The Cromford Report – Daily Observations March 2017
March 31 – Here are the top 20 listing 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||Agent Name||Office||Closed Listings||Dollar Revenue for Listings Closed in 2016|
|1||Jacqueline Moore||OpenDoor Homes||991||$230M|
|2||Beth Rider||Keller Williams Arizona Realty||386||$111M|
|4||Brian Bair||Liberty Properties & Associates||387||$93M|
|7||Kenny Klaus||Keller Williams Integrity First||252||$62M|
|8||Walt Danley||Walt Danley Group||40||$61M|
|9||JoAnn Callaway||Those Callaways||141||$58M|
|10||Brandon Cleveland||Taylor Morrison||141||$55M|
|11||Tracy Norton||LGI Homes||294||$55M|
|12||Russell Shaw||Realty ONE Group||226||$53M|
|13||Deborah Beardsley||Silverleaf Realty||13||$49M|
|15||Carol Royse||Keller Williams Realty East Valley||161||$48M|
|17||Don Matheson||RE/MAX Fine Properties||60||$45M|
|18||James Samsing||Real Home Services & Solutions||230||$42M|
|19||Marlene Cerreta||Cerreta Real Estate||201||$42M|
|20||Brett Tanner||Keller Williams Realty Phoenix||169||$39M|
If there was any doubt that OpenDoor’s business model is having an impact on the market then this table dispels that doubt quickly. In 2015 the dollar revenue for Jacqueline Moore of OpenDoor was just under $3 million.
We can also see that among the new home builders, Meritage Lennar, Pulte, Taylor Morrison & LGI are using the MLS to list quite a large number of the homes they sold.
March 30 – Let us take another of our regular looks at the Cromford® Market Index for the single-family markets in the 17 largest cities:
Gradual improvement for sellers is apparent with 13 out of 17 cities showing better conditions for sellers than last month. The only exceptions are Avondale, Goodyear, Gilbert & Scottsdale.
The highest percentage improvements are for Surprise, Maricopa, Tempe, Paradise Valley, Mesa and Glendale.
Paradise Valley has managed to lift itself off the bottom rung in the table, to be replaced by Fountain Hills.
March 29 – For the first 2 months of 2017, spending on attached homes (townhomes and condominiums) has been growing much faster than spending on single-family homes. Based on total dollar volume for recorded deeds in Maricopa and Pinal counties, we see the following:
|Period||Dollar Volume 2016||Dollar Volume 2017||Change %|
|Jan + Feb||$394,952,754||$566,954,928||43.6%|
This is far in excess of the growth in single-family homes, which was:
|Period||Dollar Volume 2016||Dollar Volume 2017||Change %|
|Jan + Feb||$3,428,285,927||$4,098,298,830||19.5%|
This is strong growth by any standards but the shift in favor of attached homes is significant, from 10.3% to 12.2% market share.
The growth of attached new home sales was even larger, up from $41,649,073 in Jan-Feb 2016 to $118,210,394 in Jan-Feb 2017, a growth rate of 183.8%. Market share within the new home sector doubled from 6.7% in Jan-Feb 2016 to 13.4% in Jan-Feb 2017.
March 28 – The S&P / Case-Shiller® Home Price Index® report released today contains data for the 3 month period November 2016 through January 2017. There is not much excitement for Phoenix since the latest index value was almost the same as last month. The month to month changes for the 20 cities that are reported by Case-Shiller were as follows:
- San Diego 0.80%
- Las Vegas 0.62%
- Seattle 0.59%
- Denver 0.48%
- Boston 0.40%
- Charlotte 0.39%
- Los Angeles 0.38%
- Washington DC 0.30%
- New York 0.29%
- Miami 0.26%
- Dallas 0.25%
- Chicago 0.17%
- Portland 0.13%
- Phoenix 0.01%
- Tampa -0.01%
- Atlanta -0.24%
- Detroit -0.40%
- San Francisco -0.41%
- Cleveland -0.48%
- Minneapolis -0.59%
We were in 14th place last month too, and well below the national average of 0.16%, which slipped from 0.21%.
Forbes magazine led with the headline “Home Prices Are on a Tear in 2017, Says S&P Case-Shiller” but this is a gross overstatement. If anything, home price increases are on a slower trend compared to last month.
The year over year changes are as follows:
- Seattle 11.3%
- Portland 9.7%
- Denver 9.2%
- Dallas 8.2%
- Tampa 8.1%
- Boston 7.0%
- Miami 6.7%
- San Francisco 6.3%
- Las Vegas 6.2%
- Detroit 6.2%
- Charlotte 6.0%
- Atlanta 5.9%
- Chicago 5.8%
- San Diego 5.7%
- Minneapolis 5.4%
- Los Angeles 5.3%
- Phoenix 5.1%
- Washington DC 3.9%
- Cleveland 3.9%
- New York 3.2%
Phoenix was below the national average of 5.9% and fell from 16th to 17th place in the table.
Seattle, Portland and Denver have been outperforming the rest of the country for a long time now. The three year change in index looks like this:
- Portland 31.4%
- Seattle 31.3%
- Denver 30.5%
- Dallas 27.7%
- San Francisco 26.8%
- Miami 23.3%
- Tampa 22.7%
- Las Vegas 19.1%
- San Diego 18.6%
- Los Angeles 18.6%
- Atlanta 17.5%
- Detroit 16.6%
- Boston 16.2%
- Charlotte 15.7%
- Phoenix 14.2%
- Minneapolis 12.2%
- Chicago 10.3%
- Cleveland 8.7%
- New York 7.7%
- Washington DC 6.8%
Over the last three years, Phoenix has appreciated less than the USA national average of 16.3%.
March 27 – Single family permits are not growing as fast as home sales. In February the 12 month count rose to 18,551 for Maricopa and Pinal Counties combined. This compares with 18,491 in January, a very modest 0.3% increase month to month. In February 2016, the 12 month count was 17,512, so the annual increase is currently running at 5.9%. Not only is the annual growth much slower than the rate of closings, the rate of growth is slowing down. Between January and February 2016 the month to month change in the 12 month count was 2.2%, which is nearly 7 times faster growth than we are seeing this year.
We are not seeing new homes planned at the rate necessary to meet the current increase in demand. This suggests that supply will continue to tighten, lead times will lengthen and prices will have to rise. Underlying causes are builders struggling to maintain profit margins in the face of stubbornly high land costs and scarce skilled labor which is growing ever more expensive. Government actions to drive immigrant labor out of the country will probably make the labor shortage more acute and new homes harder to find. However it will shrink re-sale and rental housing demand a little since that labor force will no longer need somewhere to live in Arizona.
March 26 – The overall listing success rate is hovering just under 82%, a small but significant increase over the 78% we were experiencing this time last year. The market is not dramatically different but we are seeing fewer cancellations and expirations. This means sellers are in a somewhat better position than in March 2016.
March 25 – In 2017 year to date we have seen 29,926 new listings added to the ARMLS system. This is remarkably similar to the 29,925 we saw in 2016 at this point.
2017 got off to a slightly slow start for new listings but has now caught up. This is hardly good enough however since closings are far more numerous in 2017. As of today we have seen 19,098 closed listings, which is up a hefty 17.3% from this time last year. Clearly if closings are up over 17% and new listings are flat, then supply is going to feel scarcer than last year in the majority of areas and price ranges.
March 23 – Looking once again at the Cromford® Market Indexes for the single family markets within the largest cities we see:
Here we see a positive picture for sellers with improvements in their negotiation power in 12 out of 17 cities. Surprise, Maricopa, Tempe, Glendale and Mesa lead the group advancing.
The only cities with significant deterioration were Scottsdale, Goodyear and, Avondale. However the latter remains far ahead at the top of the table. With Paradise Valley improving we now have no cities in the zone below 100.
March 21 – In Maricopa County there were 468 purchases by Canadians between March 2016 and February 2017. In the same period there were 2,006 sales, so sales outnumbered purchases by 4.3. Sales are up 11% while purchases are down 39% from the prior year.
March 20 – Although the active listing counts, both with and without UCB and CCBS listings) are still inching up, the strong rate of closings is driving the short term measures of supply ever lower. Long term measures are stable however.
For all areas & types we have 101 days of inventory, equalling the highs reached earlier this year on February 13 and March 13. The short term months of supply reading is down to 3.3 months having peaked at 4.0 months in January and February. Both measures are lower than last year when we saw 121 and 4.1 respectively.
March 19 – The arrival rate of new listings has increased over the last 2 weeks relative to last year. We have now seen almost as many added as we did year to date in 2016. As a result the total number of active listings is still growing, although very slowly. We should reach the peak for 2017 over the next few weeks. Both the Cromford® Supply Index and the Cromford® Demand Index are very stable indicating little change in the balance between buyers and sellers.
March 18 – The table below ranks the cities by their annual sales rate at the beginning of March. This is based on public recordings, not the ARMLS data.
|Rank||Postal City||Annual Sales Rate 2017||Annual Sales Rate 2016||Change|
|9||San Tan Valley||4,043||3,434||17.7%|
|17||Sun City West||1,655||1,513||9.4%|
|31||Tucson (in Pinal)||468||449||4.2%|
Note that Peoria has overtaken Glendale, which was in 4th place back in 2000, having been surpassed by Chandler and Gilbert many years ago.
New River and Paradise Valley saw significant declines in unit sales volume, going against the trend. Arizona City, Tolleson and Fountain Hills were also much weaker than average.
Among the larger cities, Chandler, Mesa , Queen Creek, Buckeye, Goodyear, San Tan Valley, Avondale and Peoria benefited from powerful growth with Gilbert and Surprise taking a bit of a pause compared to recent years.
March 17 – Comparing the Cromford Market Index for the single-family markets in the 17 largest cities (by dollar volume) with the index one month ago, we get the following:
There are 11 markets that are improving for sellers and only 6 deteriorating. Overall this is a positive move in four weeks.
Scottsdale, Goodyear and Gilbert are the main cities with a negative trend, and Scottsdale has moved from a seller’s market into a balanced market.
Maricopa and Surprise show the largest positive trend over the past month, with Tempe not far behind them.
March 16 – The Cromford® Market Index for all areas and types has been extremely stable over the last few weeks, holding a tight range between 144.4 and 145.0. The supply index is unchanged at 72.9 since February 27 while the demand index has hovered between 105.3 and 105.5. At the moment this lack of direction means sellers remain in charge across much of the market. Although average sales price per square foot has changed little since January, we are seeing a rise in the pending average $/SF, which has just climbed over $151 for the first time since March 2008. This suggests we are likely to see the usual second quarter rise in average sales prices start to make its move very shortly.
March 15 – In contrast to yesterday, here are the ZIP codes with the highest inventory. Buyers can afford to be quite choosy in these locations while sellers will need a great deal of patience.
- Carefree 85377 – 547 days
- Scottsdale 85262 – 541 days
- Paradise Valley – 443 days
- Rio Verde 85263 – 408 days
- Wickenburg 85390 – 378 days
- Scottsdale 85266 – 315 days
- Scottsdale 85255 – 279 days
- Gold Canyon 85118 – 264 days
- Phoenix 85004 – 259 days
- Morristown 85342 – 253 days
Here is the current state of play with respect to the 3 month moving average $/SF in these locations:
- Carefree 85377 – $213.70 versus $247.99 – down 13.8%
- Scottsdale 85262 – $254.60 versus $268.62 – down 5.2%
- Paradise Valley – $385.06 versus $342.05 – up 12.6%
- Rio Verde 85263 – $166.16 versus $167.72 – down 0.9%
- Wickenburg 85390 – $154.21 versus $132.70 – up 16.2%
- Scottsdale 85266 – $236.85 versus $217.00 – up 9.1%
- Scottsdale 85255 – $275.07 versus $288.49 – down 4.7%
- Gold Canyon 85118 – $154.60 versus $163.40 – down 5.4%
- Phoenix 85004 – $275.05 versus $267.30 – up 2.9%
- Morristown 85342 – $99.72 versus $100.10 – down 0.4%
Paradise Valley was aided by one extremely expensive home sale in January 2017 ($12.75M), but 6 of the 9 other locations above saw decreases in the average price per sq. ft.
March 14 – Based on the current number of active listings (excluding UCB and CCBS listings) and the annual sales rate, here are the ZIP codes with the least supply in the Greater Phoenix area (all dwelling types included).
- El Mirage 85335 – 24 days
- Mesa 85210 – 28 days
- Chandler 85224 – 32 days
- Mesa 85202 – 32 days
- Youngtown 85363 – 33 days
- Chandler 85225 – 34 days
- Phoenix 85027 – 36 days
- Glendale 85302 – 37 days
- Tempe 85282 – 39 days
- Mesa 85201 – 40 days
Last year this list was dominated by the West Valley, but in 2017 the Southeast Valley takes 6 of the top 10 slots. I would regard anything under 60 days as being very short of supply, so buyers are at a severe disadvantage in these locations.
What is happening to prices in these ZIP codes? Here are the 3-month moving average prices per sq. ft. compared to a year ago
- El Mirage 85335 – $106.77 versus $94.69 – up 12.8%
- Mesa 85210 – $124.52 versus $119.77 – up 4.0%
- Chandler 85224 – $149.57 versus $144.40 – up 3.6%
- Mesa 85202 – $132.61 versus $119.57 – up 10.9%
- Youngtown 85363 – $96.81 versus $89.71 – up 7.9%
- Chandler 85225 – $144.51 versus $120.25 – up 20.2%
- Phoenix 85027 – $137.90 versus $125.04 – up 10.3%
- Glendale 85302 – $110.78 versus $99.96 – up 10.8%
- Tempe 85282 – $145.85 versus $137.11 – up 6.4%
- Mesa 85201 – $127.21 versus $105.83 – up 20.2%
March 13 – On February 24, we examined days of inventory by price range, comparing this year with last year. Today we are doing the same thing but segmenting by dwelling type rather than price range.
|Location||Dwelling Types||Days of Inventory March 2016||Days of Inventory March 2017||Change|
|Greater Phoenix||Mobile Home||182||145||-20%|
Here we see that the largest sector, single-family, representing about 80% of the market, has improved by 18% from a seller’s perspective. However the smaller sectors have seen greater improvement. The inventory of condos & townhouses, in particular, is down 25% compared to a year ago and these attached homes have a greater imbalance between supply and demand. Mobile homes have improved for sellers by 20%, but still have substantially higher inventory at 145 days.
Let us also look at the figures by county.
|Location||Dwelling Types||Days of Inventory March 2016||Days of Inventory March 2017||Change|
The inventory in Pinal County has fallen much more dramatically than in Maricopa County, but still remains a little higher at the moment.
Yavapai County refers to the ARMLS territory only, namely Black Canyon City, Congress, Cordes Junction, Cordes Lakes, Crown King, Peeples Valley, Spring Valley and northern parts of Wickenburg and Morristown. Even though supply is plentiful here, it has fallen by the same percentage as Greater Phoenix as a whole.
March 12 – Extending our analysis of the listing success rate from yesterday, we are now going to compare the different geographic areas.
- Southeast Valley – 81%
- West Valley – 80%
- Central and North Valley – 77%
- Pinal County – 75%
- Northeast Valley – 65%
Ignoring the tiniest locations, the most significant cities with very high success rates are:
- El Mirage – 91%
- Sun City – 88%
- Youngtown – 86%
- Avondale – 85%
- Sun City West 84%
The cities with the lowest success rates are:
- Carefree – 46%
- Paradise Valley – 47%
- Rio Verde – 52%
- Wickenburg – 54%
- New River – 59%
The Southeast Valley is currently very consistent with Gilbert, Mesa, Chandler and Tempe all at 81 to 82%. Cave Creek has the highest success rate in the Northeast, but Scottsdale varies from a high of 81% in 85257 to a low of 48% in 85262.
March 11 – If you work mainly with luxury homes you may not be aware of how easy it is for most sellers these days. Of course it is still possible to make mistakes like pricing a home way too high, but the Listing Success Rate chart tells no lies.
The current overall reading is 80.8% for all areas & types, and since this includes expensive homes, it is a pretty high number. The last time we saw an overall listing success rate that high was June 2013. In those days investors were snapping up every distressed property they could find, and they were disappearing fast. To achieve a listing success rate over 80% requires a very healthy market.
To see how it plays out by market sector, you can use the Listing Success Rate Tableau chart, and I recommend that you check it out, including the many different tabs showing different views of the data.
We are going to review a few facts gleaned from the listing success rate.
Listing success by price range:
- $100K to $150K – 87% (86% last year)
- $150K to $200K – 86% (87% last year)
- $200K to $300K – 84% (82% last year)
- $50K to $100K – 80% (82% last year)
- $300K to $500K – 73% (74% last year)
- Under $50K – 68% (79% last year)
- $500K to $1M – 63% (61% last year)
- $1M to $2M – 53% (48% last year)
- Over $2M – 32% (47% last year)
It is getting harder to sell homes under $100K as well as homes over $2 million. From $100K up to $300K it is very easy – that is what a success rate over 82% means. $500K to $2 million is harder, but still easier than this time last year.
March 10 – In the most recent Black Knight Financial Services Mortgage Monitor Report. which focuses on January 2017, we can see that mortgage delinquencies fell again during 2016. For the country as a whole, 4.2% of first home loans had a payment late by more than 30 days and another 0.9% have entered the foreclosure process. One year earlier there were 5.1% of first home loans with a payment late by more than 30 days and an additional 1.3% were in foreclosure. This is an overall improvement of 18.6%, pretty impressive for one year.
Arizona behaved almost exactly like the country as a whole, with an improvement of 18.6%, leaving us with 3.1% of first home loans with a payment late by over 30 days and another 0.4% already in foreclosure. We used to have the lowest percentage in foreclosure, but now Colorado is down to 0.2%, while California, Minnesota and Michigan are at 0.3%.
New Jersey and New York have by far the highest percentage of homes in foreclosure, both with 2.8%. However they do not have the worst delinquency problems. That doubtful honor goes to the following southern states:
- Mississippi – 11.3% of loans non-current
- Louisiana – 9.8% of loans non-current
- Alabama – 7.9% of loans non-current
- West Virginia – 7.7% of loans non-current
The bright side for these states is that at least the delinquency rate is improving year over year. That cannot be said for Alaska where delinquency has worsened by 6.9%. It is the only state with a negative change, though Wyoming and North Dakota managed less than a 6% improvement. All three states have been affected by the loss of jobs in the energy sector.
The biggest fall in delinquency over last year can be found in Washington state (down 26.5%), followed closely by Colorado (down 26.2%).
March 9 – The slight downward trend in the Cromford® Market Index is being replaced a very slight upward trend. The Cromford® Market Index for the single-family markets 17 largest cities is also starting to improve a little.
Here we have 9 out of 17 cities with an improving trend from a seller’s perspective and 8 with a deteriorating trend. You cannot get closer to a slight upward trend than that, but I suspect next week will have more cities showing improving CMIs.
The strongest positive moves were by Surprise, Maricopa, Avondale and Buckeye, so the West Valley is doing great for sellers at the moment, and Maricopa is getting its mojo back.
There is a mixed picture in the Southeast Valley with Tempe and Mesa moving ahead but Chandler, Queen Creek and (especially) Gilbert moving backwards.
The Northeast Valley takes 4 of the 5 bottom spots with Fountain Hills and Scottsdale under performing. With the market over $1 million looking relatively weak, we can expect a slower pace of improvement in the northeast.
March 8 – The percentage of final list price achieved at closing is another useful indicator of how the market is doing. It is not much use for forecasting, since it is a trailing indicator, but it is good for confirming the current situation. If a segment is achieving a higher percentage than average we can conclude that times are good, and vice versa.
Lets look at the top 17 cities and their single family markets:
|Rank||City||Current % List (Year to Mar 2017)||Long Term Average % List (Since 2001)||Difference|
We note that all 17 cities are above their long term averages. Cities with higher prices tend to achieve lower percentages of list, though in this table Gilbert and Mesa are higher than that would suggest while Maricopa & Surprise are lower.
March 7 – When we look at the market for single family homes over $500,000 we see the following changes in the quarterly average price per sq. ft.
|Area||Average $/SF Dec 2015 – Feb 2017||Average $/SF Dec 2016 – Feb 2017||% Change|
The Southeast Valley sticks out like a sore thumb and has done for several months now. This is the only large area where homes over $500,000 have been selling for much higher average prices per sq. ft. than last year. There are certainly a few spots in the Northeast Valley and Phoenix that have done the same, such as Arcadia and Old Town Scottsdale, but when we consider the larger areas, these favorable trends are dragged down by the weak price trends in North Scottsdale, Paradise Valley, Fountain Hills, Carefree and the Biltmore District. The $/SF ratio between the northeast and the southeast has closed from 2.17:1 to 2.03 :1 over the past 12 months.
Again restricting our analysis to homes over $500,000 we can find some pretty steep rises in the quarterly average price per sq. ft. in the following southeastern ZIP codes:
- Mesa 85213 – up 26% from $131.68 to $165.85
- Gilbert 85298 – up 19% from $150.29 to $178.37
- Mesa 85207 – up 11% from $168.59 to $187.86
- Tempe 85284 – up 6% from $182.27 to $193.26
- Gilbert 85234 – up 6% from $161.58 to $171.78
All of these areas offer the buyer a good choice of large luxury style homes at relatively cheap prices, luxury homes for the budget conscious, if you like. Since this has become a visible phenomenon over the past 6 months, I wonder if there is a correlation between this favorable price trend and the creation of high-tech jobs in the Southeast Valley particularly along Rural Road. The jobs pay above-average salaries and for lower-end luxury home buyers who care about getting the maximum house for their money (and living close to a freeway so they can get to work easily), the Southeast Valley has been looking pretty inexpensive for the last several years. Of course that advantage could erode if prices continue to rise faster than the Phoenix area as a whole. As you can see in the table above, there is still a big price gap between the southeast and the northeast (and Phoenix), so the southeast still has a lot of room to run before its price advantage is gone.
March 6 – Here are the ZIP codes where the contract ratio (all dwelling types) is higher than in March 2016 and unusually high too:
- El Mirage 85335 – 234 (up 16%)
- Mesa 85202 – 188 (up 45%)
- Mesa 85210 – 181 (up 70%)
- Glendale 85302 – 169 (up 56%)
- Phoenix 85027 – 160 (up 15%)
- Glendale 85306 – 153 (up 33%)
- Mesa 85201 – 145 (up 34%)
- Peoria 85345 – 143 (up 23%)
- Phoenix 85024 – 135 (up 149%)
- Chandler 85225 – 135 (up 4%)
In these ZIP codes the supply of active listing (excluding UCB and CCBS) is woefully small compared with the number of listings under contract (Pending, UCB or CCBS).
The opposite is true of the list below which comprises the 20 ZIP codes with the lowest contract ratios:
- Scottsdale 85266 – 14
- Scottsdale 85262 – 16
- Phoenix 85004 – 16
- Carefree 85377 – 16
- Wickenburg 85390 – 18
- Paradise Valley – 18
- Rio Verde 85263 – 20
- Scottsdale 85255 – 23
- Fountain Hills 85268 – 24
- Gold Canyon 85118 – 29
- Phoenix 85045 – 33
- Scottsdale 85259 – 33
- Apache Junction 85119 – 35
- Phoenix 85016 – 36
- Cave Creek 85331 – 36
These are the locations where sellers will need the most patience.
March 5 – With overall supply down from last year, most areas are seeing higher contract ratios. The contract ratio is a direct measure of how hot or cold a particular market is. It is a seasonal measurement, so month to month comparisons are not always so useful, but a comparison from year to year is always telling. We are looking for the exceptions today, segments where the contract ratio has perversely gone down compared to a year ago. Here they are:
- Phoenix & North Valley has a lot of spots that are cooler than last year:
- 85003 – down 28% from 57 to 41
- 85004 – down 11% from 18 to 16
- 85006 – down 36% from 92 to 58
- 85009 – down 31% from 68 to 47
- 85012 – down 17% from 56 to 47
- 85014 – down 15% from 68 to 58
- 85016 – down 5% from 38 to 36
- 85017 – down 7% from 105 to 98
- 85021 – down 15% from 58 to 49
- 85029 – down 5% from 118 to 112
- 85033 – down 34% from 132 to 87
- 85035 – down 36% from 117 to 75
- 85037 – down 25% from 136 to 103
- 85040 – down 12% from 111 to 98
- 85042 – down 33% from 88 to 59
- 85043 – down 30% from 184 to 129
- 85045 – down 29% from 46 to 33
- 85048 – down 3% from 52 to 51
- 85050 – down 17% from 54 to 45
- 85051 – down 13% from 99 to 86
- 85053 – down 4% from 120 to 116
- 85086 – down 5% from 53 to 50
- Pinal County has just a few cooler spots, just:
- 85128 – down 8% from 56 to 51
- 85142 – down 6% from 71 to 66
- 85173 – down 28% from 23 to 17
- Southeast Valley has very few cooler spots, the vast majority being considerably hotter than in 2016
- 85203 – down 4% from 95 to 91
- 85226 – down 4% from 118 to 114
- 85234 – down 1% from 86 to 85
- 85296 – down 5% from 119 to 113
- Northeast Valley is mostly warmer than last year with a couple of exceptions
- 85266 – down 16% from 17 to 14
- 85268 – down 11% from 27 to 24
- West Valley – has a few more cooling areas, but the majority are hotter than last year
- 85304 – down 47% from 163 to 86
- 85310 – down 11% from 61 to 54
- 85323 – down 2% from 117 to 115
- 85339 – down 15% from 89 to 76
- 85353 – down 17% from 120 to 100
- 85363 – down 50% from 300 to 150
- 85373 – down 20% from 71 to 57
- 85379 – down 1% from 99.4 to 98.8
- 85381 – down 18% from 75 to 66.1
So we see that, perhaps unexpectedly, Phoenix has proportionally more areas that are cooler than a year ago.
The above analysis included all dwelling types in each area.
March 4 – Sometimes it is insightful to consider how times have changed.
In February 2017 there were no distressed sales at all recorded through ARMLS in
- Fountain Hills
Coolidge and Florence, in particular, used to be plagued by lender owned properties and short sales. In October 2009, 96% of sales in Coolidge were distressed, with 44 REOs, 6 short sales and just 2 normal sales. Florence’s worst month was November 2008 with only 7% of sales normal. There were 22 REOs, 3 short sales and just 2 normal sales. Fountain Hills was never quite so badly affected. Its worst month was October 2010, when only 27% of sales were normal with 15 REOs, 9 short sales and 9 normal sales.
You can see the changes reflected in pricing.
In Coolidge, average price per square foot has risen from $35.38 in October 2009 to $66.70 in February 2017, a recovery of 89%.
In Florence, average price per square foot has risen from $46.12 in November 2008 to $90.50 in February 2017, a recovery of 96%
In Fountain Hills, average price per square foot has risen from $134.75 in October 2010 to $206.68, a recovery of 53%
You can see the latest percentages of distressed sales by city here. Casa Grande is the only one to exceed 10% and surprisingly, Paradise Valley is in second place at over 9%.
Just 12 months ago in February 2016, there were 6 cities with 10% or more of sales distressed:
- Casa Grande
- Litchfield Park
- Sun City
None of the cities were completely free from distressed sales in February 2016, so the trend of falling distress levels is still continuing.
March 3 – We now have the preliminary Maricopa County closing numbers for February and they are looking pretty good. Total sales are up 12% over February 2016 (similar to the gain in ARMLS sales). However new build closings are up 26% year on year, whereas re-sales are up only 10%. Neither of these are too shabby, but new homes continue to build market share from 12.3% of unit sales in February 2016 to 13.9% in February 2017.
The new build median sales price is up 7% while the re-sale median is up 8%, with the overall median up 7%.
At $336,000 the new build median in February is the highest ever recorded in Maricopa County. This is NOT because new home pricing is really the highest ever, it is because the new home builders are selling very few small homes. On a price per square foot basis, new homes still have some way to go to match the pricing of 2006. The median sales price for new homes in June 2006 (the peak ) was only $266,523 because at that point there were huge numbers of entry-level new homes being sold to people who should never have qualified for a home loan.
The re-sale median was $225,900 which is still lower than June 2016 and September 2016, so no records there.
March 2 – The Cromford® Market Index for single-family market in the 17 largest cities is shown in the table below along with its value one month ago:
14 of the 17 cities are in the seller’s market zone over 110, but only 6 out 17 showed an improvement in conditions for seller’s over the last month. Many of the cities barely moved their index and the only major changes were:
- Surprise up 11%, overtaking Peoria
- Avondale up 10% extending its lead at the top of the table
- Fountain Hills down 12%, now in a balanced market
March 1 – The National Association of Realtors (NAR) issued a statement yesterday referring to pending home sales weakening in January. This is based on their “Pending Home Sales Index” which takes the number of homes that go under contract and optionally adjusts the number for seasonality. If you examine their numbers in detail you will notice that the seasonal adjustment makes all the difference. For the west of the country NAR starts with an unadjusted 20.4% rise compared with last month and a 1.2% increase compared with last year. After applying the seasonal adjustment, these numbers become a 9.8% fall and a 0.4% decrease respectively.
This just has me scratching my head in wonder. I personally think NAR’s seasonal adjustment may be distorting the real picture here, rather than adding clarity.
As far as our pending listings in ARMLS are concerned, we currently have 7,694 which is up from 7,410 on the same day in 2016, a rise of 3.8%. Since both measurements were taken on the same day we do not need to apply a seasonal adjustment of any sort.
This is a healthy increase, but not as strong as the rise in closed sales. We can probably make a better comparison by adding in the UCB listings, since about 65% of UCB listings are not really accepting backups, but are in a quasi-pending state.
When we do this we see a growth from 11,954 to 12,503, an increase of 4.6%.
There is no mechanism I can find that suggests that pending home sales are weakening. On the contrary, they are getting significantly stronger and have been doing so since the start of the year.
Maybe Phoenix is doing better for new contracts than the rest of the west?
Or maybe NAR’s interpretation of their own data is not quite right?
Either way, there is absolutely no sign of any weakness in the pace of contract signings in Greater Phoenix thus far in 2017.
© 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.
Thank you for the fabulous job you did in helping us find and purchase a home in Scottsdale. I have been involved in the legal and personal end of real estate for more than 35 years, and you are by far the most conscientious, helpful and competent real estate agent I have ever run across. In short, you’re the best. – Craig and Charlotte H. (clients of Vicki Kaplan)
No small part of this deal working out was due to the intense negotiations and juggling of our real estate agent, Denise Pruitt with Arizona Best Real Estate. She acted in our best interest at every turn, taking the brunt of the unpleasantness and making it work out. WE WOULD NOT BE IN THIS HOUSE WITHOUT HER. I think she is owed a bedroom, at least. Maybe a portion of the pool. – Eric & Kathryn (clients of Denise Pruitt)
Ruth has done an excellent job of acqainting/educating us with the details of the AZ market. This has been our first experience purchasing an AZ property – and we’re very fortunate to have her assist us. Bless her for her patience with us throughout the process! – Roger (client of Ruth Sells)
Having worked with many realtors over the years, you are the Best! You know your market, took time early on to listen to our needs, stayed on top of all the details…you were an invaluable resource. – Russ and Karen G (client of Vicki Kaplan)
This was my first time selling my house and I really didn’t know what might be in store for me. Chris, put my worries at easy and guided me through the whole process, it was very easy. Chris laid everything out for me and was very knowledgeable, whenever I had a question. I would recommend him to anyone. – Cameron K (client of Chris Nace)
Sheri Jackson is an amazing realtor! After meeting with her the first time, I knew that she had the passion and drive to help find the right home for me. The best part about the entire process was she made it so simple and easy for me to find a place I now call home. I would personally recommend her expertise to anyone looking for a home or rental in the future. – Ashley (client of Sheri Jackson)
This was my first time selling a house. I was worried about the whole process but then I was introduced to Chris. He took all the pressure off me with his expertise, knowledge of the industry, and his professionalism. Thank you Chris. – Brody M (client of Chris Nace)
Ruth Sells was just a pleasure to work with and the best Realtor we have had the opportunity of meeting in many years of searching. – the Stumpfs (client of Ruth Sells)
Just wanted to thank you for the terrific job you did for us in finding the house of our dreams. We love it! Your experience and optimism was greatly appreciated. We feel you have become a friend during the process. Please do not hesitate to use us as a great reference. Good luck in the future and keep in touch. Lots of love. – Tom & Lil (clients of Denise Pruitt)
Sheri helped us narrow down a list of homes she prepared for us, encouraged us not to just settle and within 48 hours we were signing papers to a home that suited all of our needs. Sheri was very knowledgeable and the made the house hunting experience A LOT OF FUN!! We would personally recommend Sheri to anyone looking to purchase a home in the future. – Bob & Sue H (clients of Sheri Jackson)