Phoenix Real Estate Market Results: June 2014

Phoenix reeal estate Market conditions

Sales Reported from the Metro Phoenix MLS

What’s the big news in the Phoenix real estate market? Home sales peaked early in April and have trended downward for 2 consecutive months in what is normally a strong buying season from March through August for the Metro MLS.

June has been the peak selling month …

June has been the peak selling month in the Phoenix real estate market for 4 of the last 5 years, though technically the months of April-June 2010 each averaged about 9,200 sales.

Search Phoenix Real Estate Market through the live Phoenix MLSWe’ve been discussing the reasons for less buyer demand since January:

  • Investor purchases have gone way down
  • Concerns about the federal government’s fiscal policies
  • Job creation is low
  • Baby Boomers replaced as #1 home buyers by Millennials who have high college debt
  • Lower numbers of families being created
  • Investor purchasing way down

Price per square foot around the Metro Phoenix MLS

$129 per square foot

Price per square foot (PPSF) around the entire Phoenix real estate market averaged $129 in June 2014. According to the Metro Phoenix MLS, PPSF reached a nearly six-year high of $130 in March and April 2014, dipped to $127 in May, then rebounded to $129 in July 2014. Part of the rebound is due to a higher than average number of ultra luxury homes being sold in June. We believe price per square foot will level out, and perhaps increase just a little more, over the rest of the year in the Phoenix real estate market.

Here’s some perspective from the Metro Phoenix MLS. Year-over-year pricing (June 2013 to June 2014) is up $10 from $119 in June 2013. Price per square foot is up $52 from the bottom in 2011, but down over $50 from the peak in 2006. See historical date here: Phoenix Prices

Metro Phoenix MLS Listings

Decreases in active Metro Phoenix MLS listings have kept this from being a runaway buyers market. We’ve seen the number of listings decrease by 2,200 from 26,618 in March to the current 24,412. Contributing to this trend are: 1.) Cancelled listings in the Metro Phoenix MLS averaging 500 more per month in June than in January, 2.) Expired listings averaging 400 more and, 3.) new listings per month being down almost 2,000 from January. NOTE: if you have a mathematical mind don’t try to make these numbers add up because the number of sales also factors into the equation.

Phoenix Foreclosures

Phoenix foreclosures have dwindled over the last year in the Phoenix real estate market to the point where they are no longer a factor in home pricing. There were only 1,675 foreclosure-type listings (6.9%) in the entire Metro Phoenix MLS to begin July 2014. We call foreclosure-type listings bank properties and short sales. See: Active Foreclosure Info and Sold Foreclosure Info

Days to Sale in the Phoenix Real Estate Market

Days on market (DOM) in the Phoenix real estate market has held steady at the 82-83 day mark over the last 4 months, so no real movement there. As usual, short sales take 60 days longer to close than bank sales which take about 10 more days to close than normal sales. See all results here: Time to Sale

Market Index

…a strong willed and very patient seller can probably do just fine.

We quote Mike Orr from the Cromford Report from time to time. Remember Mike developed the Cromford Market Index (CMI) which helps us to understand the climate of the Phoenix real estate market. “100” is a balanced market on his index, under 100 is a buyers market, and over 100 is a seller’s market. The further from 100 the Index moves in either direction the greater the degree of a buyers or sellers market.

From Mike Orr of the Cromford Report:

The Cromford® Market Index (CMI) popped back into the neutral zone (90 to 100) with a reading of 90.2. The demand index remains very low at 80.6 but the supply index has dropped to 89.4 making the difference between them small enough for us to call the market “balanced”. To be clear, the fact that the CMI remains below 100 means there is still a small advantage to buyers, but it is now small enough that a strong willed and very patient seller can probably do just fine.