November 2020 Market Update

Here are the basics - the ARMLS numbers for November 1, 2020 compared with November 1, 2019 for all areas & types:

  • Active Listings (excluding UCB & CCBS): 8,682 versus 14,525 last year - down 40.2% - but up 7.4% from 8,101 last month
  • Active Listings (including UCB & CCBS): 13,901 versus 18,322 last year - down 24.1% - but up 4.5% compared with 13,305 last month
  • Pending Listings: 7,862 versus 5,919 last year - up 32.8% - but down 1.7% from 7,999 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 13,081 versus 9,716 last year - up 34.6% - but down 0.9% from 13,203 last month
  • Monthly Sales: 9,992 versus 8,037 last year - up 20.5% - and up 3.6% from 9,641 last month
  • Monthly Average Sales Price per Sq. Ft.: $207.37 versus $174.14 last year - up 19.1% - and up 4.3% from $198.84 last month
  • Monthly Median Sales Price: $332,000 versus $285,000 last year - up 16.5% - and up 1.6% from $326,800 last month

The flow of new listings remained strong until late October but has started to fade noticeably over the last week. Since we are already very short of supply, this does not bode well for buyers who are likely to be fighting each other over a dwindling list of homes for sale during the last 2 months of the year. With demand at a very high level, especially for the normally quiet fourth quarter, the market is even more out of balance than it was last month.

Closed sales were over 20% higher than in 2019 during October. This is even more remarkable given that in 2019 October had 23 working days, 1 more than in 2020. With the average price per square foot up over 19% from last year, the dollar volume is exceptionally high at $4,272 million, up from $2,786 million last year. And last year we thought we had a strong market. We are running out of superlatives to describe the state of the current market.

Average and median prices are running away skywards, but some of this is fuelled by a sales mix which increasingly favors upscale properties. During October we saw 37 closed listings over $3 million. This is not only the highest total for any October in history, it is the highest total for any month in history. The average for all months since 2001 is 9 and in October 2019 we counted 10.

The size of the market below $300,000 is shrinking fast, constrained by lack of supply and by the fact that last year's home at $270,000 is now priced well over $300,000. However any home priced under $300,000 is likely to see hordes of buyers.

Is there any sign of the upward surge in pricing losing pace. In a word - No.

At this time last year we had no idea of the impending pandemic, but unless something similarly surprising happens in the next few months, the housing market in Greater Phoenix is unlikely to stop rising.

 For Buyers:
A common complaint in the resale market is “there’s nothing for sale”.  However from July through September, the Realtor® community added 30,340 brand new listings to the Arizona Regional MLS and sold 27,746, leaving just 8,203 remaining listings for sale.  That makes this 3rd Quarter the 2nd best in Greater Phoenix history for closings, falling just 436 sales short of 2005.  If that’s not impressive enough, there are another 13,502 properties currently under contract and scheduled to close in the next 30-45 days; up 36% from this time last year.  With this information we can conclude that there is plenty for sale, but many listings are simply not in Active status longer than 24 hours in order to be counted.  Getting the supply count to rise right now is like trying to fill a bathtub when the drain is wide open.

Over half of all listings that went under contract in the 3rd Quarter were Active for only 9 days or less prior to contract.  To quote the movie “Spaceballs”, that’s ludicrous speed!  As exhausting and stressful as it is for buyers and their agents, supply and demand measures indicate prices in Greater Phoenix will continue to rise well into 2021. Hopefully the short-term pain will lead to long-term gain for those who ultimately win a successful contract.

For Sellers:
Appreciation has accelerated significantly since June of this year.  The median sale price is up 18% since last October, but the current measure of $329,900 is up 12% from where it was just 4 months ago at $295,000. While that’s exciting for sellers, the speed at which homes are selling is causing some to worry they will not find somewhere to go after their home closes.  As a result, Realtors® are dusting off rarely used seller contingency addendums stating that any accepted contract will be contingent on the seller finding a home themselves prior to close. 

Compared to last year, sellers are asking 15-20% more for their homes in all price ranges between $150K-$500K. Between $500K-$1M, list prices are up 9-13% and 3-8% for price ranges over $1M.  The highest percentage of sales over asking price in the last 30 days are occurring between $200K-$400K with a measure of 34-45%.  While that’s a high percentage, it’s not the majority of sales. Most properties are still closing at or below asking price. However for those who did go over asking price under $400K, most winning bids were within $7,000 of list.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2020 Cromford Associates LLC and Tamboer Consulting LLC

 

If you, or anyone you know, is looking to buy or sell, Please let me know!

 

Troy Holland

Cell:  480-773-5792

Email:  Troy@Sell4Free-AZ.com

Web:  www.FlatFee-NoFee.com 

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Information provided courtesy The Cromford Report.