End Of March Phoenix Market Update

Dated: 03/29/2018

Views: 45

End of March Phoenix Market Update


March 18 - Are conditions improving for buyers? No. They are improving for sellers though. The overall listing success rate has just reached 84.1%. This is the highest reading since July 2005.

In the last 20 years there have only been 4 months with a higher listing success rate - between March 11, 2005 and July 10, 2005. Those were also months where almost half the closed transactions did not even hit the MLS.

Ten years ago in January 2008, the listing success rate reached an all-time low of 20.4%. Remember how bad that felt when 4 out 5 listings expired or were cancelled?

Sellers should enjoy the current conditions. They will not last forever.

March 19 - A new record high was set for residential sales through ARMLS at the end of February. 20450 N 108th Pl., Scottsdale 85255 closed for $17,500,000. The previous record was $15,650,000, set as recently as last December.

This property was originally listed at $24,500,000 in 2011 when newly constructed and the listing was canceled in 2017 after 2011 days, having had its price cut to $19,950,000 in 2016. It was then relisted at $17,995,000 in June 2017. Cumulative days on market was 2,261 (6.2 years).

It boasts 5 kitchens, 2 elevators and 8 garages and was constructed by custom home builder Linthicum.

Congratulations to the listing agents Mike Domer & Delania Munro and the selling agent Frank Aazami.

DC Ranch Community must be delighted to receive the $87,500 community transfer fee.

March 20 - The primary characteristic of the current housing market in Greater Phoenix is a lack of inventory. Part of the problem is that, despite having 5.5% more agents, we are getting 2.5% fewer new listings than last year.

Measuring year-to-date as of March 18:

  • Greater Phoenix has seen 2.8% fewer new listings than last year

  • Out of

    Area

    new listings have grown by almost 8% (not much use to people looking for a home in Greater Phoenix)

The dwelling type that is worst affected is Single Family Detached - these are down 3.4%. Condos and townhomes are down only 1.1% and mobile and manufactured homes are up 7.4%.

Here are the cities that have seen the biggest drop in new listings:

  1. Laveen - down 17.3%

  2. Fountain Hills - down 15.8%

  3. Sun City West - down 11.0%

  4. Avondale - down 10.1%

  5. Gilbert - down 7.4%

  6. Gold Canyon - down 6.3%

  7. Mesa - down 6.1%

  8. Tempe - down 4.8%

  9. Sun City - down 4.7%

  10. Casa Grande - down 4.7%

Buyers might want to know where new listings have grown since last year, giving them more opportunities:

  1. Paradise Valley - up 12.4%

  2. Florence - up 11.6%

  3. Cave Creek - up 10.2%

  4. Queen Creek - up 4.8%

  5. Anthem - up 2.0%

That is the complete (short) list.

So to get to see more new listings than in 2017, buyers will have to either plan to spend more than $1 million in PV, or head up to the northern hills in Cave Creek or Anthem or the far southeast in Queen Creek and Florence.

Everywhere else there has been a drop in new listings since year. The biggest 2 cities for listings are Phoenix and Scottsdale, where new listings are down 2.5% and 2.6% respectively, close to the average for the area as a whole.

March 23 - At 1,593, single-family permits in Maricopa & Pinal counties were down slightly in February from January, but up 8.7% from February 2017. The new home market continues to expand, but it is revealing to look back at the permit counts from 20 years ago. February 1998 saw 2,557, which was unexceptional at the time.

Year to date numbers for 2018 show dramatic changes from 2017:

Place

2018 YTD

2017 YTD

Change

Phoenix

611

373

+64%

Buckeye

355

301

+18%

Un-inc. Pinal County

336

255

+32%

Maricopa

225

172

+31%

Peoria

222

259

-14%

Gilbert

214

187

+14%

Goodyear

213

176

+21%

Un-inc. Maricopa County

204

69

+196%

Surprise

194

85

+128%

Queen Creek

149

226

-34%

Scottsdale

109

100

+9%

Chandler

67

40

+68%

Mesa

65

376

-83%

Mesa has dropped from first place to 13th and with Chandler at low levels in both years and Queen Creek going backwards, this does not bode well for the availability of new homes in the Southeast Valley. New home buyers in that area will find more if they head further out to either Maricopa or San Tan Valley.

San Tan Valley provides the bulk of permits classified under Unincorporated Pinal County. With the effort to incorporate San Tan Valley now stalled and the town of Queen Creek annexing more parts of Pinal County that San Tan Valley "claims", the geographic borders of this part of the valley are going to get even more confusing than they already are.

Phoenix is now growing faster than it has for 10 years, measured by new home permits, while the ambitious city of Buckeye is now number 2 in the valley for year-to-date permits and one of the 10 fastest growing cities in the USA.

March 26 - The multi-family permit count for February was 782, bringing the count for the past 12 months to 9,950 units. This highlights the continuing strength of multi-family construction. Unlike the single-family market, multi-family is fully recovered back to pre-crash levels.

However the multi-family market is dominated by far fewer cities. Over the past 12 months the counts are as follows:

  1. Phoenix 4,472

  2. Tempe 1,608

  3. Chandler 1,602

  4. Mesa 706

  5. Scottsdale 630

  6. Peoria 456

  7. Goodyear 348

  8. Surprise 135

  9. Gilbert 115

  10. Unincorporated Pinal County 104

  11. Paradise Valley 43

  12. Fountain Hills 6

  13. Guadalupe 5

  14. Apache Junction 4

March 27 - The S&P / Case-Shiller Home Price Index is published today and covers sales that were recorded between November 2017 and January 2018.

Here is how the 20 urban areas stack up for the month to month change in their index:

  1. San Diego 0.76%

  2. Seattle 0.73%

  3. Atlanta 0.68%

  4. Denver 0.66%

  5. Miami 0.61%

  6. Las Vegas 0.60%

  7. Los Angeles 0.57%

  8. Tampa 0.45%

  9. Portland 0.43%

  10. San Francisco 0.39%

  11. Charlotte 0.38%

  12. Phoenix 0.34%

  13. Dallas 0.24%

  14. Boston 0.21%

  15. Detroit 0.12%

  16. Minneapolis 0.09%

  17. New York 0.04%

  18. Cleveland 0.03%

  19. Chicago -0.04%

  20. Washington -0.44%

Phoenix has slipped from 9th place last month to 12th this month, but beat the US national average which was only 0.05%

Taking the year over year view we see the following:

  1. Seattle 12.9%

  2. Las Vegas 11.1%

  3. San Francisco 10.2%

  4. Denver 7.6%

  5. Los Angeles 7.6%

  6. Detroit 7.6%

  7. San Diego 7.4%

  8. Portland 7.1%

  9. Dallas 6.9%

  10. Tampa 6.7%

  11. Atlanta 6.5%

  12. Charlotte 6.0%

  13. Minneapolis 5.9%

  14. Phoenix 5.9%

  15. Boston 5.3%

  16. New York 5.2%

  17. Miami 4.0%

  18. Cleveland 3.5%

  19. Washington 2.4%

  20. Chicago 2.4%

The national average was 6.2% and Phoenix fell slightly below that. For those who are concerned that Phoenix prices are rising too fast, consider that we remain below average for the country in absolute prices and in the rate of increase.

March 28 - Opendoor, the largest iBuyer in Phoenix, purchased another 245 homes during February. This is a huge increase over February 2017 which saw only 65 purchases. Here are a few things we can deduce from the recorded deeds and affidavits of value.

  1. Total expenditure was $60.2 million. ($13.3 million 2017)

  2. Average

    purchase price was $245,624. ($205,332 in 2017)

  3. 91% of purchases were single-family homes, while 9% were condos or townhomes. In February 2017 the split was 97% and 3%.

  4. 90% of purchases were in Maricopa County, while 10% were in Pinal. This means Maricopa is relatively stronger for Opendoor than Pinal. February 2017 saw a 75% / 25% split which favored Pinal County.

  5. Maximum price paid was $450,000. Opendoor avoids higher priced homes as a deliberate strategy. The maximum in February 2017 was $324,200.

  6. Average

    price paid was $131.02 per sq. ft. in February 2018. The average price paid per sq. ft. was $111.16 in February 2017. This is an 18% increase, so clearly

    Opendoor

    is having to move more upmarket in order to increase its volumes, thanks to the scarcity of sellers at the low end.

  7. Average

    age of a home purchased was 1997.

We have to assume that the price stated is the gross purchase price and this has not been reduced by any of the seller-paid fees. If anyone knows any different, please let us know too.

The Greater Phoenix market had 9,297 sales during February 2018, so Opendoor acquisitions represented 2.6% of the total market. Last year saw a 0.8% share.

Unlike most fix and flip operations, Opendoor files its Affidavits of Value with the intended use "to be used as a non-primary or secondary residence". Most investors use the option "to be rented to someone other than a qualified family member". This means an analysis of the data will count Opendoor purchases as second home purchases and not as investor purchases. We will all therefore under count investment activity and overcount second home activity. Once the home is resold it will be captured as a flip.

Since Opendoor`s HQ is in San Francisco, this tends to overstate our counts of out-of-state purchases.

Most of the recording for Opendoor is handled by Fidelity National Title with Chicago Title picking up most (but not quite all) of the remainder. Of course, both are part of the FNF corporation.

The bulk of the lending on these purchases (51%) is from Deutsche Bank, though Goldman Sachs is also mentioned (9%). However, 35% of affidavits state that the home was purchased with all cash. 5% were financed by a "private lender".


Related Links

Mid March Phoenix Market Update

Early March Phoenix Market Update

from: www.Homes-Phoenix.com

Latest Blog Posts

AZ Home Buyer Grants

What Are AZ Home Buyer Grants?Many home buyers in Arizona search for home loan grants. Grants are given on a federal, state or local level. When they're available, they are a great tool to

Read More

Phoenix Real Estate Market March 2018 A Quick Look Back

Median Sale Price up $20,000 YoY (March 2017)   -   17% of Sales are Closing Over Asking Price What Does It Mean?For Buyers: We are seeing the percentage of sales with

Read More

Homeowner Equity Levels At All Time Highs

Homeowner Equity Levels At All-Time HighsHomeowners tappable equity levels are at $5.4 trillion; the highest level on record.Estimated $5.4 trillion of tappable equity is now available to

Read More

Arizona Home Plus Down Payment Assistance

 THE ARIZONA HOME PLUS PROGRAM IS ONE OF THE BEST HOME BUYER ASSISTANCE PROGRAMS IN THE COUNTRY. IT IS OFFERED THROUGH THE ARIZONA HOUSING FINANCE AUTHORITY AND PROVIDES DOWN PAYMENT

Read More