Here is why sellers are often aggravated with selling their home. A lack of education and knowledge about the realities of the market. I dork out on this research to better serve my fellow agents and clients. Where is your house??
We often look in the newspapers and see an overall annual appreciation AVERAGE and think we are all seeing the advertised 8% appreciation. That couldn't be farther from the truth. Remember how the average is calculated...it is not indicative of your house. Below is a quick breakdown by price range to better gauge your home's actual appreciation.
We can all thank the few luxury homes that are selling for the recent jump in the overall market but certainly the majority is not seeing the same result.
September 17 - If we examine the pricing as recorded in Maricopa and Pinal County Recorder offices for May through July in 2013 and 2014, we see the following changes in the average price per square foot:
| Price Range | Change in Average $/SF |
| Below $100K | 6.8% |
| $100K-$125K | 6.9% |
| $125K-$150K | 7.1% |
| $150K-$175K | 4.8% |
| $175K-$200K | 3.9% |
| $200K-$225K | 4.6% |
| $225K-$250K | 4.3% |
| $250K-$275K | 4.2% |
| $275K-$300K | 2.8% |
| $300K-$350K | 6.4% |
| $350K-$400K | 3.4% |
| $400K-$500K | 2.6% |
| $500K-$600K | 3.8% |
| $600K-$800K | 3.4% |
| $800K-$1M | -2.5% |
| $1M-$1.5M | 4.3% |
| $1.5M-$2M | 9.7% |
| $2M-$3M | 17.6% |
| $3M & Over | 2.9% |
Note that the strongest price advances were for:
- $2M-$3M 17.6%
- $1.5M -$2M 9.7%
- $125K-$150K 7.1%
The overall change was 8.0%. However only two price ranges exceeded the overall percentage and most were well below that figure. Two effects are driving the overall number to be high:
- fewer distressed transactions
- low end price ranges have far lower volumes than last year
If we excluded distressed transactions the table looks like this:
| Price Range | Change in Average $/SF |
| Below $100K | 6.4% |
| $100K-$125K | 4.9% |
| $125K-$150K | 5.7% |
| $150K-$175K | 2.8% |
| $175K-$200K | 2.6% |
| $200K-$225K | 3.4% |
| $225K-$250K | 3.4% |
| $250K-$275K | 3.1% |
| $275K-$300K | 1.4% |
| $300K-$350K | 5.3% |
| $350K-$400K | 2.5% |
| $400K-$500K | 2.4% |
| $500K-$600K | 3.9% |
| $600K-$800K | 3.3% |
| $800K-$1M | -3.5% |
| $1M-$1.5M | 4.1% |
| $1.5M-$2M | 10.0% |
| $2M-$3M | 17.4% |
| $3M & Over | 2.9% |
Between $150K and $1.5M the increases in average $/SF are fairly small over the year, averaging 3.3%. Below $150K the average change in price per sq. ft. was 6.5%. Above $1.5M the average change was 10.2%.
So although the headline change is 8%, for most homes between $150K and $1.5M, the actual increase was just 3.3%
Interestingly, the range $300K-$350K showed strength while $800K-$1M showed weakness. We might have expected the $300-350K range to be weak because of the reduction in the FHA loan limit, but this turned out not to be the case.
September 14 - If we divide the average sales price by the average final list price we get a useful guide to how strong the market is. Expressing the result as a percentage is most common, but we must remember that the range is not great. In the last 14 years the minimum has been 93.82% (Feb 5, 2009) and the peak was 99.55% (Jun 5, 2005). The long term average is 96.88% and we have just dropped below that average in the last 3 days. This is a sign that the market is starting to cool slightly again at it approaches a balance between supply and demand. The highest reading in 2014 was on September 2, just 2 weeks ago, so the cooling trend is fresh and yet to prove its significance. However it is running counter to the direction of the Cromford® Market Index so we need to keep a close watch on it.
