What about inventory's impact on the market?

We have been seeing drops in inventory for the low end for a very long time and active counts were again down by 26% at the end of December. This shortage of supply has made it hard to keep sales volume growing and indeed quarterly sales slipped by 2%. In the mid-range, supply was down slightly but sales volume grew by 35% so there was still upward pressure on pricing. At the high end over $500,000 we saw increased supply, but sales volume jumped by 48% so here too we saw much stronger appreciation than we were experiencing 12 months ago.

Overall we saw a very healthy increase of 7% across the entire market. However we now see all price ranges participating, not just the low end. In fact the high end slightly out-performed the mid-range.

The top ZIP codes for appreciation in average $/SF between 4Q 2015 and 4Q 2016 were:

1. Mesa 85201 +16.9%
2. Mesa 85204 +13.4%
3. Mesa 85213 +11.6%
4. Mesa 85210 +10.4%
5. Chandler 85249 +9.5%
6. Gilbert 85233 +9.0%
7. Gilbert 85298 +8.6%
8. Queen Creek 85142 +8.3%
9. Sun Lakes 85248 +7.8%
10. Mesa 85208 +7.7%

The weakest appreciation was seen in:

1. Phoenix 85044 -0.4%
2. Mesa 85202 +1.3%
3. Mesa 85205 +1.9%
4. Gilbert 85297 +2.0%
5. Phoenix 85045 +2.3%
6. Phoenix 85048 +2.8%
7. Mesa 85206 +3.1%
8. Gilbert 85296 +3.4%
9. Tempe 85283 +3.5%
10. Tempe 85281 +3.6%

ACTIVE LISTING COUNT LONG TERM GRAPH BELOW

Is Arizona in a Bubble? 1.11.2017

As clients start their search in the new year everyone seems to be surprised at the prices and interest rates they will be facing.  The natural first question is...

"Are we in a bubble?!?"

This is a fair assessment but as always I follow up this question and the "how's the market?" question with..."It Depends".

Which city makes a huge difference in appreciation.  Even within each city specific communities and subdivisions have much different year over year changes.  Couple this with price range, amenities, upgrades, stories etc. and you'll get a very different answer from me.

The broad brush is that today's median prices are about 20 to 25% below the peak of the market (2006). There are notable exceptions e.g. PV remains 30% below the peak, while 'next door' Arcadia has cruised past the peak by 10%! But if live in these markets this is not news. As always, location and price range are the major variables.

Sample Median Price trends from select communities:

Glendale

Chandler

North Scottsdale

Paradise Valley

Scottsdale (Downtown)

Arcadia

You will come to your own conclusions based on the market segments you work. We can definitely see that in the lower price ranges prices are trending up at a modest pace; then you have the sizzling hot fashionable locations of downtown Scottsdale and Arcadia where price almost doesn't seem to matter; and then the mid-upper range north Scottsdale / Carefree / Fountain Hills that seem relatively flat, but stable.

With inventories relatively balanced against supply we would expect more of same going into 2017 and our high season. But we shall see.

December Market Update - One for the record books!!

How does December 2016 compare to all the other Decembers we have measured over the years?

• Monthly Sales Count = 7,191 - 5th highest (after 2010, 2004, 2011 and 2009)
• Annual Sales Count = 90,027 - 3rd highest (after 2005 and 2004)
• Average Sales Price = $282,067 - 4th highest (after 2006, 2005 and 2007)
• Median Sales Price = $225,000 - 4th highest (after 2006, 2005 and 2007)
• Monthly Average Price per Square Foot = $144.79 - 4th highest (after 2005, 2006 and 2007)
• Annual Average Price per Square Foot = $141.43 - 4th highest (after 2006, 2007 and 2005)
• Dollar Volume = $2.028B - 2nd highest (after 2005)

So, thanks to the 5th strongest sales count and the 4th strongest pricing, we just had the second best December for dollar volume in the last 16 years.

Cromford Daily Observation