The shortest calendar month of the year closes today and we’re expecting temps in the low 80’s! Good Day Arizona! Chamber of Commerce weather is upon us – at least for a few days.
Well let’s start with a warning. You may see the local news shortly report on news that sells: Yes, that news, in their mind, bad news. Here’s the headline:
Maricopa County Pending Foreclosures Rise 51% in One Month!
True? Yes. Per our impeccable reporting source, the Cromford Report, there are currently 737 pending foreclosures in the county. Last month there were 488 that were pending. That is indeed a 51% increase.
Here’s the non-spin: For some perspective, please observe that last moth we had our lowest level of foreclosures ever!Our highest pending foreclosures on record in the county going back to the grossly memorable year of 2009 was over 51,000 pending foreclosures!
Will these pending foreclosures go to foreclosure sale? Some will. Most not. The worst-case scenario for most of these owners is that they will sell the home and put cash in their pocket due to the amount of equity gained by recent appreciation. The danger for these homeowners is that they may feel like they have to yield to an immediate low-ball offer from investors to buy their home. We cannot stress enough for sellers to get 2-3 opinions from “reputable” and “experienced” Realtor professionals. Hey, that would be us😉!
Well today is the near Ultimate Twosday, 2-22-22. I suppose the ultimate, ultimate Twosday would be 2-22-2222. But, hey, this is close enough.
So here’s your Bodeen chuckle for the week. Let’s go back to 1969, with that one hit wonder from Zager and Evans: “In the Year 2525.”
Enjoy:
Now I’m not implying that our market will reach “normal” in 200 or 503 years, but it won’t be anytime soon, either. We’re showing two charts today with converse directions: The Greater Phoenix Metro current market “median sales price,” and “Days of Inventory.”
First we’ll look at our current median sales price:
According to the Cromford Report, our Median Sales Price continues to rise to a present day $445,500, which is up from $350,000 one year ago – a 27% increase. Will this change? Yes, it will, but the change will look like 2001 to 2004, where there was a 21% change – over three years — or, 7% per year. And it could take a while to commence that line. 6 months? A year? Longer, before that modest annual increase sets in?
Can we begin to see when the market will change? Yes. “Days of Inventory” is probably the best leading indicator we have of a changing market.
Our market will change in favor of buyers as the days of inventory increase. As listings stay on the market longer, this will work in tandem with increased listings on the market, bringing greater supply. Supply must increase! Supply can of course increase due to a number of factors, such as pricing and mortgage rates getting too high. Affordability, or lack of it will bring more listings.
Also, having worked in this industry since the creation of dirt, I’ve seen a few things. Historically, when prospective home sellers believe that that market has hit it’s peak, they will put their home on the market to try and catch the top. This is truer of investors which currently own over 200,000 rentals in Phoenix. If major corporate rental owners liquidated their holdings, we’d see a mass market shift. That will not happen. Investors (landlords) saw rents rise in the 20% plus range. And the rental market is as tight as the buying market. They’ve got a hugely good gig going. Investors are still buying.
“The dream of homeownership has grown more out of reach for many middle-class Americans during the pandemic.” This is the opening line from an article in the Wall Street Journal one week ago. Check out that Article here. The exact title is “Middle Class Gets Priced out of Homes.”
That National Association of Realtors released a recent study, in which the article stated that at the end of 2019, there was one available listing that was affordable for every 24 households in the income bracket of $75,000 to $100,000. By December 2021, the figure was one listing for every 65 households! Per the WSJ, the study “found that housing affordability worsened over the past two years for all but the very wealthiest Americans, and the shrinking number of homes on the market made home buying more difficult in every income bracket.”
Metro Phoenix and Scottsdale becoming unaffordable?
As we’ve been sharing for a while now, Phoenix-Metro is becoming unaffordable with only worse prospects in (at least) the near future. Whereas just a few years ago, we were considered an affordable relocation for companies looking to move here, but that has now all but disappeared. More and more, we will be seeing articles such as: “Phoenix Ranks among the least affordable American Cities.” Check out that Article here.
Less than two years ago, the median sales price of a home in Phoenix Metro was $180 per square foot. Today it is $280 psf. Homes currently under contract continue to show further price increases as well.
To compound matters, the article accurately points out that in many areas, rents are quickly rising also, having made it more difficult for folks to save up for a down payment. This is a cruel reward for prospective buyers wanting to do the right thing to get into a house affordably.
This is certainly true of Phoenix Metro. The double whammy of rent and purchase price increases is truly eliminating any good options for our local middle class.
I’ll fess up. It’s been easy to disparage my former state that I loved and grew up in. Hey, California is an easy target. But to be fair, every once in a while they actually surprise me in coming up with a creative idea to solve a significant problem, in this case SB 9 and SB 10. Now mind you, I’m only saying it’s creative, not necessarily good. Ripe unintended consequences will occur, and they won’t be pretty.
First of all, their significant problem is housing affordability. It’s not. That problem is sending many folks fleeing out of state to places like Arizona. The problem exists for home buyers and renters alike. Part of the problem has been cities restrictive zoning that for years has prevented much needed housing to be built in California.
So, California SB 9 and SB 10 are an attempt to provide additional housing to be built on existing single family lots. Per the San Jose Mercury News, “SB 9 is the most controversial of the two new laws. It allows property owners to split a single-family lot into two lots, add a second home to their lot or split their lot into two and place duplexes on each. The last option would create four housing units on a property currently limited to a single-family house.” Check out the article here.
Included in this new law just recently passed, is a reduction of lot line setbacks to between 0’ and 4’ to enable the new housing to be built. If it’s an empty lot in a neighborhood, it could be split into two lots allowing for two units each on each lot, thereby creating a 4-plex in a community of formerly zoned single family detached. Hmm….
Sounds good – for everyone except the folks who already live in a neighborhood that would be most impacted by the increase in local population density. Let’s say you live in a 30 year old home with a ¼ acre lot. You bought in that neighborhood back then for the large lot size, and spacious elbow room between homes. Well, guess what. The quality of life just changed for you.
Arizona, Phoenix-Metro in particular, will be in the crosshairs of government trying to help solve the severe lack of available housing we now have, and the problem has the very real probability of getting worse. If things don’t change, Arizona’s news will no longer be about myriad folks relocating to Arizona, but we will become an out-bound state for those who can no longer afford to live here. And that would be a loss!
North Scottsdale’s 85262 zip code is home to some of the most prestigious communities in all of Arizona, which include:
Troon North
Estancia
Desert Mountain
Mirabel Club
Carefree Ranch
Pinnacle Canyon
Merit Crossing
Rio Verde
Legend Trail
Candlewood Estates
THIS is “North” Scottsdale! Higher elevations, gorgeous desert, city light, golf, and mountain views show off the beautiful Sonoran Desert. 85262 is one of those zips that many think (dream) about when you mention “north Scottsdale.” Just off the beaten path, it’s still close to amazing North Scottsdale shopping, dining and entertainment in Kierland, Scottsdale Quarter, and DC Ranch.
Desert Mountain, the amazing luxury golf mecca is home to some of Arizona’s most beautiful homes. Rio Verde is getting well known for large acre-plus homesites, rural living, amazing mountain / Four Peaks views, quiet and solitary living in a Covid-Post Covid era.
Troon’s name is all you have to say with nationally acclaimed golf and resort living in one of the desert’s most incredible settings.
Single Family Detached Home Pricing:
Current home prices start at $375,000 up to $19,500,000. The average list price is $2.46M. The average home sale price in the past 6 months is $1.37M. There are good home values under a Million, however, with a sale of one home at $299,000. There are 55 homes currently priced between $375,000 and $1,000,000.
Up to Date 85262 Real Estate as of October 23rd, 2020
Today
Last Month
Last Year
1 Year Change
Active Listings:
340
307
353
-4%
Pending Listings
59
64
44
+34%
Sales Per Month
68
57
27
+152%
Sales Per Year
635
594
549
-%
Months of Supply
5.0
5.4
13.1
– 8.1 Months
Appreciation – Median*
10%
7%
11%
+1%
Average Price – Sales**
$1.19M
$1,173M
$824K
+16%
Median Price – Sales***
$900K
$880K
$818K
+10%
*Annual Median
**Annual Average
***Annual Median
RECORD ARIZONA HOME SALE IN NORTH SCOTTSDALE
Ten Bathrooms? In my opinion, not the best lead-in for this AZ Central article describing the most expensive home sale in Arizona’s history. Being a guy, I’d probably lead with the amazing 17 acre parcel in DC Ranch’s Silverleaf with the 10 car garage, followed by 29,700 Sq Ft
