Scottsdale and Phoenix Real Estate Market Update, April 2015

    With strong sales across most price ranges and geographic areas, March 2015 not only met but exceeded the expectations of home sellers in the Phoenix and Scottsdale areas. The increase in demand that we saw in February has spread to other areas and has moved upmarket as well.

    Phoenix & Scottsdale Real Estate Market Update - April 2015

    Here are the basic ARMLS numbers for April 1, 2015 relative to April 1, 2014 for all areas and types:

    • Active Listings (excluding UCB): Down 15.7% from last year (22,303 vs. 26,442 last year)  and down 4.8% from last month (22,303 vs. 23,541 last month)
    • Active Listings (including UCB): Down 11.6% from last year (26,436 vs. 29,907 last year) and down 3.2% from last month (26,436 vs. 27,315 last month)
    • Pending Listings: Up 7.1% (7,853 vs. 7,333 last year) and up 17.1% from last month (7,853 vs. 6,709 last month)
    • Under Contract Listings (including Pending & UCB): Up 11.0% from last year (11,988 vs. 10,798 last year) and up 14.3% from last month (11,988 vs. 10,483 last month)
    • Monthly Sales: Up 17.6% (7,855 vs. 6,680 last year) and up 35.2% from last month (7,855 vs. 5,812 last month)
    • Monthly Average Sales Price per Sq. Ft.: Up 0.9% from last year ($131.95 vs. $130.74 last year) and up 1.3% from last month ($131.95 vs. $130.27 last month)
    • Monthly Median Sales Price: Up 5.5% from last year ($200,000 vs. $189,500 last year) and up 2.6% from last month ($200,000 vs. $195,000 last month)

    If you are selling your home, these numbers are welcomed news. Buyers, however, are facing the prospect of prices increasing if these conditions prevail for a few more months.

    Buyers, on the other hand, may face increased prices if these trends continue over the next few months.

    The 11% increase in “Under Contract Listings” from last year’s numbers highlights the extent of the improvement in the housing market because the simultaneous reduction in distressed listings keeps a lid on this measure. The same is true of the sales improvement.

    Now let’s take a look at the normal listings across the Greater Phoenix area:

    • Active Listings (excluding UCB): Down 14.1% from last year (19,835 vs. 23,096 last year) and down 6.0% from last month (19,835 vs. 21,103)
    • Active Listings (including UCB): Down 9.2% from last year (23,148 vs. 25,493 last year) and down 3.9% from last month (23,148 vs. 24,075 last month)
    • Pending Listings: Up 16.4% from last year (6,726 vs. 5,776 last year) and up 18.9% from (6,2726 vs. 5,656 last month)
    • Under Contract Listings (including Pending & UCB): Up 22.8% from last year (10,039 vs. 8,173 last year) and up 16.4% from last month (10,039 vs. 8,628 last month)
    • Monthly Sales: Up 23.2% from last year (7,174 vs. 5,825 last year) and up 38.8% from last month (7,174 vs. 5,170 last month)
    • Monthly Average Sales Price per Sq. Ft.: Down 0.3% from last year ($134.78 vs. $135.18 last year ) but up 0.6% from last month ($134.78 vs. $134.04 last month)
    • Monthly Median Sales Price: Up 4.5% from last year ($207,000 vs. $198,050 last year) and up 2.0% from last month ($207,000 vs. $203,000 last month)

    Looking at these numbers, we see that the median sales price and the average price per square foot are behaving differently, signaling a change in the mix. What’s happening is that the buoyant mid-range is keeping the average price per square foot down but pushing median price up.

    We also see the huge growth in the usage of UCB to replace the “Pending” status for normal listings. We estimate 60% of normal UCB listings are really “Pending” and falsely marked as UCB. Last year at this time the number was 55%, and the year before that 40%.

    The price ranges showing the greatest improvement in demand-over-supply compared to their long-term average are:

    1. Over $3M +64%
    2. $250-275K +35%
    3. $225-250K +32%
    4. $200-225K +28%
    5. $2-3M +26%
    6. $600-800K +23%
    7. $1.5-2M +22%
    8. $400-500K +15%
    9. $275-300K +14%
    10. $175-200K +12%
    11. $125-150K +10%
    12. $300-350K +7%
    13. $1-1.5M +5%
    14. $150-175K +4%
    15. $350-400K +2%
    16. $500-600K +2%

    These numbers are for single family homes only. They are based on comparing the current contract ratio with the long-term average ratio for that price range. Contract ratios decline dramatically as you look at higher price ranges, and this applies in all market conditions.

    While the price ranges over $800K were looking tired at the end of February, they have certainly come to life in March. This is especially true for the ultra-luxury segment. There were 29 homes over $3 million under contract as of April 1 compared with just 16 last year. This is the most we have seen since 2007.

    A few ranges are not looking so hot: below $100K is experiencing low supply and even lower demand while $800K to $1M is stuck at its long-term average.

    Right now, we’re seeing the first signs of some extra supply coming along. In the last week, the rate of new listings has ticked up slightly. This is natural as a stronger market tends to bring out additional sellers. If this upward trend continues, it will help keep the market from getting too frenzied.

    After a relatively quiet 2014, the Arizona real estate market has certainly become interesting and exciting once again.

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