First, the new July stats & then the weekly data.
Phoenix Real Estate
According to the local MLS, from June to July, the median price of all homes sold in metro Phoenix went up 3% from $305,000 to $315,000. And according to the Cromford Report, the median price of single-family homes sold went up 3%, from $325,000 to $336,000.
Cruel Summer (for Phoenix Home Buyers). I’m reluctant to say this but the numbers seem to be saying we’re in a mania. Look what happened to prices (green line) when the inventory of houses for sale (red line) hit these levels in 2004. To make matters worse, the population of metro Phoenix is about 40% higher today than in 2004 so inventory is really more like late 2004. That was right before house prices escaped earth’s orbit. I can’t imagine that happening again… but then again, I didn’t expect it to happen back then either.
Autumn. I do EXPECT the market to be slightly less crazy a month from now as we enter the slower autumn market.
2021. Unless a lot more homeowners start selling this fall, the high season next January-June will be nuts. By next year, however, I expect many eviction moratoriums will have run out and most mortgage forbearance programs will be over or winding down. But whatever impact ending those programs will have on the market, some of it won’t be felt until many months later.
Mortgage Rates. I feel confident that mortgage rates will remain crazy low for many, many months. Did “Lower for Longer” become “Lower Forever”?
Roving Bands of Loan Officers? Next year, after everyone has already refinanced, will we see roving bands of mortgage loan officers crisscrossing the countryside selling some new and amazing mortgages like they did in 2005-2007 after home sales peaked? Remember those amazing, new Pick-A-Pay mortgages?
If you have any ideas why, please leave a comment at the bottom of this post. Thanks!
For U.S. real estate market analysis,
go to Real Estate Decoded.
The Weekly Data
Still in Phase 3 (Flat – Not Worse, Not Better) of the Covid-19 real estate market. I expect the number of houses hitting the market to remain a bit higher than last year and the number of sales to be similar to last year for the next couple of months or longer.
New Listings. The number of houses hitting the market has been running above 2019 since early July. (FYI, the latest week is always revised up.)
For Sale. Almost HALF of 2019 and has been that way for 2 months.
Under Contract. Still running high.
Solds. But the number of houses sold isn’t running high. Solds are similar to 2019 at this time.
I can’t figure out why solds aren’t higher given the high number of houses under-contract (compared to 2019). It may just be that the mortgage and title companies are so overwhelmed with business that it’s taking them longer to process all the files.
Tell me in the “Comments” what you think.
This information can vary a lot in different parts of metro Phoenix. Your real estate agent can find the data for your specific city or zip code at The Cromford Report.
Note. This post was written on August 23, 2020 but the graphs in this post will be continually updated.
4 Responses to Cruel Summer for Phoenix Home Buyers (Apologies to Bananarama)
I think with Covid and low mortgage rates few will be selling. Who is going to buy a bigger house when they could lose their job. It’s easier to refinance to a better rate and just put in a pool. Seems to be a trend I’m seeing with my friends. In November 04 prices went up before the big explosion of prices in 05. I wonder if prices go up when they should be flat if this will tell us when we’re close to seeing a peak?
I’m pretty sure this is caused by the low interest rates. I just signed a contract on a house that will be built. My interest rate will likely be less than 3%. The cost of buying (interest, taxes, insurance, HOA, and maintenance) is still less than the cost of renting because of the interest rate. Don’t get me wrong, this can easily go awry. For instance, I thought for sure that the private market would push mortgage rates up regardless of the Federal Reserve’s actions, but that has not happened.
Congratulations on the house! I think a lot of the benefit of lower rates goes to buyers like you who buy in the first months after rate fall. As time goes on (it takes up to 3 years) the lower rates are converted into higher home prices so later buyers don’t benefit from the fall in rates 2 or 3 years earlier.
For years, it seemed like there was a dumpster on most blocks in my neighborhood. Maybe people, like you suggest, are remodeling instead of moving. And to your point about lower interest rates, while lower rates make it cheaper to buy a better house, it also makes refinancing & remodeling more attractive, too.
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