Welcome to our Phoenix Real Estate Trends May 2015 report. We have good news for home sellers and slightly less favorable news for those looking at buying a home or condo. The article covers the greater Phoenix real estate trends so it is of a more general nature. If you’d like information about your specific zip code or region, drop us an email at info@UrbanConnectionRealty.com. BTW: Click on the small infographic (right) to enlarge and see some overall numbers. Special thanks to FNT for putting it together.
Phoenix Real Estate Trends May 2015 – Overview
At long last we are seeing an increase in demand. It has been some time since we wrote those words. Those selling homes in the under $300,000 range are seeing strong demand and not a lot of competing inventory. The result is lower priced homes are experiencing a significant upswing in value.
The biggest demand is for homes priced under $200,000. This is often the first-time buyer price point or those who lost homes during the market downturn. As we’ve mentioned in the past, 5-6 months of supply is a good stable number. Take a look at some stats from the Cromford Report as to where we are at today:
For the market as a whole we currently see 3.1 months of supply, which is significantly below normal, but not excessively so. However, when we look at the single-family market by price range we see certain price bands with much lower supply:
- $100K-$125K – 1.3 months (versus 2.3 on May 1, 2014)
- $125K-$150K – 1.4 months (versus 2.3)
- $150K-$175K – 1.6 months (versus 2.6)
- $175K-$200K – 1.8 months (versus 3.0)
As you can imagine, first time buyers looking for homes in the under $200,000 range are finding slim pickins. Mike Orr at ASU tells us that just a few years ago we had about 7000 active listing in the $100k-$150 range. Below are some city numbers from May, 5, 2015 on ARMLS.
# Of Homes In The $100k-$150k Range
- Phoenix: 238
- Glendale: 35
- Peoria: 9
- Chandler: 4
- Tempe: 2
As we look at higher priced homes we are happy to report home sales are strong as we move up above the $350,000 price point. These homes are outside qualifying limits for FHA loans so conventional, VA loans and cash are needed to make a purchase.
Phoenix Real Estate Trends May 2015 — Conclusions
We are nearing the end of our traditionally vibrant sales market. Families want to settle in by mid to late July for the upcoming school sessions. Out of town and local buyers will soon be vacationing in cooler climates causing the normal slower summer market. Expect these factors to influence sales from July to late September.
We expect lower priced homes (under $225,000) to continue to do well all summer. There simply isn’t enough inventory and buyers are sitting on the fences waiting to find their perfect place.
The upward movement in home values should help home sellers gain the necessary equity to put places on the market. There are still a lot of people whose mortgages are underwater or just breaking through the ice. Additional gains in value will certainly gives these folks some breathing room. The good news is more homes will be available. ( The graph to the right shows long term changes in the price/sq.ft. numbers. You can clearly see the market highs, lows and recent upward swing in home values based on price per square foot. Graph courtesy of the Cromford Report.)
All in all, the mid April-May Phoenix real estate market is doing well. A little boost in demand, prices rising at manageable/reasonable levels and consumer confidence in the greater Phoenix real estate market is pretty darn good. The only challenge we see in the immediate future is inventory for people shopping for lower price homes. If you are the home seller in that price range things are looking good.
We hope our Phoenix Real Estate Market Trends May 2015 report is helpful. If you have specific questions, just use the form below and we’ll get back to you ASAP.
The Urban Connection Team