Slowdown Is Here!!

Comparing the annual non-distressed single-family sales in Greater Phoenix between November 1, 2017 and October 31, 2018 with the previous year we find that the annual sales rate increase was 2.0% and the annual average $/SF rose by 7.3%.

The top-performing areas for appreciation were as follows:

1. Florence & Coolidge (85128 & 851320 - up 15.6%
2. Sky Harbor South (85040) - up 13.9%
3. Far West Phoenix (85037) - up 12.1%
4. I-10 and I-17 (85009, 85015, 85017, 85019, 85031, 85033, 85035) - up 11.8%
5. Maricopa (85138 & 85139) - up 10.7%
6. Southwest Phoenix (85043) - up 10.3%
7. Tolleson (85353) - up 10.2%
8. Sky Harbor North (85006, 85008, 85014, 85034) - up 10.1%
9. El Mirage (85335) - up 10.0%
10. South Buckeye (85326) - up 9.8%

The bottom performing areas for appreciation were as follows:

1. Gold Canyon (85118) - up 3.1%
2. South Tempe (85284) - up 3.5%
3. North Goodyear (85395) - up 3.8%
4. Downtown Phoenix (85003, 85004, 85007) - up 4.1%
5. Northeast Phoenix (85050, 85054) - up 4.1%
6. North Surprise (85387) - up 4.5%
7. North Phoenix (85083, 85085, 85310) - up 5.0%
8. North Scottsdale (85255, 85259, 85262, 85266) - up 5.1%
9. South Scottsdale (85250, 85251, 85257) - up 5.3%
10. Anthem (85086) - up 5.4%

For the first time in many years, the monthly dollar volume today is lower than it was this time last year. This confirms the market slowdown and indicates that the drop in monthly sales volume is now having a greater impact than the annual rise in average sales price.

The last time this crossover occurred was in December 2013. On that occasion dollar volume remained lower than the prior year for 9 months but re-crossed in September 2014 and has remained above the prior year from then until today.

If history is any guide, the dollar volume is likely to remain lower for the rest of 2018 and part of 2019. However it is unlikely to remain lower for the whole of 2019. In fact we can gauge the severity of the current downturn by how long it takes to cross back over the prior year's dollar volume. We are unable to make any specific prediction for this date, but we can see that the current downturn has so far proven to be less dramatic than the one that occurred in 2013.