March in Phoenix was a month of extremes, but extremes that made sense in a newly-functional real estate market. We saw 12-month lows (number of homes for sale) and 12-month highs (sale-to-list, median home price, median price per square foot) that combine to indicate that the forces of supply and demand are finally at play here in the Phoenix area. That’s little comfort for the buyers who are lining up to buy anything under $200,000 with a roof, but sellers are living large right now.
Below are the key points that demonstrate that for Maricopa County as a whole, but we’ve also broken down the housing market for the entire Valley area here, city by city and neighborhood by neighborhood.
Inventory continues to slide
Every time we think we’ve hit what must be the bottom of the inventory shortage here in Phoenix, the market steps in to prove us wrong. Inventory in March in Maricopa County was down another 3.9% from February, and 40.7% from the previous March. But that’s only part of the story. This time last year only 14% of the homes for sale were traditional sales instead of bank owned. Now we are up to 77% traditional sales. Banks have stopped putting homes on the market.
Just one look at the sale-to-list ratio on single-family homes tells us that buyers are really fighting for those few homes for sale here. The ratio on these homes was at a 12-month high, at 98.9%. As buyers make a run at every reasonably-priced home that hits the market, sellers aren’t finding a reason to budge from their asking price.
Blink and it’s pending
It’s not just that there are fewer good homes on the market, but they’re going under contract much faster. Of the homes sold in March, 42% were on the market less than 30 days, and they sold on average for 99% of the final list price, and 98% of the original list price. The remaining 58%, sold for an average of 94% of the final list price and 93% of the original list price. So even for the homes that took their time to sell, sellers were only dropping 6% of the price in negotiations with the buyer.
Prices gaining ground in the Valley
The good news is that, unlike most markets around the country that are also seeing a huge inventory shortage, the Phoenix area is actually acting like a functional real estate market! Prices here are continuing to adjust upward, based on the low inventory. Supply and demand are at play! The median sale price for a single-family home in Maricopa County in March was $140,000, up 5.3% for the month and 12% for the year.
But couldn’t that just be more high-priced houses selling, rather than prices rising across the board? It’s not! It turns out the price per square foot in Maricopa County is on a similar, but even even smoother skyward trajectory, meaning the price gains are truly across the board. Buyers really are trying to give sellers a reason to sell here!
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