The change from a balanced market to a buyer’s market that occurred exactly one month ago has now settled in firmly. These stats are for the Phoenix Metro area as a whole, even though Fountain Hills shows different stats, overall these are the market conditions throughout the valley.
Market Index- Balanced Market is 100, Below 100 is a Buyer’s Market, above 100 is a Seller’s Market
Here are the basic numbers from the Arizona Regional Multiple Listing Service for March 1, 2014 relative to March 1, 2013 for all areas & types:
- Active Listings – 26,589 versus 17,090 last year – up 55.6% – and up 4.1% from 25,541 last month
- Under Contract Listings- 9,486 versus 14,670 last year – down 35.3% – but up 10.4% from 8,595 last month
- Monthly Sales: 5,462 versus 6,578 last year – down 16.7% – but up 14.7% from 4,778 last month
- Monthly Average Sales Price per Sq. Ft.: $127.54 versus $111.67 last year – up 14.3% – and up 1.7% from $125.45 last month
- Monthly Median Sales Price: $180,000 versus $160,000 last year – up 12.5% – but down 1.5% from $182,700 last month
The rate of change has slowed. Supply is increasing but less quickly because contract activity is picking up, as is usual for the time of year. For sellers they must hope that the number of active listings reaches a peak and starts to reduce in March. That would be normal for a quiet year. However demand remains stubbornly low compared with the normal spring level and there is, as yet, no sign of improvement for sellers except in a few isolated areas.
In a buyer’s market, prices tend to fall, but it takes quite some time to happen as long as we are not facing a lot of distressed properties. We are not. Distress is low and pending foreclosures are continuing to trend lower.
The luxury market is seeing more problems appear. Demand remains stronger than the rest of the market, thanks to the stock market making new highs and lenders falling over themselves to offer jumbo loans at very attractive rates. However supply is becoming excessive and luxury sellers are starting to see too much competition for them to be aggressive in pricing.
The big question is: why is the demand so weak?
The change since last year is much bigger than we all expected and more than just the disappearance of investors.
We don’t buy interest rates as the problem. There is probably something more fundamental going on. We suspect it is generational, and we are researching into its numbers. As baby boomers become gradually less important to the market, millennials start to take their place as the most influential generation for sales volumes. Millennials are behaving quite differently from previous generations. Some of these differences are by choice and some out of necessity. You can read the full report here The Cromford Report – News Mar 2014
If you would like more information about Fountain Hills or the surrounding areas, I would love to talk with you! For a quick response, you can contact me at 480 888 6708 or email me. I’ll get back to you ASAP!