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We deal in facts, not fiction. You work hard for your money. Keep more in your pocket. Work with Realtors who know the real estate market.
Click on the city links to see current and historical data on:
- active listings to begin each month and the number of corresponding sales
- listing to sales ratios and months of inventory
- average size, sales price, and price per square foot
- average days on market
Get the facts for Metro Phoenix real estate market conditions. We’ll provide unbiased statistical information directly from the Phoenix Arizona area MLS that will help you with your housing goals. This information is important whether you are buying or selling in the Phoenix real estate market.
Be sure to see our “Market Reports By Topic” for a breakdown of the entire Phoenix Region. Information is updated monthly and organized here for your easy access. Price per square foot is utilized as a major evaluation tool. Want to know why price per square foot is a better tool than median price? Square Foot Explanation.
Most reports focus on the average sales price instead of the price per square foot. Why? It’s the easiest index to use. Just add up the prices of each “sold” home and divide by the total number sold. No fuss. Just a simple number to obtain. But — should you base your metro Phoenix real estate market forecast only on that number? Let me show you why not.
On a “street” level this is really easy to understand. Let’s say 1234 Main St. sold for $250,000 in March. 1256 Main St. sold for $220,000 in April. An alarmist who lived on Main Street might say “the sky is falling!” At first glance it appears values dropped $30,000 in one month. However, when you learn the $250,000 house was 2,500 square feet and the $220,000 house was 2,200 square feet … that assumption is no longer valid. In fact, both homes sold for $100 per square foot.
Here’s a second example: Let’s say the average price of a “sold home” in the City of Mesa for any particular December was $242,000. In January the average sales price was about $254,000. Are prices rising? Are there changes in the market? Here’s the rest of the information: in December the average house was 1,737 square feet and in January the average house was 1,849 square feet. That equals $139 per square foot versus $137 per square foot — or a drop of 2 dollars per square foot from December to January. You see the point. Numbers by themselves do not tell the whole story. It is important to compare apples to apples.
The Town of Maricopa in the metro Phoenix real estate market is the third example of this. Over a 5-month time period during 2008 the average sales price of a home dropped from $193,045 to $163,129. That’s bad enough, right? BUT as houses became more affordable people were buying bigger homes in that community. Are you ready to break out your calculator? Here goes: the homes that averaged $193,045 also averaged 2,069 square feet ($93 per square foot). The homes that averaged $163,129 averaged 2,314 square feet ($70 per square foot). That’s a 245 square foot larger home and an “average” price decrease of $30,000. So, is that an accurate depiction of the average price considering the homes are larger? NO! Why?
It’s because we now have $93 per square foot versus $70 per square foot. That $30,000 drop in price was actually a $23 price per square foot drop ($93-$70). This also means the most current, average sales price in the Town of Maricopa (during that time period) could also be expressed as $70 per square foot. Now, apply that number to the 2,069 square foot home that originally sold for $193,045 5-months prior and the adjusted, current price just became $144,830. In other words, the 2,069 square foot home bought for $193,045 just 5-months ago would cost $144,830 later in the same year. That huge $30,000 decrease just blossomed in to a potential $48,000 decrease over a 5-month period.
It’s important to use price per square foot to get an accurate Phoenix area real estate market forecast.
You can do the math another way with the same result. We know that $70 per square foot was the sales price in the Town of Maricopa at that time. We also know that the sales averaged 245 more square feet. $70 X 245 square feet = $17,150. $17,150 plus the apparent $30,000 price drop = about $47,000. The numbers do not match exactly in this equation because the average square foot numbers were rounded to the nearest whole number.
If that math makes your head hurt, imagine how your head would hurt if you a homeowner at that time. Anyone can do this math. It’s not trigonometry or quantitative analysis. Doesn’t it seem more reasonable to consider price per square foot? What do you think?