Although the supply-demand index fell significantly, it will be barely noticeable on the street; the market simply cooled to where it was in late January/early February of this year. There will still be multiple offers and closings over asking price. Two notable changes occurred in the past month: Demand entered the normal range, and the supply index stopped dropping and has stabilized at 78% below normal. Extremely low supply continues to be the major driver of rapid appreciation. Demand is the less important of the two factors until supply rises to more normal levels and the majority of homes are no longer receiving multiple offers…You can read all the details in the R.O.I. Properties “Real State – Residential” newsletter (just click on the image), with additional statistics, market trends and information, but here’s a quick peek at the highlights:
Active Listings: The supply level listed in the Arizona Regional MLS has been stable (but still extremely low) for two months now. New listings have been added at an average of 2,318 per week, and an average of 2,323 homes per week have gone under contract in the past 7 weeks. By price range, active listings between $400K–$1M have seen a gradual increase in supply over the past 2 months while the $2M–$3M price range just stopped dropping 3 weeks ago. Overall, every price point is significantly lower in supply than this time last year, which was the peak inventory count due to the pandemic. New home permits for 2021 through February are up 20.4% compared to last year and are at the highest level since 2006. Pinal County single-family permits are up 45%, with significant increases in Coolidge, Maricopa and Florence. Maricopa County single-family permits are up 15%, with major increases in Glendale, Buckeye, Goodyear, South Phoenix, and Queen Creek.
Sales Volume & Price: Sales over asking price now represent 55% of all sales closed so far in April through the Arizona Regional MLS. The average sales price per square foot is $242.11, up 31% over April 2020 and 3.7% higher than last month’s final measure of $233.54. This monthly appreciation rate results from a combination of a higher concentration of luxury listings closing escrow and sales price to list price ratios over 102% under $500K. Listings between $250K–$400K saw 62.5% of sales recorded over asking price, with a median of $14K over list and a maximum of $117K. The luxury market over $1M has also seen a surge in sales over asking price at 28% so far in April, up from just 10% in January. This month, the Arizona Office of Economic Opportunity announced that the state’s labor force has officially risen higher than it was prior to the pandemic, and at 1.8%, Arizona’s population growth was 4 times larger than the U.S. growth rate of 0.4%. While this explains a good deal of the demand surge in Greater Phoenix, it doesn’t fully explain the surge in luxury sales this year. We typically look to signs within the stock market, corporate profits and exchange rates for demand indicators, but it’s possible that Bitcoin and cryptocurrencies could be fueling demand as well.
Originally shared via roiproperties.com newsletter. Click here to read full newsletter.
