Here it is....Year over Year Apprciation.

Here are the significant ZIP codes with the highest rise in average sale price per square foot between Q1 of 2016 and Q1 of 2017. All dwelling types are included:

1. Phoenix 85012 - up 26.5% to $222.87
2. Phoenix 85051 - up 19.0% to $106.40
3. Casa Grande 85194 - up 18.8% to $117.90
4. Phoenix 85040 - up 18.7% to $101.88
5. Phoenix 85009 - up 18.2% to $105.29
6. Phoenix 85016 - up 16.5% to $231.50
7. Arizona City 85123 - up 16.1% to $80.24
8. Phoenix 85035 - up 16.0% to $104.58
9. Wickenburg 85390 - up 15.8% to $152.69
10. Mesa 85201 - up 15.1% to $126.69
11. Glendale 85307 - up 15.1% to $113.39
12. Mesa 85213 - up 14.6% to $138.77
13. Surprise 85387 - up 14.6% to $150.95
14. Avondale 85323 - up 13.7% to $105.13
15. Peoria 85345 - up 13.6% to $120.04
16. Glendale 85306 - up 13.5% to $128.80
17. Mesa 85202 - up 13.5% to $134.10
18. Phoenix 85028 - up 13.1% to $190.71
19. Florence 85132 - up 12.3% to $89.35
20. El Mirage 85335 - up 11.5% to $106.42

We see entrants from the central valley, the west, the southeast and Pinal County in this list.

The bottom ranked ZIP codes for price appreciation between Q1 2016 and Q1 2017 are:

1. Carefree 85377 - down 9.7% to $217.25
2. Scottsdale 85262 - down 7.9% to $252.85
3. New River 85087 - down 4.1% to $134.78
4. Tonopah 85354 - down 3.6% to $77.11
5. Phoenix 85004 - down 2.6% to $278.54
6. Waddell 85355 - down 0.5% to $110.44
7. Scottsdale 85259 - down 0.2% to $223.69
8. Phoenix 85042 - up 0.1% to $119.81
9. Phoenix 85085 - up 0.2% to $139.82
10. Scottsdale 85258 - up 0.6% to $222.94

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It's becoming an old saw, but you can't look at this information without seeing the fairly direct correlation (based on location and generally speaking) between the high demand / relatively low supply of lower-end properties versus the lower demand and relatively high supply of upper-end properties. 

And then the caveat that all of you who search for that perfect property know - the truly great properties (competitively positioned) are hard to find and therefore sell at all price points, as there is always competition for 'the best'.

BTW, if you don't see the zip code you're interested in (e.g. 85018 Arcadia shown below) above you can easily and quickly email me and I can provide that to you.

Sales Growth Q1 2016 - Q1 2017

Let us try and get a picture of the sales growth that occurred in Q1 of 2017 by comparing it with Q1 of 2016.

For all property types within Greater Phoenix, we saw an overall 13.6% growth in closed listings from 13,214 in 2016 to 15,008 in 2017. Looking at dollar volumes, these grew by 21.3% from $3.6 billion to $4.4 billion.

The significant ZIP codes with the most growth in dollar volume were:

1. Wittmann 85361 - up 199%
2. Eloy 85131 - up 104%
3. Youngtown 85363 - up 93%
4. Surprise 85378 - up 88%
5. Phoenix 85031 - up 84%
6. Phoenix 85012 - up 76%
7. Glendale 85302 - up 74%
8. New River 85087 - up 71%
9. Glendale 85307 - up 66%
10. Avondale 85392 - up 65%
11. Phoenix 85085 - up 60%
12. Mesa 85201 - up 58%
13. Peoria 85383 - up 55%
14. Avondale 85323 - up 54%
15. Mesa 85202 - up 53%
16. Phoenix 85040 - up 52%
17. Waddell 85355 - up 52%
18. Mesa 85215 - up 51%
19. Phoenix 85028 - up 47%
20. Phoenix 85033 - up 47%

This list is dominated by the West Valley, particularly the Northwest Valley.

The following significant ZIP codes failed to participate in the overall trend in dollar volumes:

1. Mesa 85203 - down 19%
2. Chandler 85226 - down 9%
3. Phoenix 85053 - down 7%
4. Phoenix 85013 - down 6%
5. Phoenix 85042 - down 5%
6. Fountain Hills 85268 - down 4%
7. Cave Creek 85331 - down 4%
8. Queen Creek 85142 - down 2%
9. Phoenix 85004 - down 2%
10. Phoenix 85029 - flat

By "significant" we mean ZIP codes with at least 20 sales a year or an annual dollar volume of over $10 million.

For the Northeast Valley, we see growth in dollar volume as follows:

1. Scottsdale 85257 - up 36%
2. Scottsdale 85251 - up 33%
3. Scottsdale 85260 - up 29%
4. Rio Verde 85263 - up 29%
5. Carefree 85377 - up 28%
6. Scottsdale 85258 - up 27%
7. Scottsdale 85259 - up 25%
8. Phoenix 85016 - up 24%
9. Phoenix 85054 - up 20%
10. Scottsdale 85255 - up 20%
11. Scottsdale 85262 - up 13%
12. Scottsdale 85250 - up 11%
13. Paradise Valley - up 11%
14. Scottsdale 85266 - up 6%
15. Scottsdale 85254 - up 6%
16. Phoenix 85018 - up 5%
17. Fountain Hills 85268 - down 4%
18. Cave Creek 85331 - down 4%

Here we see the dominance of South and Old Town Scottsdale.

There are several ZIP codes that grew dollar volume but failed to grow average price per square foot. Carefree 85377, Scottsdale 85262 and Scottsdale 85259 all fall into that category. We will look at the Q1 price movements by ZIP code tomorrow.

South East Valley - Killing it!! - Market Update

Cromford Daily Observation - When we look at the market for single family homes over $500,000 we see the following changes in the quarterly average price per sq. ft.

Area	Average $/SF Dec 2015 - Feb 2017	Average $/SF Dec 2016 - Feb 2017	% Change
West Valley	$172.13	$165.02	-4.1%
Phoenix	$231.84	$230.62	-0.5%
Northeast Valley	$355.87	$352.71	-0.9%
Southeast Valley	$163.90	$173.57	+5.9%

The Southeast Valley sticks out like a sore thumb and has done for several months now. This is the only large area where homes over $500,000 have been selling for much higher average prices per sq. ft. than last year. There are certainly a few spots in the Northeast Valley and Phoenix that have done the same, such as Arcadia and Old Town Scottsdale, but when we consider the larger areas, these favorable trends are dragged down by the weak price trends in North Scottsdale, Paradise Valley, Fountain Hills, Carefree and the Biltmore District. The $/SF ratio between the northeast and the southeast has closed from 2.17:1 to 2.03 :1 over the past 12 months.

Again restricting our analysis to homes over $500,000 we can find some pretty steep rises in the quarterly average price per sq. ft. in the following southeastern ZIP codes:

• Mesa 85213 - up 26% from $131.68 to $165.85
• Gilbert 85298 - up 19% from $150.29 to $178.37
• Mesa 85207 - up 11% from $168.59 to $187.86
• Tempe 85284 - up 6% from $182.27 to $193.26
• Gilbert 85234 - up 6% from $161.58 to $171.78

All of these areas offer the buyer a good choice of large luxury style homes at relatively cheap prices, luxury homes for the budget conscious, if you like. Since this has become a visible phenomenon over the past 6 months, I wonder if there is a correlation between this favorable price trend and the creation of high-tech jobs in the Southeast Valley particularly along Rural Road. The jobs pay above-average salaries and for lower-end luxury home buyers who care about getting the maximum house for their money (and living close to a freeway so they can get to work easily), the Southeast Valley has been looking pretty inexpensive for the last several years. Of course that advantage could erode if prices continue to rise faster than the Phoenix area as a whole. As you can see in the table above, there is still a big price gap between the southeast and the northeast (and Phoenix), so the southeast still has a lot of room to run before its price advantage is gone.

Increasing supply...does this mean price slowing?

Today we  look at the ZIP codes with the highest growth in supply since Jan 1.  We still have consistent months of increases before these areas start to see price increases level off but as we all know.  When Supply increases....Price slowing comes next.

1. Phoenix 85009 - up 73%
2. Phoenix 85004 - up 45%
3. Scottsdale 85250 - up 32%
4. Phoenix 85035 - up 32%
5. Fountain Hills - up 30%
6. Phoenix 85007 - up 27%
7. Mesa 85212 - up 25%
8. Scottsdale 85266 - up 23%
9. Wittmann 85361 - up 22%
10. Phoenix 85045 - up 21%
11. Sun City West 85375 - up 21%
12. Phoenix 85048 - up 21%
13. Rio Verde 85263 - up 20%
14. Phoenix 85053 - up 20%
15. Gilbert 85297 - up 19%
16. Tempe 85284 - up 19%
17. Phoenix 85006 - up 19%
18. Phoenix 85003 - up 18%
19. Phoenix 85050 - up 18%
20. Phoenix 85018 - up 18%

Generally we are seeing the largest growth in supply in the more expensive parts of town. Geographically, Central Phoenix, Ahwatukee and the Northeast are getting plenty of new supply.

Interesting that 85035 is up while neighboring 85031 is down. The same applies to 85297 and 85296 and also 85284 and 5283.

The highest growth in Pinal County is for Maricopa 85139 (16%) and San Tan Valley 85140 (10%).

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