Strength back in the Phoenix area real estate market...

February 16 - Since the Super Bowl ended we have seen the liveliest two weeks for demand for a long time and we can see several areas with very strong numbers of listings under contract compared with this time last year.

Market Segment (within Greater Phoenix)	Under Contract 2/16/14	Under Contract 2/16/15	Growth %
All of Greater Phoenix	9,393	10,288	10%	healthy overall growth 2015 over 2014
Normal Listings Across Greater Phoenix	6,657	8,432	27%	strength in normal listings
Distressed Listings Across Greater Phoenix	2,736	1,858	-32%	distressed listings fading in significance
Normal Single Family (Greater PHX)	5,517	7,063	28%	single family resurgence
Normal Condo (Greater PHX)	971	1,187	22%	condo slightly behind single family
Normal Under $100,000	558	486	-13%	little demand under $100K
Normal $100,000 to $150,000	1302	1427	10%	average
Normal $150,000 to $175,000	716	940	31%	strong
Normal $175,000 to $200,000	664	919	38%	very strong
Normal $200,000 to $250,000	937	1,416	51%	exceptional demand growth
Normal $250,000 to $300,000	721	948	31%	strong
Normal $300,000 to $400,000	741	1,088	47%	exceptional demand growth
Normal $400,000 to $500,000	369	480	30%	strong
Normal $500,000 to $600,000	180	241	34%	strong
Normal $600,000 to $800,000	183	207	13%	average
Normal $800,000 to $1,000,000	94	97	3%	little growth
Normal $1,000,000 to $1,500,000	97	100	3%	little growth
Normal $1,500,000 to $3,000,000	80	69	-14%	weaker than last year
Over $3,000,000	15	14	-7%	weaker than last year

The high end luxury market is fading while the regular luxury market is showing just a little growth over last year.


The most popular ranges are $150,000 to $600,000, which is good news for developers and for sellers of existing homes. Here we see a very sudden upswing in buyer interest that wasn't there in January.
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Mid Month Pricing Update and Forecast:
     
Each month about this time we look back at the previous month, analyze how pricing has behaved and report on how well our forecasting techniques performed. We also give a forecast for how pricing will move over the next 30 days.

For the monthly period ending February 15, we are currently recording a sales $/SF of $130.82 averaged for all areas and types across the ARMLS database. This is 0.5% above the $130.11 we now measure for January 15 and represents a small increase in average pricing, as forecast. In fact our forecast range was $129.13 to $134.41 with a mid-point of $131.77. Last month's forecast was 95 cents above the actual price per square foot measured, but well within the forecast range.

On February 15, REO sales across Greater Phoenix (all types) averaged $83.12 per sq. ft. (down 1.5%). Pre-foreclosures and short sales averaged $98.43 (down 11.3%) while normal sales averaged $135.44 (up 1.3%). The market share of normal sales dropped from 89.6% to 89.1% over the last 31 days. REOs gained market share from 6.2% to 6.5%. Short sales and pre-foreclosures also rose from 4.2% to 4.4%. Despite the increase in distressed home share, the 1.3% rise in the average price per sq. ft. of normal sales carried the day.

On February 15 the pending listings for all areas & types showed an average list $/SF of $130.80, 0.4% above the reading for January 15. Among those pending listings we have 84.4% normal, 6.7% in REOs and 8.9% in short sales and pre-foreclosures. This is a large decline in the share for distressed homes, which will be positive for pricing as we move into March. The average pricing for pending listings within Greater Phoenix on February 15 in each category was: $137.77 for normal, $92.31 for short sales & pre-foreclosures and $86.03 for REOs. The figure for REO sales is higher than last month, but those for short sales & pre-foreclosures and normal sales are lower.
Our mid-point forecast for the average monthly sales $/SF on March 15 is $132.18, which is 1.0% higher than the February 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $129.54 to $134.82. Our forecast this month is therefore for a slight move higher in sales pricing over the next month. This also happens to follow a pattern which is common in most years where pricing moves higher during the spring season.


We are seeing much stronger upward movement in pending listing counts and under contract counts than we did last month or last year. We therefore expect good demand during the spring selling season and no significant downward pressure in pricing.
Supply numbers are still weaker than last year at this time, so the market is shaping up quite nicely for sellers as long as they are patient. If the current trends continue and spread through more market segments then we could see prices regain a little upward momentum later in the year.