Market Conditions Phoenix Area

Here is an excerpt from the Cromford Report on the Phoenix Metro area market conditions:

Market Summary for the Beginning of November

Starting with the basic ARMLS numbers for November 1, 2017 and comparing them with November 1, 2016 for all areas & types:

  • Active Listings (excluding UCB): 18,646 versus 21,028 last year – down 11.3% – but up 2.7% from 18,161 last month
  • Active Listings (including UCB): 22,403 versus 24,862 last year – down 9.9% – but up 2.8% compared with 21,783 last month
  • Pending Listings: 5,646 versus 6,050 last year – down 6.5% – and down 6.9% from 6,065 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 9,403 versus 9,884 last year – down 4.9% – but up 0.2% from 9,388 last month
  • Monthly Sales: 7,379 versus 7,078 last year – up 4.3% – but down 1.8% from 7,515 last month
  • Monthly Average Sales Price per Sq. Ft.: $150.35 versus $144.39 last year – up 4.1% – and up 0.6% from $149.45 last month
  • Monthly Median Sales Price: $245,000 versus $229,000 last year – up 7.0% – and up 1.7% from $241,000 last month

The supply of active listings has increased less than 3% over the past month, a smaller percentage than in 2016. New listings have been arriving at a slightly lower rate during October 2017 than in October 2017. We still have too few homes for sale at the low and mid range and too many for sale at the top end. Consequently prices have been rising quickly at the bottom end, rising moderately for the mid-range and falling moderately at the high end. You can see this clearly in the annual appreciation chart by price range.

Supply has fallen since 2016 across much of the Southeast Valley and is lower than normal in much of Pinal County. The effects in the rest of the Phoenix area are more muted.

The total sales count for October 2017 was fairly weak. Although it was up 4.3% compared with 2016, October this year had 10% more working days (22) than October last year (20 days). So the rate per working day declined by 5% making October the weakest month so far in 2017 for year over year daily sales volumes. With supply so tight it is often difficult to detect a fall in demand but sales, pending and AWC counts all indicate a slight weakening of demand.

As we suggested last month, pricing resumed its upward trajectory in October, especially for the median sales price. The average price per sq. ft. improved too, but was up only 4.3% compared with October 2016. This is a healthy increase but less than we have been seeing in year over year measurements for prior months.

The proposed changes to US taxation that are currently being discussed are widely seen as negative for the housing industry, both new and re-sale. This is because they will reduce the financial advantage of owning a home compared with renting. More details on this effect will be forthcoming in one of our daily observations.