“So how’s the market?” you ask.
“Great!” I respond, but then quickly add; “Wait which market would you like to know about?”
While the Phoenix Metro Market is incredibly nuanced from neighborhood to neighborhood, we can divide the market here into three main categories of price ranges when determining the overall health of the market.
$250,000 and Under:
Amazing! Well, if you are a seller that is. If you are a buyer in the price range… well… I am so, so, so very sorry. Supply was low in march of 2015. It was a seller’s market and buyers were fighting each other for a place at the bargaining table. Now in March 2016, it has escalated even beyond that! The supply has dropped 20% since then, and as a result prices are appreciating at 8% annually!
Now sellers love this, but truthfully, we can’t call this a healthy market. Phoenix Metro needs a fresh supply of homes in this price range to benefit the buyers in that price range, for whom buying a home is essential in building personal financial security. While builders have again become active with a relative gusto in our fair city, they seem religiously intent on building homes that start in the 300k, not helping our buyers on the lower end.
Between $250,000 and $500,000:
This price range we find to be really more a picture of overall health here in the valley. The supply of listings is going up overall, but so the demand as well. We have more listings on the market and more deals being done than this time last year. Sellers have experienced a moderate 2.6% annual appreciate rate as a result of this. Nothing to write home about… and yet still much better than your 401k has done this year 😉
$500,000 and Over:
In the words of a Michael Orr, the man who is responsible for all of this raw data, this market is “…Wallowing in too much supply…” The supply in this price range has increased a whopping 15% since this time last year. Demand is actually up a bit since last year, but unfortunately not enough to counterweight the greater increase in supply. Some of the stats in this price range have been skewed (inadvertently I’m sure) by some analysts to suggest an appreciation here, but truthfully it looks as if we have actually seen a price depreciation of 5%.
The bulk of our market is still healthy when we remember that the 500k+ price range represents only about 8% of the entire Phoenix Metro market.