November Market Update
November 13, 2016 - By Morgan Renyer
The weather is finally starting to cool off and fall is officially upon us! Wondering what the real estate market has been up to this past month? Read below for everything you need to know about what has been happening in the Phoenix residential market.
For the month of November, we’ll start by taking a look at how Arizona is doing compared to other states. According to Core Logic’s report, Arizona was one of the 5 states with the furthest to go to reach the height of pricing at the peak of the housing bubble:
- Nevada 31.4% below peak
- Florida 22.5% below peak
- Arizona 22.0% below peak
- Connecticut 19.1% below peak
- Maryland 18.7% below peak
According to the chart to the below, 10 of the 17 cities are showing a deterioration in negotiation power for sellers. This includes the more expensive locations (Paradise Valley, Scottsdale, Fountain Hills and Cave Creek) who have a uniform decline of 7% over the last month. This decline is due to a build up in inventory, which is often seen at this time of year. This gives buyers more choices, as well as more negotiation power.
Active listings declined in Gilbert, Chandler and Tempe, which has helped sellers. The Southeast Valley has seen a smaller increase in inventory than normal for this time of year. Maricopa, Goodyear and Avondale continue to improve, while Glendale, Peoria and Queen Creek have faded a little.
On the other hand, there are more rental listings on ARMLS than there were a year ago. Although 3,360 is not considered a huge number by historical standards, it is larger than 3,313, which is what was seen on November 8, 2015. The lowest point reached was 2,117 on March 14,2016, so we are up 56% in 7 months!
The current monthly average lease price per sq ft for all areas & types is 84.4 cents. A year ago it was 78.7 cents. That is an annual increase of 7.2%, but all of that increase took place between November 8, 2015 and June 3, 2016. We have seen no upward trend in rental rates since May!
This appears to be a change in market conditions that may cause landlords to consider a change of strategy. We should be on the lookout for signs of former rental homes coming onto the market for sale in larger numbers than we have seen for many years.
Fortunately, October was unusually strong for closed sales, but was not equally strong across the geographic areas.
We are showing 7,103 closed listings in ARMLS for October across all areas & types. From public records in Maricopa County we count 8,409 single family and condo/ townhouse sales. The Southeast Valley cities of Chandler, Gilbert and Mesa made a powerful contribution to the total, as did Goodyear, Buckeye and Sun City. Paradise Valley, Cave Creek & Tolleson grew by large percentages, but their unit numbers are relatively small. Phoenix, Scottsdale, Sun City West and Queen Creek, did not participate strongly in the trend.
On the bright side, the pricing charts are looking positive from a seller’s perspective. But, not so much in the case of medians. The average price and average price per sq. ft. charts have gained a new momentum in the last few weeks. Buyers may be dismayed, but sellers should look at the chart below if they need cheering up: