The Cromford Report – Daily Observations April 2017

    April 30 – Following on from the analysis of the top 20 listing agents and top 20 selling agents, it might be interesting to look at the top 20 agents who represented both sides of transactions in 2016. These are:

    Rank Dual Agent Name Office Closed Listings Dollar Revenue for Listings Closed in 2016
    1 Tracy Norton LGI Homes 224 $42M
    2 Mize Taylor Pulte Homes 79 $24M
    3 Scott Grigg Realty Executives 7 $21M
    4 Joel Huston KB Homes 79 $20M
    5 Mike Domer Re/Max Excalibur 2 $11M
    6 Catherine Renshaw CalAtlantic Homes 29 $10M
    7 Barbara Miller Russ Lyon Sotheby’s International Realty 5 $8M
    8 Chad Fuller K Hovnanian Homes 21 $8M
    9 Clayton Denk David Weekley Homes 15 $8M
    10 Bobby Lieb HomeSmart 13 $8M
    11 Walt Danley Walt Danley Group 6 $8M
    12 Mackey Martin Realty Executives 1 $7M
    13 Carl Mulac AV Homes 24 $7M
    14 Rusty Davis Russ Lyon Sotheby’s International Realty 2 $7M
    15 Robert Joffe Launch 5 $7M
    16 Deborah Beardsley Silverleaf Realty 2 $6M
    17 Jason Mitchell My Home Group 8 $6M
    18 Michaelann Haffner Re/Max Infinity 16 $6M
    19 Craig Tucker Maracay Homes 16 $6M
    20 Allan Macdonald Russ Lyon Sotheby’s International Realty 3 $6M

    It is perhaps surprising that so many new home buyers allow the developer’s agent to represent them. This is not necessarily an accurate reflection of the new home business overall, since the majority of new homes are sold without being listed on the MLS at all.

    There were 6,182 transactions representing $1,766 million where one agent represented both parties. This represents about 7% of all transactions.

    Tracy Norton, Mize Taylor, Walt Danley and Robert Joffe are the only names that appear in all 3 tables.

    April 29 – Last month we provided a table of the top 20 listing agents. Now we will look at the other side of the transactions and list the top 20 selling agents with the largest dollar volume in 2016. The analysis is restricted to residential homes within the Greater Phoenix area, so it excludes out of area listings, but includes all property types.

    Rank Selling Agent Name Office Closed Listings Dollar Revenue for Listings Closed in 2016
    1 Jason Mitchell My Home Group 151 $47M
    2 Tracy Norton LGI Homes 224 $42M
    3 Brett Tanner Keller William Realty Phoenix 165 $35M
    4 Walt Danley Walt Danley Group 15 $33M
    5 Carin Nguyen Keller Williams Realty Phoenix 141 $33M
    6 Jeffery Hixson OpenDoor Homes 155 $31M
    7 Scott Grigg Realty Executives 18 $30M
    8 Kenny Klaus Keller Williams Integrity First 120 $29M
    9 John Gluch Re/Max Platinum Living 80 $29M
    10 Jared Parker Stunning Homes Realty 151 $25M
    11 Taylor Mize Pulte Homes 79 $24M
    12 James Wexler Realty Executives 30 $24M
    13 Mike Domer Re/Max Excalibur 10 $21M
    14 Joel Huston KB Homes 79 $20M
    15 Shannon Cunningham Keller Williams Realty Professional Partners 88 $20M
    16 JoAnn Callaway Those Callaways 54 $20M
    17 Robert Joffe Launch 16 $19M
    18 Sarah Parker Stunning Homes Realty 112 $19M
    19 Susan Pellegrini Russ Lyon Sotheby’s International Realty 25 $19M
    20 Alan Kittelman Show Appeal Realty 97 $19M

     

    There were also 1,085 sales worth $354M that had “nonmls” as the selling agent, meaning no ARMLS member represented the buyer. This amounted to 1.5% of all dollar revenue.

    Jason Mitchell’s market share is 0.19%

    Walt Danley, Tracy Norton, Taylor Mize, Kenny Klaus, JoAnn Callaway, Robert Joffe and Brett Tanner appeared in both top 20 lists.

    A total of 20,028 agents represented buyers in 2016 for at least one transaction, out of a total population of 37,122 ARMLS members at the end of 2016.

    It is commonly suggested that 80% of the business is conducted by 20% of the agents. It actually took the top 8,069 selling agents to represent 80% of the buyers. This is 40% of the agents who represented anybody. However there were 37,122 ARMLS members in total, so 8,069 represents 22% of all the possible agents.

    April 28 – For March 2017 the Census is reporting 1,985 single-family new home permits across Maricopa and Pinal counties for March. We have seen 4,788 for the first quarter, which is 7.9% more than the 4,436 we saw in the first quarter of last year.

    This brings the 12 month rolling average up to 18,739. Last year at this point it was 17,871. That is only a 4.9% increase, much less than most people seem to be forecasting for the 2017 increase over 2016. The consensus forecast appears to be for 20% growth. The biggest quarter is usually the second, so maybe we shall see more aggressive numbers over the next few months.

    The biggest contributors with new home permits in March 2017 were:

    1. Mesa -249
    2. Phoenix – 230
    3. Gilbert – 207
    4. Peoria – 207
    5. Buckeye – 182
    6. Unincorporated Pinal County – 150
    7. Maricopa – 135
    8. Goodyear – 126
    9. Queen Creek – 110
    10. Scottsdale 108

    April 27 – It is time again for our weekly look at the Cromford® Market Index for the single-family markets in the 17 largest cities (by dollar volume):

    The changes over the last month still favor sellers, but only moderately. There are 10 cities showing improving conditions for sellers and 7 showing deterioration.

    Most of the deterioration is in the West Valley, with Avondale down 10%, Goodyear down 5%, Peoria down 3%, Glendale down 2% and Buckeye down 2%. Only Surprise managed an improvement.

    The Southeast Valley continues to do better than average with Queen Creek up 7%, Gilbert up 6%, Mesa up 4%, Chandler up 2% and Tempe up 1%.

    Fountain Hills has started to recover and may manage to claw its way off the bottom rung by overtaking Buckeye and/or Scottsdale which both saw mild deterioration.

    Paradise Valley continues to do much better than it did in the first quarter while Avondale is coming down from the heights, perhaps to give some other city a chance of going top for the first time in over a year.

    April 26 – Using the deeds recorded during the first quarter in Maricopa and Pinal Counties, let us take a quick look at the luxury market, which is here defined as homes that sold for $1 million and more. The underlying data comes from the Cromford Public section of the Cromford Report, since it is based on public records rather than ARMLS numbers.

    Measurement for Market at $1M plus 1Q 2015 1Q 2016 1Q 2017 YoY Change
    Total Million Dollar Units Closed 347 343 398 up 16%
    Single Family Units Closed 326 332 348 up 5%
    Condo / Townhouse Units Closed 21 11 50 up 355%
    New Units Closed 49 64 97 up 52%
    Re-sale Units Closed 298 279 301 up 8%
    Scottsdale Dollar Volume $285M $275M $316M up 15%
    Paradise Valley Dollar Volume $132M $151M $171M up 13%
    Phoenix Dollar Volume $77M $97M $95M down 2%
    Southeast Valley Dollar Volume $40M $31M $32M up 4%
    Fountain Hills Dollar Volume $13M $16M $13M down 21%
    Cave Creek & Carefree Dollar Volume $7M $13M $19M up 53%
    West Valley Dollar Volume $7M $5M $10M up 122%
    Average $/SF $330 $344 $347 up 0.8%
    Average $/SF – Single-Family $325 $340 $331 down 3%
    Average $/SF – Condo / Townhouse $472 $516 $547 up 6%

     

    Overall, the first quarter of 2017 was a much busier quarter for million dollar homes than the same period in 2016. Fountain Hills and Phoenix were the only areas that declined. The West Valley, Cave Creek & Carefree saw the greatest percentage growth, but the largest luxury areas (Scottsdale, Paradise Valley) were both up by healthy percentages.

    It is clear that the luxury condo/townhouse sector is where the majority of the growth occurred, jumping from 11 to 50 units, the highest we have seen in any quarter in history. Unit growth in the single family sector was a relatively modest 5%.

    Prices rose only 0.8% based on average price per square foot, less than the annual rate of inflation. This confirms that despite the healthy increase in volume, there is little pricing power among sellers of luxury homes, thanks to the abundant inventory of active listings. In fact single family pricing fell by 3% over the last 12 months, but condo/townhouse pricing rose by 6% to an eye-watering $547 per sq. ft. It seems to be the attached jewel-boxes where pricing power still resides with the sellers, especially new home sellers given that the average price per sq. ft., for new condo/townhouse units reached $574 per sq. ft.. This is up 22% year over year, thanks to the very high end condo/townhouse developments that have opened since the early part of 2016. In fact there were 17 condo sales over $600 per sq. ft. with the highest at $762. The most expensive locations were:

    • Scottsdale Waterfront Residences
    • Plaza Lofts at Kierland Commons
    • Envy
    • Two Biltmore Estates
    • Enclave at Borgata
    • Esplanade Place

    Portland on the Park also sold in volume during 1Q 2017 but at slightly lower prices per sq. ft. than the 6 developments mentioned above.

    The first quarter of 2015 was similar to 2016, but the second quarter of 2015 was very strong, so this will make a more challenging comparison for 2Q 2017 when we come to measure that.

    April 25 – The S&P / Case-Shiller® Home Price Index® report released today contains data for the 3 month period December 2016 through February 2017. Phoenix added 0.38% since last month, and in contrast to last month this was higher than the national average. The month to month changes for the 20 cities that are reported by Case-Shiller were as follows:

    1. Seattle 1.91%
    2. San Francisco 1.17%
    3. Dallas 1.07%
    4. San Diego 0.98%
    5. Portland 0.76%
    6. Charlotte 0.48%
    7. Boston 0.40%
    8. Atlanta 0.39%
    9. Los Angeles 0.39%
    10. Las Vegas 0.39%
    11. Denver 0.38%
    12. Phoenix 0.38%
    13. Detroit 0.28%
    14. Washington DC 0.22%
    15. Chicago 0.20%
    16. Minneapolis 0.13%
    17. Miami 0.04%
    18. New York -0.03%
    19. Cleveland -0.30%
    20. Tampa -0.52%

    We were in 14th place last month, so moved up 2 notches. The national average was 0.24%.

    The West Coast and Texas are clearly seeing greater pricing momentum than the rest of the country. Florida is unusually slow.

    The year over year changes are as follows:

    1. Seattle 12.2%
    2. Portland 9.7%
    3. Dallas 8.8% (up 1 place)
    4. Denver 8.5% (down 1 place)
    5. Boston 7.6% (up 1 place)
    6. Tampa 6.9% (down 1 place)
    7. Miami 6.7%
    8. San Diego 6.5% (up 6 places)
    9. San Francisco 6.4% (down 1 place)
    10. Las Vegas 6.3% (down 1 place)
    11. Chicago 6.2% (up 2 places)
    12. Detroit 6.2% (down 2 places)
    13. Charlotte 6.1% (down 2 places)
    14. Minneapolis 5.9% (up 1 place)
    15. Atlanta 5.6% (down 2 places)
    16. Phoenix 5.3% (up 1 place)
    17. Los Angeles 5.1% (down 1 place)
    18. Cleveland 4.5% (up 1 place)
    19. Washington DC 4.1% (down 1 place)
    20. New York 3.2%

    Phoenix was below the national average of 5.8% but rose 1 place by overtaking Los Angeles in the table. San Diego and Chicago were the biggest upward movers in the table compared to last month.

    Seattle, Portland, Denver, San Francisco and Dallas have been outperforming the rest of the country for a long time now. The three year change in index looks like this:

    1. Portland 31.4%
    2. Seattle 31.3%
    3. Denver 31.0%
    4. San Francisco 28.0%
    5. Dallas 27.7%
    6. Miami 23.5%
    7. Tampa 23.0%
    8. Las Vegas 19.1%
    9. Los Angeles 18.6%
    10. Atlanta 18.6%
    11. San Diego 18.4%
    12. Detroit 16.6%
    13. Boston 16.2%
    14. Charlotte 15.7%
    15. Phoenix 14.8%
    16. Minneapolis 12.2%
    17. Chicago 11.4%
    18. Cleveland 8.7%
    19. New York 7.7%
    20. Washington DC 6.5%

    Although some people have suggested the Phoenix market may be overheating, Phoenix has appreciated less than the USA national average of 16.0% over the last 3 years.

    April 24 – The Commerce Department announced duties of up to 24% on softwood lumber imported from Canada. The tariffs will range from 3% to 24% on the 5 major producers and 20% on all others. 28% of all softwood used in home building in the USA is imported from Canada. This had been expected and lumber prices were already up by 30% over last year. This will add to cost pressures on home builders who are already struggling with the increased costs of land and labor. They will have great motivation to increase list prices if the market allows them to. At the moment the disparity between supply and demand suggests they will have enough pricing power to respond, but this will of course be bad news for new home buyers in the second half of 2017 and in 2018.

    April 23 – I think it is time we reviewed the rental listings for some signs of what is happening in the rental market. We exclude vacation rentals from all our statistics.

    Right now we have 2,566 active listings, and we had 2,489 this time last year. Little change there really, with a 3.1% increase. At least it is going in the right direction for tenants, but we are still way down from the 6,561 we had back in 2013. Condo and townhouse supply is up 5.9% and single-family only 1.0%

    Leases are being signed through ARMLS at a rate of 2,163 a month, down 6% from 2,299 last year. This means we have 1.2 months of supply, up from 1.1 months last year.

    The average closed rent is 85.7 cents per sq. ft. per month, which is up 5.0% from 81.7 cents this time last year. The rate of increase is still strong but has subsided from the heights that we saw last year and in 2015.

    Overall I would conclude that the rental market is still hot, but is on a slight cooling trend now.

    April 22 – It is getting a little uncanny. The year to date count of new listings added to the ARMLS database is 40,194. On April 22, 2016 the count was 40,193. So we have just 1 extra listing.

    Mind you, we have 6.4% more ARMLS members and 5.5% more broker’s offices than we had 12 months ago. So that 1 extra listing is spread across 2,286 extra agents and 253 extra brokers.

    April 21 – I expect many people have noticed that the sales rate in 2017 has increased significantly over 2016. As of yesterday, year-to-date sales were up 13% across the entire ARMLS database. I wonder how many people have noticed that listings under contract are NOT up by a similar percentage. In fact they are slightly DOWN. We had 13,608 yesterday and 13,930 last year on April 20. That is a decline of just over 2%.

    The two trends seem at first be a disconnect. How do sales go up when listings under contract are down? The answer is probably in the speed of closing. Despite all the grumbling when the new TILA-RESPA procedures were introduced, we have seen a decline in the number of days it takes to close a loan now that people have got used to the new processes. According to the most recent Ellie Mae Origination Insight report, the average number of days to close a purchase loan was 43 in March 2017. Back in the late 2015 and early 2016 we were seeing an average of 50 to 51 days. That means loan closing times are down about 14%. In turn this means listings are spending less time under contract. So we see more closings without having to increase the listings under contract pool.

    April 20 – We take another look at the Cromford® Market Index for the single-family markets in the 17 largest cities by dollar volume:

    The biggest deterioration over the last month is in Avondale, but it remains at the top of the table. This deterioration is mainly due to increasing supply, but demand has faded a little too. It remains top because demand still outstrips supply by a very wide margin.

    The largest improvement over the last month occurred in Paradise Valley. Here there has been a significant strengthening in demand and a slight reduction in supply. It is looking much better for sellers than last quarter.

    Of the largest markets, Phoenix, Mesa and Chandler all improved nicely while Scottsdale faded slightly. Overall the market continues to gently improve for sellers from an already favorable position. So there is little here that spells relief for buyers. Indeed, we have no city with a CMI under 100 (unlike last week) and 14 out 17 cities are in the seller’s market zone.

    April 19 – Yesterday we looked at the best ZIP codes for listing success rates.

    Now for the bad news. Here are the 20 ZIP codes where it has been hardest to succeed with a listing since January 1, 2013. ZIP codes with less than 100 closed listing since January 1, 2013 are ignored.

    1. Carefree 85377 – 51.4%
    2. Rio Verde 85263 – 51.9%
    3. Paradise Valley 85253 – 52.2%
    4. Scottsdale 85262 – 53.1%
    5. Wickenburg 85390 – 55.4%
    6. Scottsdale 85266 – 56.5%
    7. Morristown 85342 – 56.6%
    8. Casa Grande 85194 – 59.8%
    9. Congress 85332 – 60.8%
    10. Phoenix 85003 – 60.8%
    11. Gold Canyon 85118 – 60.9%
    12. Phoenix 85054 – 61.2%
    13. Scottsdale 85255 – 61.3%
    14. Tonopah 85354 63.2%
    15. Scottsdale 85259 – 63.8%
    16. Fountain Hills 85268 – 64.3%
    17. Superior 85173 – 64.3%
    18. Eloy 85131 – 66.6%
    19. Apache Junction 85119 – 65.7%
    20. Phoenix 85012 – 65.9%

    The overall average listing success rate is 75.1% since January 1, 2013. This is higher than the average since January 1, 2001, which is only 63%.

    April 18 – We were wondering which areas were the easiest to sell homes. To find out we analyzed the listing success rate for every ZIP code within Greater Phoenix since January 1, 2013.

    Here are the top 20 ZIP codes where agents have the greatest success with their listings. ZIP codes with less than 100 closed listings are ignored.

    1. Phoenix 85027 – 85.1%
    2. El Mirage 85335 – 84.8%
    3. Sun City 85351 – 84.7%
    4. Sun City West – 84.2%
    5. Chandler 85224 – 84.2%
    6. Peoria 85345 – 84.2%
    7. Chandler 85225 – 83.6%
    8. Mesa 85204 – 83.5%
    9. Mesa 85201 – 83.4%
    10. Peoria 85382 – 82.6%
    11. Tempe 85282 – 82.5%
    12. Sun City 85373 – 82.5%
    13. Mesa 85202 – 82.2%
    14. Tempe 85283 – 82.1%
    15. Avondale 85392 – 82.0%
    16. Chandler 85226 – 81.6%
    17. Gilbert 85233 – 81.6%
    18. Mesa 85210 – 81.5%
    19. Glendale 85302 – 81.5%
    20. Peoria 85381 – 81.3%

    The West Valley, especially the northwestern areas are very dominant in this list. The inner Southeast Valley also makes a strong appearance.

    If we confine our analysis to homes listed for more than $1 million, the most successful ZIP codes are shown below ( we have ignored ZIP codes with fewer than 5 sales over $1 million)

    1. Chandler 85286 – 94.1%
    2. Phoenix 85013 – 66.7%
    3. Scottsdale 85254 – 54.3%
    4. Phoenix 85014 – 50.0%
    5. Scottsdale 85250 – 50.0%
    6. Gilbert 85296 – 50.0%
    7. Scottsdale 85258 – 48.7%
    8. Scottsdale 85255 – 47.7%
    9. Phoenix 85028 – 47.6%
    10. Paradise Valley 85253 – 47.2%
    11. Phoenix 85018 – 47.1%
    12. Tempe 85284 – 47.1%
    13. Gilbert 85298 – 46.9%
    14. Scottsdale 85259 – 46.5%
    15. Scottsdale 85262 – 45.9%
    16. Scottsdale 85260 – 45.6%
    17. Scottsdale 85251 – 44.7%
    18. Phoenix 85021 – 42.9%
    19. Phoenix 85048 – 42.9%
    20. Glendale 85310 – 41.9%

    Only the 3 ZIP codes at the top have a better than even chance of a listing selling. Although its volume of million dollar homes is not high, Chandler 85286 is quite remarkable with 16 successful closings out of 17 listings. the magic ZIP code of 85254 goes some way towards justifying its name by appearing at number 3.

    April 17 – If we compare the total dollar volume during the first quarter of 2017 with the same period in 2016, we can see an interesting pattern by price range:

    Note that the price range under $100,000 has declined due to lack of supply. The same lack of supply is constraining volumes between $100K and $200K. However above $200K and all the way up to $3 million, dollar volume is up by healthy amounts from 18% to 34%.

    Above $3 million, there is no lack of supply, but there seems to be a surprising shortage of demand. This has caused dollar volume to decline 23% in stark contrast to the rest of the market.

    April 16 – Few people are paying attention to delinquency rates these days, but the latest report from Black Knight Financial Services makes for interesting reading. The data relates to the month of February 2017. Arizona has 3.1% of its first position home loans in some form of delinquency (from 30 days late upwards). It also has another 0.3% of its loans in the foreclosure process. The total percentage of loans that are non-current is 3.4%, which is a 9.2% lower than last year. We are still one of the better states in the nation for loan currency, placing 42nd out of 51 states (including DC). Oregon and Washington have improved faster than Arizona and overtaken us, but Alaska has deteriorated and fallen behind us, so we rose in the non-currency table by 1 place since last year when we were 43rd.

    Alaska stands out as showing initial signs of trouble, with a 18% increase in delinquency over the past year. North Dakota has deteriorated by 8.7%, but it still remains the state with the least percentage of non-current home loans in the nation. South Dakota, Louisiana and Vermont all saw very small deteriorations but all other states are improved since February 2016.

    Black Knight provides an interesting map for delinquency rates (these excluded loans already in foreclosure). These days the gulf coast states of Mississippi, Louisiana and Alabama, together with West Virginia have the worst delinquency problems.

    We note there are some counties in Mississippi with delinquency rates as high as 23% (Tallahatchie) or even 25% (Noxubee and Perry).

    Mississippi, Louisiana and Alabama now have delinquency rates that are between 1.75 and 2 times the national average.

    Black Knight also provides an interesting map of average loan to values. California is way out in front in terms of home equity with only 47% loan to value. New York is next with 50% and Washington DC has 51%, while Colorado, Oregon and Washington are comfortable at 53%. West Virginia and Missouri have the highest loan to value at 68%. Arizona is in the middle ground with an average of 62% loan to value.

    You can read the whole report here.

    April 15 – After 2 complete weeks of the second quarter, we have seen almost exactly the same number of new listings added to the ARMLS database as we saw in 2016. The growth from last year is just 0.1%. This is unusual. In 2016 there was 10.6% growth over the previous year. However it continues the trend that we saw during the first quarter where the difference between 2016 and 2017 was just 0.6%.

    Basically, the supply is running at an equivalent rate to last year. This is inadequate to match the number of buyers because closings are running much higher than last year. So far in 2017 we have seen 14% more closings year to date than in the equivalent period in 2016. Because we have 14% more closings from the same supply, the listing success rate has to increase. We are running at 81.8% right now, compared with 78.2% last year. This compensates for about one third of the increase in closings. The other two thirds is leading to a drop in the available inventory. Unfortunately the drop in inventory is not uniform and is affecting some price ranges and locations much more than others.

    April 14 – This is the time of year when pricing tends to make its major move – the second quarter. Yesterday the average price per square foot for all areas & types reached $150 for the first time since March 2008. This is a rise of 2.5% in just one month. By the time we get to late June, it is likely that the current momentum will have waned and we anticipate a sideways move or even a moderate retreat during the third quarter, followed by another recovery in the fourth quarter. Greater Phoenix’s seasonal pattern is well established, but given the supply shortages it is not surprising that annual appreciation is nearly 7% at the middle of April.

    April 13 – The table of Cromford® Report Index values for the single-family markets in the 17 largest cities (by dollar volume) is show below:

    The Southeast Valley is certainly on a roll, with all its cities improving for sellers;

    1. Tempe – up 10%
    2. Queen Creek – up 7%
    3. Chandler – up 6%
    4. Mesa – up 5%
    5. Gilbert – up 3%

    The West Valley is mixed with Surprise up 6% and Glendale improving 2%, but Avondale has weakened by 12% (something it can afford given its long term hold on the top of the table). In addition, Goodyear is down 7% and Peoria down 2%, so the West Valley is definitely falling behind the Southeast Valley from a seller’s perspective..

    Pinal County is also in great form, and Maricopa, its only representative in the top 17 (Queen Creek spans both Maricopa and Pinal), continues to rise up the table, gaining 3% over last month.

    The Northeast Valley remains the weakest area, though Paradise Valley is making a fine recovery by advancing 10% and threatening to become a seller’s market if it can breach 110 by maintaining its recent improvement in demand..

    Phoenix has been pretty stable for many months but is now making a move in favor of sellers, up 5% since last month.

    It is the mid-price ranges that are healthiest with high volumes and limited supply. The Southeast Valley is very much the province of the mid-price ranges from $250,000 to $600,000.

    Volumes in the higher price ranges are much improved over last year but so far this has done little to help prices because of the excessive supply of active listings at price points over $1 million.

    April 12 – Here are the cities ranked by single-family months of supply (based on their monthly sales rate):

    1. Youngtown 1.0
    2. El Mirage 1.2
    3. Tolleson 1.4
    4. Avondale 1.7
    5. Tempe 1.8
    6. Chandler 1.9
    7. Glendale 1.9
    8. Surprise 1.9
    9. Coolidge 2.0
    10. Sun Lakes 2.0
    11. Mesa 2.1
    12. Gilbert 2.1
    13. Maricopa 2.1
    14. Arizona City 2.1
    15. Sun City 2.2
    16. Florence 2.3
    17. Apache Junction 2.3
    18. Casa Grande 2.3
    19. Sun City West 2.3
    20. Tonopah 2.3
    21. Queen Creek 2.4
    22. Laveen 2.4
    23. Waddell 2.4
    24. Phoenix 2.5
    25. New River 2.5
    26. Peoria 2.7
    27. Goodyear 2.7
    28. Buckeye 2.7
    29. Wittmann 2.7
    30. Anthem 2.9
    31. Eloy 3.1
    32. Gold Canyon 3.7
    33. Litchfield Park 4.3
    34. Cave Creek 4.5
    35. Scottsdale 5.5
    36. Rio Verde 6.1
    37. Fountain Hills 6.2
    38. Paradise Valley 10.4
    39. Wickenburg 14.7
    40. Carefree 16.0

    In this case, “Supply” includes listings in UCB and CCBS status, so the “real” supply of homes without a contract is much less than the numbers above suggest.

    Buyers who want a more relaxed time should head to the areas ranked 32 or lower. The top 10 are extremely tough places to be a buyer right now.

    April 11 – As of April 8, days of inventory for Greater Phoenix (excluding UCB and CCBS listings) stood at 74.8, the lowest level since September 2013. However this one number fails to explain the huge disparity between the bottom and top ends of the market. Here are the days of inventory for various price ranges:

    • under $100K – 49.9 days
    • $100K – $200K – 33.4 days
    • $200K – $300K – 54.6 days
    • $300K – $400K – 86.9 days
    • $400K – $500K – 128. 2 days
    • $500K – $1M – 218.6 days
    • $1M – $2M – 437.7 days
    • over $2M – 882.4 days

    It is the $100K to $200K price range that is most stressed by the lack of supply, and within that range the $125K to $150K price range has only 28.3 days of inventory. This is the lowest level since 2005.

    The range between $500K and $600K has dropped from 230.8 to168.8 days over the last 12 months, making this sector much more favorable to sellers.

    Meanwhile the range over $3M has 1230.5 days of supply, up from 1129.8 this time last year, so sellers outnumber buyers to a huge extent at this rarified price point.

    April 10 – In some parts of the valley, the market is so hot that a few people have been drawing parallels with 2005 and expressing fear of a bubble. While I agree that the Southeast Valley, Pinal County and parts of the Northwest Valley are much hotter than they have been for a while, the market is more akin to 2013 than 2005.

    I think some people forget quite how ridiculous 2005 was. It was exactly 12 years ago that:

    • Days of Inventory stood at 28 (currently 85)
    • Months of supply was 0.9 (currently 2.8)
    • Annual appreciation rate was 27.9% (currently 6.8%)
    • Dollar volume was up 43.9% annually (currently up 14.6%)
    • Listing success rate was 84.3% (currently 81.9%)
    • Cromford® Supply Index was 41.4 (now 72.6)
    • Cromford® Demand Index was 129.5 (now 106.1)
    • Cromford® Market Index was 312.7 (now 146.1)
    • Average percent of list for closed listings was 99.16% (currently 97.69%)
    • New homes sales were 42,724 a year just in Maricopa County (currently 13,958)

    The Greater Phoenix market has a long way to go before conditions get bubbly, and we should remember how few skeptics there were in 2005 that the market could ever go down. Now there are skeptics everywhere, which is a very good reason that another bubble is unlikely to develop. The next housing bubble is likely once everyone who experienced the last one has retired or passed away.

    April 9 – Today we will look in more detail at the Southeast Valley, where active listings have fallen by the largest amount within Maricopa County.

    Here are the changes in new listings by city:

    City (within Maricopa County) Q1 New Listings 2017 Q1 New Listings 2016 Change
    Mesa 2248 2185 +3%
    Gilbert 1587 1767 -10%
    Chandler 1402 1583 -11%
    Ahwatukee (Phoenix) 531 567 -6%
    Tempe 462 462 0%
    Queen Creek 369 377 -2%
    Sun Lakes 195 229 -15%
    Apache Junction 3 12 -75%

    We will ignore Apache Junction for now, since the majority of this city lies within Pinal County.

    Mesa is the only major city showing more new listings in 2017 than 2016. Sun Lakes, Chandler and Gilbert are down by double digit percentages, a significant lack of supply.

    Here are the changes in closed sales during the first quarter:

    City Q1 Sales 2017 Q1 Sales 2016 Change
    Mesa 1670 1426 +17%
    Gilbert 1126 1107 +2%
    Chandler 1011 934 +8%
    Ahwatukee (Phoenix) 335 304 +10%
    Tempe 362 297 +22%
    Queen Creek 230 251 -8%
    Sun Lakes 139 128 +9%
    Apache Junction 8 9 -11%

    So although Mesa and Tempe saw no reduction in new listings, they have have been charging ahead in closed sales.

    Overall it is a good time to be a seller in the Southeast Valley and the current annual appreciation rates look like this:

    1. Mesa +8.4%
    2. Sun Lakes +6.8%
    3. Tempe +6.2%
    4. Queen Creek +6.2%
    5. Gilbert +6.1%
    6. Chandler +4.8%
    7. Ahwatukee (Phoenix) +4.0%

    So despite being the only major city with more new listing than last year, its extremely strong growth in sales has helped Mesa to rank top in terms of appreciation.

    April 8 – Looking at the active listing counts for single-family detached homes at the end of the first quarter, we see that some areas have seen much larger declines since the same time last year:

    Area Active Listings (excluding UCB & CCBS) April 1, 2017 Active Listings (excluding UCB & CCBS) April 1, 2016 Change
    Pinal County 1587 2166 -27%
    Southeast Valley 3277 4179 -22%
    Northeast Valley 3558 3912 -9%
    West Valley 3860 3904 -1%
    Phoenix & North Valley 2902 2902 0%

    Pinal County has seen a huge fall in active listings of 27% and the Southeast Valley has also declined significantly by 22%. The Northeast valley has seen a more modest decline of 9% while the West Valley and Phoenix have seen very little change.

    Since it has seen the biggest movement, let us look at Pinal County to see whether it was caused by a decline in new listings or a rise in sales.

    • New listings during Q1 – 2905 in 2016 and 2653 in 2017
    • Closed Sales during Q1 – 1643 in 2016 and 1916 in 2017

    So there has been a rise of 17% in sales activity as well as a 9% fall in the number of new listings. These have combined to give us a steep 27% fall in active listings.

    The rise in sales activity is about twice as significant as the fall in new listings, but both work to make life easier for sellers.

    Has this been uniform across Pinal County?

    First here are the changes in new single family listings

    City Q1 New Listings 2017 Q1 New Listings 2016 Change
    San Tan Valley 930 996 -7%
    Maricopa 609 646 -6%
    Casa Grande 305 370 -18%
    Florence 198 209 -5%
    Apache Junction 194 240 -19%
    Gold Canyon 202 202 0%
    Arizona City 91 90 +1%
    Coolidge 77 68 +13%
    Eloy 27 55 -51%
    All Other Locations 20 29 -31%

    The steepest fall off in new listings is seen in Eloy, Apache Junction and Casa Grande, as well as the smaller locations. The other locations saw a drop that was below average for Pinal County.

    Now let us look at the change in sales activity:

    City Q1 Sales 2017 Q1 Sales 2016 Change
    San Tan Valley 632 584 +8%
    Maricopa 411 340 +21%
    Casa Grande 242 204 +19%
    Florence 160 128 +25%
    Apache Junction 164 138 +19%
    Gold Canyon 145 109 +33%
    Arizona City 70 67 +5%
    Coolidge 51 39 +31%
    Eloy 30 16 +88%
    All Other Locations 11 18 -39%

    The rise in sales activity is much higher in Eloy, Gold Canyon, Coolidge and Florence with Maricopa, Casa Grande and Apache Junction above average. San Tan Valley and Arizona City have seen relatively modest increases in sales, while the smaller locations have declined.

    It is not surprising therefore that Pinal County has seen some of the strongest appreciation over the past year:

    1. Arizona City +15.9%
    2. Coolidge +10.2%
    3. Florence +9.7%
    4. Maricopa +9.7%
    5. Casa Grande +8.4%
    6. San Tan Valley +7.3%
    7. Apache Junction +6.8%
    8. Eloy +5.5%.
    9. Gold Canyon +0.2%

    April 7 – We have the preliminary transaction data for March derived by the Information Market from the office of the Maricopa County Recorder. The numbers are just as impressive as the ARMLS numbers we released on April 2.

    There were 10,818 closed sales for single-family homes, condos and townhomes, the largest number since June 2006. This is up 12% from March 2016, very similar to the percentage increase in closed listings.

    The advantage that new homes have enjoyed over re-sales has fallen back to more normal levels- new homes grew by 15%, while re-sales by 12%, year over year. Because new home builders are increasingly addressing the lower mid-price ranges, the median price for new homes was $320,437, down from $336,000 last month, and only 2% higher than $315,229, which we saw in March 2016.

    The re-sale median was up 6% from $217,000 to $230,000 over the past 12 months.

    Almost the whole market seems to be participating in the improving trend in sales volumes. We note that the listing success rate for Scottsdale has improved from an overall 66% in 2016 to 73% during the first quarter of 2017. In a higher priced ZP code like 85255, we are currently measuring a success rate of 67%, up from only 59% in 2016.

    April 5 – Here are the significant ZIP codes with the highest rise in average sale price per square foot between Q1 of 2016 and Q1 of 2017. All dwelling types are included:

    1. Phoenix 85012 – up 26.5% to $222.87
    2. Phoenix 85051 – up 19.0% to $106.40
    3. Casa Grande 85194 – up 18.8% to $117.90
    4. Phoenix 85040 – up 18.7% to $101.88
    5. Phoenix 85009 – up 18.2% to $105.29
    6. Phoenix 85016 – up 16.5% to $231.50
    7. Arizona City 85123 – up 16.1% to $80.24
    8. Phoenix 85035 – up 16.0% to $104.58
    9. Wickenburg 85390 – up 15.8% to $152.69
    10. Mesa 85201 – up 15.1% to $126.69
    11. Glendale 85307 – up 15.1% to $113.39
    12. Mesa 85213 – up 14.6% to $138.77
    13. Surprise 85387 – up 14.6% to $150.95
    14. Avondale 85323 – up 13.7% to $105.13
    15. Peoria 85345 – up 13.6% to $120.04
    16. Glendale 85306 – up 13.5% to $128.80
    17. Mesa 85202 – up 13.5% to $134.10
    18. Phoenix 85028 – up 13.1% to $190.71
    19. Florence 85132 – up 12.3% to $89.35
    20. El Mirage 85335 – up 11.5% to $106.42

    We see entrants from the central valley, the west, the southeast and Pinal County in this list.

    The bottom ranked ZIP codes for price appreciation between Q1 2016 and Q1 2017 are:

    1. Carefree 85377 – down 9.7% to $217.25
    2. Scottsdale 85262 – down 7.9% to $252.85
    3. New River 85087 – down 4.1% to $134.78
    4. Tonopah 85354 – down 3.6% to $77.11
    5. Phoenix 85004 – down 2.6% to $278.54
    6. Waddell 85355 – down 0.5% to $110.44
    7. Scottsdale 85259 – down 0.2% to $223.69
    8. Phoenix 85042 – up 0.1% to $119.81
    9. Phoenix 85085 – up 0.2% to $139.82
    10. Scottsdale 85258 – up 0.6% to $222.94

    April 4 – Let us try and get a picture of the sales growth that occurred in Q1 of 2017 by comparing it with Q1 of 2016.

    For all property types within Greater Phoenix, we saw an overall 13.6% growth in closed listings from 13,214 in 2016 to 15,008 in 2017. Looking at dollar volumes, these grew by 21.3% from $3.6 billion to $4.4 billion.

    The significant ZIP codes with the most growth in dollar volume were:

    1. Wittmann 85361 – up 199%
    2. Eloy 85131 – up 104%
    3. Youngtown 85363 – up 93%
    4. Surprise 85378 – up 88%
    5. Phoenix 85031 – up 84%
    6. Phoenix 85012 – up 76%
    7. Glendale 85302 – up 74%
    8. New River 85087 – up 71%
    9. Glendale 85307 – up 66%
    10. Avondale 85392 – up 65%
    11. Phoenix 85085 – up 60%
    12. Mesa 85201 – up 58%
    13. Peoria 85383 – up 55%
    14. Avondale 85323 – up 54%
    15. Mesa 85202 – up 53%
    16. Phoenix 85040 – up 52%
    17. Waddell 85355 – up 52%
    18. Mesa 85215 – up 51%
    19. Phoenix 85028 – up 47%
    20. Phoenix 85033 – up 47%

    This list is dominated by the West Valley, particularly the Northwest Valley.

    The following significant ZIP codes failed to participate in the overall trend in dollar volumes:

    1. Mesa 85203 – down 19%
    2. Chandler 85226 – down 9%
    3. Phoenix 85053 – down 7%
    4. Phoenix 85013 – down 6%
    5. Phoenix 85042 – down 5%
    6. Fountain Hills 85268 – down 4%
    7. Cave Creek 85331 – down 4%
    8. Queen Creek 85142 – down 2%
    9. Phoenix 85004 – down 2%
    10. Phoenix 85029 – flat

    By “significant” we mean ZIP codes with at least 20 sales a year or an annual dollar volume of over $10 million.

    For the Northeast Valley, we see growth in dollar volume as follows:

    1. Scottsdale 85257 – up 36%
    2. Scottsdale 85251 – up 33%
    3. Scottsdale 85260 – up 29%
    4. Rio Verde 85263 – up 29%
    5. Carefree 85377 – up 28%
    6. Scottsdale 85258 – up 27%
    7. Scottsdale 85259 – up 25%
    8. Phoenix 85016 – up 24%
    9. Phoenix 85054 – up 20%
    10. Scottsdale 85255 – up 20%
    11. Scottsdale 85262 – up 13%
    12. Scottsdale 85250 – up 11%
    13. Paradise Valley – up 11%
    14. Scottsdale 85266 – up 6%
    15. Scottsdale 85254 – up 6%
    16. Phoenix 85018 – up 5%
    17. Fountain Hills 85268 – down 4%
    18. Cave Creek 85331 – down 4%

    Here we see the dominance of South and Old Town Scottsdale.

    There are several ZIP codes that grew dollar volume but failed to grow average price per square foot. Carefree 85377, Scottsdale 85262 and Scottsdale 85259 all fall into that category. We will look at the Q1 price movements by ZIP code tomorrow.

    April 3 – We should recognize March 2017 as one of the strongest months for closed listings, with 9,272 over all areas & types. This is the highest monthly total since May 2013 and the highest total for March since 2005, making it the second most successful March ever.

    To be fair, March did contain 23 working days, the highest number we ever see in a month, so we should have expected a big number. But March 2016 also had 23 working days and only managed 8,363 closed listings.

    You can see the big spike in context in the long term sales chart here.

    Because it also benefits from the 6% appreciation since last year, the dollar volume chart is even more impressive. You can find it here.

    In this chart, dollar volume is at its highest monthly level since 2005.

    April 2 – Multi-family permits are still running at a high rate – 9,270 per year for the 12 months ending on February 28.

    In 2017 year-to-date, Glendale is leading the pack for permits with 471 units. The usual leader, Phoenix, has only contributed 244, with Surprise and Chandler supply the bulk of the remainder.

    April 1 – For new listings 2017 has lagged slightly behind 2016 all the way through the first quarter, but just pushed in front on the last day of March, winning by a nose. We counted 32,291 new listings added to ARMLS during the first quarter of 2017 which is 0.6% ahead of 2016 with 32,199.

    Both totals are well above 2015 which only saw 30,505 new listings added.

    With closed sales running well ahead of 2016, this rate of new listings is insufficient to move the market balance in favor of buyers and sellers still have a strong advantage across the vast majority of the market.

     

    © 2017 Cromford Associates LLC

    The data used to create the Cromford® Report is obtained from public records and obtained under license from the Arizona Regional Multiple Listing Service, Inc (ARMLS). Cromford Associates LLC and ARMLS expressly disclaim and make no representations or warranties of any kind, whether express, implied or statutory, as to the accuracy of the data used or the merchantability or fitness for any particular purpose.

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