• Quick video explanation this week.
Tell me in the “Comments” what you think.
For U.S. real estate market analysis,
go to Real Estate Decoded.
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 September 6, 2020 but the graphs will be continually updated.
8 Responses to Geek Dive into Phoenix Real Estate Market – September 2020
Great analysis. It makes sense. People are getting offers for their house before it is even listed for sale so they go directly to under contract. It seems to me we will continue to be in an ‘Up Market” for some time. What I look at are other cities in the West (Seattle, Denver, Salt Lake) and how they have done over the past 2 years. All are in that “manic” phase of an expansion. We seem to have just entered that phase. As long as interest rates stay low and we gradually recover from the pandemic I think we are in good shape.
Steve, as long as interest rates stay low – and right now it looks like they could stay low for years – I expect demand to be good. Might even see the low rates capitalized into higher house prices over 2-3 years, already started.
Hi John, This is my first comment on your Blog. I think you have analyzed this data correctly. That based upon my experience and analysis over the last 50 some years. A similar time for me occurred in San Diego about 1974 as I recall. The market was so hot appraisers couldn’t find comps. Last months sales were out of date by an amount as to not be accurate. Love your stuff !
Best Regards, Carbon
Carbon, Tell me more about the 1974 San Diego market. I don’t know the story. Did some research recently on the Texas 1980ish boom and bust but that’s as far back as I go.
Up here in the Pacific NW sometimes new construction is not listed or is listed when it closes and shows 1 DOM in the MLS. Is the condo market reacting the same as the single family market in the Phoenix/Scottsdale area? Sometimes these can be 2 distinct markets. Thanks for your analysis. I enjoy your work.
Dave, Good point. I wonder if I can find out how many solds have 1 DOM and trends. I’ll check. Would be nice to quantify it. I focus on SFD in these but comparing it to condos would be valuable. Condos shouldn’t be affected by the COVID-19-I-don’t-want-to-live-so-close-to other-people-and-I-need-more-space-for-working-at-home market. So if condos are way up too, that suggests how much the low interest rates are ruling the market.
First comment here. What’s your recommendation for how to play this market in 2021? We are looking at Phoenix as an investment property market hoping for a CAP rate of 5-6%+ – are those times basically done?
Partha, thanks for the comment. That’s the question, isn’t it. I don’t have it figured out but here are two factors I’d consider. 2021 will likely be a very strong year for appreciation due to the fall in interest rates in 2019 and 2020. After 2025, the demographics are less favorable. 1) We start to have a few less people hitting first-time homebuyer age each year instead of a few more. 2) Baby Boomers start to die off. Phoenix, however, has seen very strong in-migration since the Great Recession. (Phoenix thought strong in-migration was a birthright but in-migration tanked during the Great Recession & I don’t know of anyone who predicted that. Today, however, construction is about half the size (percentage-wise) of the Phoenix economy as it was then so a real estate bust wouldn’t bring down the rest of the economy as much, hit in-migration as much.) If in-migration continues strong, rents should continue strong. Phoenix rents have been increasing strongly during the pandemic recession. Anyway, those are some factoids I’d consider when estimating longer term CAP rates.
Comments are closed.