by MICHAEL BODEEN | Jun 20, 2022 | Bodeen Team Blog, Mike's "Real State" of the Market, North Scottsdale News
Not easily forgotten is the winter of 2020, which emerged the reality of a worldwide pandemic not seen in my lifetime. In February 2020, appreciation in the Phoenix and Scottsdale Area real estate market was nearly 10%. There was a six-year period from 2014 to 2020 that had annual appreciation averaging around 5%. That was a normal market.
And then, the pandemic hit. As you can see by the chart below, right after that February, coinciding with the pandemic, immediately the annual (based on monthly) appreciation dropped in March to 8.5%, April to 6.8%, and May to 4.5%. In the midst of this new pandemic, everyone – yes, everyone, expected this to happen – and worsen.
But then, the incredible unforeseen happened. Our market, as well as most metropolitan markets in the U.S., began to soar. Demand took off. Listing inventory, after a brief increase in that 2020 winter, began dropping. Multiple offers and bidding wars became the normal storyline – everywhere. By October of 2020, the annual appreciation rate based on Monthly Price Per Square foot (PSF) hit 19.1%. In February of 2021, that rate was up to 23%. In April it increased to 32%, and it peaked at 38.4% the next month (May 2021).
One year later, as the pandemic is normalizing, folks are now doing what we thought they’d do at the beginning of the pandemic – sell in droves. More listings have been added (11,845) to the Arizona Regional Multiple Listing Service (MLS) in the past 4 weeks than any other 4-week period in the history of the Phoenix MLS, per the Cromford Report.
We are currently getting 34% more new listings than average every 28 days. If this rate continues, it is estimated that a balanced market will return this August. Some of our cities are close to experiencing that balance now.
All this is good news for buyers. What’s not been good news of course is the escalation of mortgage rates – now in the 6% range. Someone reminded me the other day that my real estate career goes back to the 18% mortgage rates in the 80’s. Of course, the huge difference between now and then is the high price of current housing. 18% mortgage rates, which of course halted real estate sales then, happened when the U.S. home median price was under $90,000.
Are we in a meltdown, or will the market pull up? Our counsel to buyers is to take advantage of more homes on the market to find that right one. When inflation gets tamed and comes down to acceptable levels, this market will again change. When will inflation get tamed? That’s the question before us.
by MICHAEL BODEEN | Jun 14, 2022 | North Scottdale Zip Code Information
The 85255 North Scottsdale Zip Market: What’s Happening Now?
The 85255 seller’s market is retreating from the fevered sales pitch of this past year. Though listings are still less than one year ago, there’s been a considerable increase from last month. Across the board in most all areas and price ranges, listing supply is increasing. In one month the 85255 Zip Code listing supply increased by over half.
Appreciation is showing a 30% increase and 6.5% over last year, but less than the 33.5% from last month.
Considering Buying or Selling in North Scottsdale or the Northeast Valley. Give Mike a call at 602.689.3100 or send an email to: [email protected].
SERENO CANYON RELEASE
Check out Toll Bros new release in Sereno Canyon, a beautiful and natural community in North Scottsdale’s 85255 zip code. Check out the community from this link:
If you would like to fill out the Pre-Application process, be sure to add Mike Bodeen of HomeSmart as your buyer’s agent, if you’re not currently working with a local professional.
Considering Buying or Selling in North Scottsdale or the Northeast Valley. Give Mike a call at 602.689.3100 or send an email to: [email protected].
by MICHAEL BODEEN | Jun 13, 2022 | Bodeen Team Blog, North Scottsdale Schools, Real Estate News
If you’re a Star Wars junkie, like my son and business partner, you might get a chuckle from today’s Snapshot Heading.
If not, then what I’m referring to today is that our Phoenix Metro real estate market is reversing course, cooling its (X-Wing Starfighter) jets from a rabid seller’s market to a potential state of normalcy. And it’s happening rapidly.
The Cromford Market Index, which measures the balance of supply and demand (defined as between 90-110) in our market, in the first week of January, stood at 474 – its peak for the year. Today, less than 6 months later, it has dropped to 237 – exactly by half! And our lightspeed (faster than the speed of light weirdly enough, per Wookieepeida), descent from the heights does not seem to be abating, least not yet.
And before I get myself into more Star Wars vernacular battles with Jonathan, I’d better pull up😉
In related news, the Phoenix Business Journal released an article today (link below) about the dramatic cost-of-living increase in the nation and Phoenix Metro. The cost-of-living index in the Valley has increased over 24% in the last 3 years, far out-pacing the national average of 9.76%. And nationally, as well as locally, the article stated that the “recent surge in gas prices wasn’t accounted for in the report.”
Honestly, there needs to be a retreat or sustained leveling off in housing prices, both rentals and purchases. Yes, as property owners we love to see our home-equity/net worth increase, but on the other side of the equation, buyers and renters could use a break.
“as property owners we love to see our home-equity/net worth increase, but on the other side of the equation, buyers and renters could use a break.”
Jonathan and I were discussing this matter last night, and both of us are concerned that Phoenix and Arizona are on a business growth path that has, and probably will continue to change the affordability landscape for years to come. What we’re seeing is the immensely high rate of growth in new business (e.g., TSMC) and start-ups, plus the growth of many existing businesses (e.g., Intel) throughout the region and state.
Of course, Phoenix and Arizona are not alone. This is a national problem. The highest cost of living increase in the country is Dayton, Ohio. And smaller cities such as Bozeman, MT and Cape Coral, FL, have some of the largest cost of living spikes as well.
But the cost of housing is at the center of our economic universe, and something’s got to give. Real estate balance would be a great place to start.
May that force be with us.
by MICHAEL BODEEN | Jun 6, 2022 | Bodeen Team Blog, Mike's "Real State" of the Market
The first buyer benefit to be occurring amidst the current Phoenix Metro market adjustment is the number of homes rapidly coming on the market, hence, increasing inventory.
Another buyer benefit and market gauge we’ll be looking at a little more closely today are the number of downward price changes occurring in the market. But first the main sales numbers for the month of May:
- Active Listings: 9,439 vs 4,917 last year – up 92.0% – and up 41.1% from 6,688 last month
- Under Contract Listings: 10,249 vs 12,317 last year – down 16.7% – and down 5.9% from 10,880 last month
- Monthly Sales: 8,729 vs 9,663 last year – down 9.7% – and down 6.1% from 9,295 last month
- Monthly Average Sales Price per Sq. Ft.: $303.55 vs $248.81 last year – up 22.0% – and up 0.4% from $302.43 last month
- Monthly Median Sales Price: $475,000 vs $390,000 last year – up 21.8% – and up 1.9% from $466,000 last month
Overall, the market is in full reverse.
First, the supply of homes for sale has risen 42% in just the last month and has almost doubled (92%) from one year ago. Next, sales have dropped almost 10% compared with May of 2021. Listings under contract (currently, the best current stat to observe) are down 6% from last month and 17% versus last year.
The highest lagging indicator, closed sales prices, continue to register amazing gains (hmm, those last two words sound like that great ole hymn but I shall refrain from inserting new lyrics😉). The monthly average sales price per square foot has increased 22% from one year ago and 0.4% from last month – quite substantial still! The monthly median sales price is creeping towards a half million and is currently at $475,000 – a 21.9% gain from last year’s median of $390,000 and almost 2% higher than last month, which was $466,000.
Sellers are now strongly responding to our moving market. Price cuts are now happening at an increasing rate. Last week alone, 1764 properties changed price with a median reduction of $11,000. This is a significant sign of seller determination to get ahead of our changing market. The last week that we’ve had as many price changes was November of 2019.
The great unknown is whether this is a short-lived cycle. The recent substantial rise of mortgage rates in a two-month period is without question bolstering inventory. The buyer window for increasing their home choices may (will?) only last as long as rates remain higher. If inflation begins to cool (note “if”) rates will drop and the fever to jump back into buying will strongly increase, bringing back many multiple offers, and the rise of prices.
So, I believe we’re in a window of opportunity for buyers. If they can swing it and can find that “right” home. Gopherit!
by MICHAEL BODEEN | May 30, 2022 | Bodeen Team Blog, Mike's "Real State" of the Market, North Scottsdale News
I am a blessed man, and how well I know it! I found (fell into) a career in my very early 20’s that I have enjoyed immensely. For sure, it’s had its ups and downs. In fact when Karen and I were married, I had stepped out of real estate for a 9 month period and was never going to go back into commission sales again – EVER! Why? Because I couldn’t make a sale to save my soul. It was a period of sky-high mortgage rates, around 14%, which had come down from a record 18.45% in 1981.
The only way I got back into real estate was because a kind man named Glen Chileski hired me to manage ERA Truckee Tahoe Realty and put me on a salary, with commissions, and overrides. I owe that man a debt of huge magnitude. I got to work in a business that was different every day of the year, presenting numerous challenges, interacting with vastly different people, and it provided for my family.
But oh, the ebb and flow!
A wise King once said, “That which has been is that which will be, and that which has been done is that which will be done. So, there is nothing new under the sun.”
King Solomon could have been talking about modern day stock or real estate markets – particularly now as it relates to the changing housing market and the
numerous career changes that are and will be unfolding in the months ahead.
“Realtor contraction will happen also. It always does when change happens in the industry. I witnessed many leave the business when MLS computerization entered the real estate marketplace in the 80’s taking the place of our beloved real estate books.”
Beginning in 2007, millions of folks lost their job in the Great Recession when we experienced the bursting of the housing bubble. In the years that followed, tens of thousands of foreclosures were happening each year. We Realtors were surviving on doing “short sales.” In all my history of working in this industry, that was the bleakest. Right and left, friends and neighbors were losing their homes. Thousands of Realtors threw in the career towel during that distressing market.
And what of the present? We’re beginning to see large scale layoffs in the mortgage industry as thousands of jobs are being eliminated as new purchase mortgages and refinances fall off the table due to the rising mortgage rates that now exceed 5%. (That last sentence -5%- blows my mind)
Realtor contraction will happen also. It always does when change happens in the industry. I witnessed many leave the business when MLS computerization entered the real estate marketplace in the 80’s taking the place of our beloved real estate books. Now, with low inventory, huge corporate investors buying up homes for rentals, sales are dropping. The reduction of first time and move-up buyers due to higher rates doesn’t help either
The next wave of change is now happening. There is nothing new under the sun! Not even our hot Scottsdale sun!
