R.O.I. Real State – Residential Newsletter- March 2021
Posted on March 1, 2021
The most significant development this month was the decline in the overall supply-demand index during the past 2 weeks, after peaking at 514.9 on March 11. At the current rate of decrease, demand could reach a normal level within 2 months and drop below normal by June. However, June is also the expected expiration date for many homes in forbearance and the foreclosure moratorium, which could result in supply increasing. Will demand stay constant with potentially increasing inventory and a slight bump in interest rates? Stay tuned.…You can read all the details in the attached R.O.I. Properties “Real State – Residential” newsletter, with additional statistics, market trends and information, but here’s a quick peek at the highlights:
Active Listings: The supply level in the Arizona Regional MLS stopped its decline over the past 4 weeks and stabilized. New listings have been added to the MLS at an average of 2,124 per week since the beginning of 2021; contracts have been accepted at an average of 2,299 per week, with a significant number of them selling before they’re able to be counted in supply. New listings continue to be historically low. Seasonally, this time of year would expect a range of 2,300–2,500 new listings per week. There were 2,700 new listings in week 12 of 2020, a direct result of vacation rentals hitting the market in response to COVID-19 travel restrictions. This year, once the moratorium on foreclosures expires and more homeowners exit forbearance, there could be a similar boost. Like 2020, however, any increase in inventory is not expected to last long, given today’s level of demand: 50% of properties are going under contract within 5 days of listing.
Sales Volume & Price: Currently 49% of all listings in the Arizona Regional MLS are selling over asking price. The average sales price per square foot for March 2021 to date is $232.24, up 24.4% over last March and $0.77 higher than the average list price per square foot (at contract) of $231.47. That is a price ratio of 100.3%, which hasn’t been seen since in decades (if ever) and is the culmination of the long-term disparity between population growth and housing unit growth in Greater Phoenix since 2010. Every price range up to $1M is seeing extraordinary percentages of homes selling over asking price, but the highest levels are between $250K–$400K. The median amount over asking price is currently $10,500, with a range of $1–$700,001. The COVID-19 pandemic severely restricted the ability of homebuilders to add new inventory in 2020, and they are feverishly catching up. Arizona released more state land last year to be used for development, but lumber costs are still extremely high due to an extreme shortage: adding about $24,000 to the cost of the average single-family home in the U.S.