By Vince Scarano, Redfin Phoenix Agent
There’s an absolute frenzy of activity here in the Phoenix housing market, driven by an enormous and enormously-frustrating lack of inventory. Just over 11,000 homes are on the market right now in Phoenix proper. Compare that to more than 55,000 homes back in November 2007. While it seems to be leveling out, it looks like there are some things we’ll have to get used to in Phoenix:
- Sellers are in control: At nearly every price point in this market, there is more demand than supply. An offer at 5%-10% below list price most often won’t even command a seller’s counter offer. The prevailing mindset among new buyers is that they’ll be able to name their price and there’s nothing further from the truth and we’re starting to see prices take this into account.
- Speed is the key: If the comps we review show their dream home is priced appropriately, it is time to write the offer. If not, there will be another offer before us, usually within 24 hours. Savvy buyers comb Redfin.com religiously for new homes hitting the market, and will contact us immediately to tour and make an offer. Sometimes, the offer precedes the tour and hours can make a difference. Multiple offers are the norm.
- The double-shock of selling: Seller are having a tough time accepting that their home’s value is sometimes less than 50% of it’s pre-recession value. They are equally shocked to hear a home in a popular area of town that is priced appropriately right now will likely have multiple offers, sometimes within hours of the listing hitting the MLS.
Overall, the data we’re seeing lines up perfectly with what I’m seeing and hearing from clients: There are great opportunities here in the Phoenix market; Just be prepared to act quickly and offer realistically.
Inventory Remains Near 12-Month Lows
The story in Phoenix in January was about prices jumping, but sellers not being convinced to list their homes for sale. The number of homes for sale in Phoenix was up 2.6% from December, but still down 40.5% from January last year, to 20,962.
Given the pace of sales and the number of homes on the market, it would take 3.21 months to sell through the current inventory, a term known in the industry as “months of supply.” In a market balanced between buyers and sellers, we’d expect to see 5-6 months of supply, so this represents a slight advantage for sellers in Phoenix, but a more balanced market than we’ve seen since March 2011, when there were 3.23 months of inventory on the market.
Sales drop by 16% in January
We’ve all heard that real estate is seasonal, and one look at the chart of the number of home sales reinforces that. There were 6,536 sales in Maricopa County, representing a sharp decrease of 15.5% since December 2011, but up 2.7% since January 2011. This is largely due to the fact that not many people are out looking for homes during the holiday season, and so there are less people ready to buy early in the year.
Maricopa County Median Sale Price Up 1.6% for the Month
The median sale price for a single-family home in Maricopa County was $130,000 up 1.6% from December 2011 and up 4.1% year over year from January 2011. The per-square-foot price was also up 1.4% month over month, to $73, and up 9.0% year over year.
Redfin’s housing market data combines public records, local multiple listing services, for-sale-by-owner and other verified sources. The data is validated by Redfin analysts to ensure it is comprehensive and accurate. Redfin publishes these reports each month on or around the 10th of the month, for the previous month. As a tech-focused broker, Redfin is the only company with access to this level of data.