Phoenix Real Estate Market Update – July, 2012

It has been a very LONG time coming, but WE ARE HERE. Sure, a little bit here; a little bit there, however nothing recent was ground breaking news or indicated much of anything other than tax breaks do work. Today, the reality is different and is making BIG news in the Phoenix real estate market – and (…finally!) the information is credible!

In a nutshell, the average price per square foot of homes sold has moved UPWARD at an average of 35% since May 2011. Price per square foot is the most accurate short term tracking number. 35% is a stellar number by any standard, in any industry, however particularly so as the national news is still reporting declines in housing values for Phoenix, Scottsdale and the Phoenix Metro real estate market. This frustrates me (and many of you). How do the national media sources – many of whom are not licensed Realtors nor do they LIVE in our market – effortlessly toss figures around on a topic which must be determined solely on OUR marketplace, utilizing OUR data? This is both catastrophic and insulting to Arizona residents. The media can call me anytime for the FACTUAL numbers. I digress…..

Let’s review the FACT: the Phoenix Real Estate Market price per square foot is up by an average35% since May, 2011. That is pure fact based entirely on OUR market data and expertise in Arizona real estate. What does that mean for the home Seller or Buyer in this market?

SELLER:
The Phoenix real estate market has greatly improved. For those of you “on the fence” from selling due to stale and inaccurately reported home values, it is time to check current pricing in your neighborhood (I will do that for you anytime, just send me an email with your address). Does this indicate every home has gone up 35%? Absolutely not. Price point has to do with the movement in values. The lower prices (for example $450,000 and below) show the most significant price appreciation. Above $500k we see a different picture with price per square foot suffering less of a drop during the downgrade in real estate values (starting in 2008) and less upward movement today, however still UP.

Another factor is the decreased number of new listings (inventory) coming on the market. This is one of the factors contributing to the price rise – reduced supply. This is very telling. The number of new listings coming on the market continues to hit record lows since 2011 (when the statistic was first tracked). This drop in supply is affecting the number of sales – Phoenix single family home sales are down 18% compared to 2011 the same time of year. Mesa sales are down 10% and Glendale is down 15%. All of this due to the decline in available inventory. However,Scottsdale is up 5% over last year. Because Scottsdale homes are more expensive on a per square foot basis, this is affecting the monthly average appreciation merely by placing higher priced homes in to the mix! So although appreciation is on average 35% since May, 2011, that number may be a little bit higher given the drop in lower priced sales and the increase in the higher priced sales. We need more inventory of homes to continue price stimulation.

Your most prudent and responsible method to determine the current market value of your residence is to insist on a Market Analysis from a competent Realtor (such as myself..). Forgetchecking Zillow.com and the others. Outdated and stale. The value of my personal residence on Zillow was completely inaccurate; it sold for far more than what was suggested on these types of websites. Given market value is ever-changing at the moment, a “range of value” for your home is probably the best way to determine pricing without actually placing your home on the market (which is another smart way to get a reality check). Make no mistake, however; “riding it out to see what happens” is not in your best interest. Demand for living in our beautiful state continues to be attractive to home buyers, whether due to a job change, retirement, or the love of our coveted winter weather. Homes are no longer “sitting on the market” for months (or sometimes years) as in the recent past. Sellers are learning quickly and embracing the reality – moving past the “oh, our home value will go up to $XX as it was in 2006” mindset. Do any of us want to recreate the financial nightmare we are climbing out of to start all over again? Not me (and I’m a Realtor who makes a living on high prices!) – and I would hope you agree.

BUYERS:  Phoenix Real Estate Market prices today are likely lower than tomorrow’s values…inching up at a quick pace. As a Buyer, be prepared for the frustration that goes with rising values – limited supply and a Seller’s market. Today, homes are receiving multiple offers. Asking prices in the lower price ranges in particular, are merely starting points as most offers will be above the list price. If you don’t want to play in a bidding war, please understand this: avoidance now in this market and the competition for homes indicates that you are willing to pay more down the road (which you will) for the benefit of being the only bidder. One of my listings just a week ago was on the market for 5 hours and received 6 offers – all above asking price. Even after contract acceptance, I had 2 more back up offers. How happy was the Seller? How happy was the Buyer with the increased price? You get the picture…

Rising prices at some point will quiet the demand somewhat. When will that occur? I can’t predict the future (and no, the national sources cannot either). What I will say to that is this: Buyers need to buy NOW and Sellers need to get off the fence NOW and do your homework. Both of these actions will continue to stimulate our market and the positive trend we are in.

Looking to sell: contact me. Looking to buy: contact me. Simple as that. No pressure, no stress, no calling and emailing you every week with a message to drive you crazy. I do not and will not work that way. This is an exciting time for all of us; the American dream of homeownership is back in full swing. I look forward to assisting you, whatever your needs.

It’s a good life!

John

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