There has been a lot of chatter lately about the real estate market taking a turn and many are wondering if another crash is coming. While we don’t have a crystal ball to look into the future, one thing we do know is that sales are slowing in Phoenix.
There are many theories about why, and even more about what it mean. I’ll address my thoughts at the end of this blog, but for now some market numbers that you should find interesting.
Let’s start with the first graph I developed for you after researching information from the ARMLS. The following is a derived from a search of the Phoenix Metro area (roughly Anthem to Maricopa, Wickenburg to San Tan Valley). The criteria was for single family homes from 1500-3000 square feet with 3+ bedrooms and 2+ bathrooms that closed in the months of April through July. I thought that would be a good sampling.
As you see in this initial graph of sale prices year over year, on the surface this looks really good. We seem to be up to somewhat normal prices for a healthy market, and steadily growing month to month.
In the next graph, I split the sales into “half months” to see what the trends were last year vs. this year in relation to sales price fluctuation. As you can see, the prices tend to stay strong reflecting growth and stability. This shows that buyers have been willing to pay what the market has demanded, even with the rise in pricing. Again, this seems to be healthy for the market.
In the graph below we find the issue that some are wary of with the current market. The reaction has been mixed as to what this means. When looking at “Units Sold” we have seen a sharp decline in the month of July. While the summer heat does slow sales a bit, this July seems to be an extreme shift.
Take a look at the July number year over year for total units sold.
In 2017 the total number of homes sold in the month of July was 3,669. That was 401 fewer homes than in June 2017.
This year (as of about 4p on July 31st) we show 1,816 homes sold in the month. That 2,084 fewer sales than the month of June 2018. So, why did the sales slow so drastically this year?
As I said, there are many theories. Some feel as if it is the heat that is preventing buyers from diving in to the market. Others feel that the political climate effects peoples willingness to make a major purchase. There is a school of thought that many folks bought a home in the downturn at a great price, they have an unbeatable interest rate and no desire to move. Still more are running around screaming that the “sky is falling”! I personally don’t buy into that theory because the nations economy is strong. That is something that could not have been said in the crash of ’08
Personally, I feel that pricing has reached a peak. After all, your home is only worth what buyers are willing to pay for it and they don’t seem to want to pay the current asking prices. (Note: This is just an opinion…like I said, I don’t have a crystal ball.)
Whatever the case I HIGHLY recommend that if you are considering selling your home, NOW IS THE TIME! The last thing you want to find yourself doing is chasing a down turn in the market. Nothing will frustrate you more as a seller than reducing your price repeatedly because values are declining right under your feet.
In addition, IF this is a market downturn and you sell as it turns, you should get a decent deal on your next home purchase. Timing is everything!
Curious what your home is worth? Call me for a FREE comparative market analysis (CMA).
Please also think of me when you hear anyone talking about buying or selling a home. I am NEVER too busy for you and your referrals. (602) 818-6065.