The Phoenix Metro residential real estate market continues to slog along…supposedly. What’s interesting is that when we compare now with the past few years, the pace of the market has slowed because there are a lot less sales. Why are there a lot less sales? The main difference is that the investor gold rush has slowed. Now that the investor market has cooled its jets, what we’re left with is a “traditional” market.
So what does our traditional market look like? Fewer sales. Longer market times. Conservative annual appreciation rates. Oh, you mean like most of the rest of the country? As I’ve mentioned many times in the past, what most often has described the Phoenix and Scottsdale real estate market is radical, frenzied, hurried. Adjectives such as conservative, moderate, and subdued have seldom described this market, but this is where we currently find ourselves.
Much of the rest of the country is also in a lull and many cities are experiencing decreasing prices. We are currently through our 24 month price run up, and now in moderation mode, but NOT decreasing in value, in fact still slightly increasing.
The good news for Sellers is that even though demand has remained low over the last 6 months, creating a mild buyer’s market, the supply is quickly shrinking. Even in just the last 30 days we have seen a dramatic decrease in the amount of homes available. As I’ll explain more below, this is mainly due to a lack of new listings, probably sellers reticent to try selling in the recent buyer’s market. As a result, we are back in the balanced zone, though probably not for long. This is Arizona after all.
NEW PHOENIX-METRO LISTINGS AT 14 YEAR LOW
In a recent analysis of new listings hitting our market, Michael Orr of ASU and the Cromford Report has compared the first two weeks of July 2014, to the same two weeks for each of the previous 14 years going back to 2001, and states that new listings are at their “lowest” point since then. July 2014 registered 3568 new listings. When compared to previous years, the next lowest listing total was 4027 back in 2012. In 2001, for example, there were 4021 new listings. The high point of 6651 new listings was in 2006. So, if you’ve been considering selling your home, now might be an opportune time.
CANADIANS LOVE ARIZONA REAL ESTATE – CHINESE? NOT SO MUCH!
We’ve long known that Canadians love to buy real estate in Arizona. For a while last year, Canadians were the largest out of state buyers even surpassing Californians. With the booming economy of China, some have wondered if the Chinese will commence a buying spree in Arizona. Well, according to the National Association of Realtors, that is not likely in the near future. I quote from NAR:
There is little to no evidence of a large amount of buying from China in Arizona. It seems from all the evidence that the Chinese, many of whom are wealthy people looking to diversify where they keep their assets, are focused on the most expensive places to find housing, namely the fashionable areas of California. The median price paid by a Chinese buyer, according to NAR, is $523,148 for the
period April 2013 to March 2014. This is far higher than the buyers from other major countries and more than double the median for Canadians which was $212,500. When it comes to the Chinese buyer, our affordability seems to be a disadvantage. Canadians, however, appreciate a bargain and also our overdoses of sunshine.
2013 PROFILES OF HOME BUYERS AND SELLERS
So what do we know about the Buyers and Sellers of 2013? Who’s bought? How old were they? How much money did they make? What was the typical size of their home purchased? These and a multitude of other data are available to Realtors who opt to purchase it. Some of the findings include:
Characteristics of Home Buyers
– Typical buyer was 42 years old; 31 for the first time home buyer, and 52 for the repeat buyer
– 2012 Median income of buyers was $83,300. $64,400 for First Timers. $96,000 for repeats
– 66% of Home Buyers were married couples. The highest share since 2001
– Typical home purchased was 1900 SqFt in size, was built in 1992, and had 3 Bedrooms and 2 Baths
– 80% of home buyers purchased a detached single-family home
– 14% of recent buyers over the age of 50 bought a home in senior related housing
The Home Search Process
– The first step for 42% of Home Buyers was to look online for properties
– 14% looked online for information about the Home Buying Process
– The overall use of the internet for the buyer’s home search rose to 92% from last year
– The typical home buyer searched for 12 weeks and viewed 10 homes
– For more than half of buyers finding the right house was the most difficult step in the process
Home Sellers and Their Selling Experience
– Almost half of home sellers traded up to a larger size and higher priced home
– The typical seller has lived in their home for nine years, up from six years in 2007
– 88% of sellers were assisted by a real estate agent
– Recent sellers sold their homes for 97% of listed price. 47% reported they reduced the price at least once
– 13% of recent sellers had to delay selling due to their home’s value being less than their mortgage
A very special thanks to those of you who have recommended or referred me to others to help them in the home buying or selling process. Referrals are truly the lifeblood of our business and are the highest compliment we can receive. I personally meet with the client and handle their business. Jon handles the administrative, marketing, and follow through for which I’m grateful. It frees me up to do what I do best, which is to accomplish our client’s goals!
So, if you know of someone considering whether or not to make a real estate move, please let me know, or give them my direct line. I’d love the opportunity to help them anyway I can. 602-689-3100.