely to say… What the heck are we doing here… let’s check out Phoenix and Scottsdale.
What About the Downtown Phoenix Real Estate Market?
Downtown Phoenix is not on fire, yet it is still stronger than most markets. The region has a lot going for it… strong employment numbers, good job growth, a swelling university population (both students and staff), growing infrastructure and overall vibrancy.
The major zip codes downtown zip codes, 85007, 85003, 85006 showed some strength with supplies in the 4 month range (6 months is often described as normal.) Downtown and Midtown’s January numbers on ARMLS show we had about 74 homes/condos in escrow and 42 places sold. These aren’t great numbers but it’s January where a teeming real estate market is simply not happening.
Conclusions About The Phoenix Real Estate Market in Early 2014:
The simple story is we don’t know for sure. From a stats standpoint, January always slurps… a nice way of saying sucks. There just isn’t enough data to make good probability statements.
If you want to know our gut feeling, here it is:
Compared to the wildly vivacious markets of the past 2-3 years, we think Q1 2014 will be described as composed; no big upswings and no scary chasms. We believe home values may drop a tiny bit before stabilizing in March. The bottom line… a bit boring which means you can expect the media to print something salacious.
We expect downtown Phoenix real estate to behave much the same as greater Phoenix with a significant upswing in demand come spring. The historic districts should see a bit more interest with the upcoming Historic Home Tour season. The Willo and Coronado’s tours alone will introduce hundreds of new people to downtown Phoenix and its special vintage homes.
BTW… If you:
- Have questions.
- Are thinking about buying a place.
- Pondering selling your place.
We would be honored and delighted to help provide answers, bounce around ideas and simply be of service. We mean that!!
Best to you,
Gene Urban and Ron Urban
The Urban Team at Realty Executives
Downtown Phoenix Historic Home and Condo Specialists
602-234-5777 (o) 602-486-4839 (mobile/text)
Gene@UrbanTeamAZ.com